Steel and cement manufacturing firm Devki Group has withdrawn its bid to lease cash-strapped Mumias Sugar Company following protests from farmers and local politicians over lack of accountability in the process.
In a statement on Friday, Devki chairman Narendra Raval said the company’s decision was prompted by recent events in the region.
“Given the ongoing public interest which the matter has attracted and the call for a publicly run bidding exercise, we have found it worthwhile to withdraw our application,” he said.
He said Devki had expressed interest in reviving the miller following an invitation from the receiver manager and would do so again if the bidding is conducted in consultation with all stakeholders.
The main gate to Mumias Sugar Company.
Photo credit: File | Nation Media Group
“We wish the receiver manager success as they seek the most appropriate method of revival or partner to take Mumias Sugar Company to the next level,” he stated.
The proposed takeover of the struggling factory drew mixed reactions from various quarters, with a majority of people calling for the process to be halted.
Western Kenya sugarcane farmers and local politicians accused Kenya Commercial Bank (KCB), which placed the debt-ridden miller under receivership, of unilaterally awarding the multimillion-shilling tender without following the required process.
Amani National Congress party leader Musalia Mudavadi pointed out that the plan did not go through public participation. He cautioned that the resuscitation plans for the miller could be disrupted.
Uproar greets move to lease Mumias Sugar Company to Devki Group
“I am calling on KCB to be transparent and effectively engage farmers and locals who are critical stakeholders in ensuring that the once leading sugar miller is brought back to glory,” Mr Mudavadi said at his Mululu home on Wednesday.
The matter also found its way to the floor of the Senate after Kakamega Senator Cleophas Malala sought a statement from the Standing Committee on Agriculture, Livestock and Fisheries about the miller’s assets and debts.
“I call on the committee to address the current state of the company’s assets and liabilities while indicating the value of the core and non-core assets and reveal which entity undertook the valuation,” he said in the Senate on Wednesday afternoon.
Mr Malala also wanted the House to be furnished with details on the procedure to be followed by the government in the sale of its stake in the company.
“Specifically, the committee should address the bidding process including who the bidders were, when the bidding took place, when the evaluation of submitted tenders was done, what criteria was used to pick the successful tenderer,” he said.
He also asked for relevant legal instruments under which the leasing process was conducted, whether there was public participation, which companies submitted their bids for the tender and when they were invited to bid.
He insisted that the details of successful tenderers should be provided and justification given for why the entity is deemed to be more qualified.
“We also need to be supplied with a report of the stakeholder consultation including the creditors and debtors and clarify who will pay the debts owed to farmers and workers,” he said.
Bungoma Senator Moses Wetang’ula said stakeholders in the region were not opposed to any investor taking over Mumias Sugar.
“What is the fate of the nucleus land of Mumias which was donated to the government by locals when the factory was being set up? Is the new investor coming to compensate the locals?” he posed.
Mr Wetang’ula also asked who would account for the Sh2 billion bailout given by President Uhuru Kenyatta in 2017 once the firm is handed over to an investor.
Kenya National Alliance of Sugarcane Farmers Organisation chairman Saulo Busolo questioned the experience of the investor in the sugar sub-sector.
“We should not gamble with the critical sector of our economy. If the cane farming is ruined, everything else will tumble,” he said.
