Ruto promises to get new investor to revive Mumias Sugar

for Tv47 Digital December 08, 2022, 08:14 PM
President William Ruto during a previous event. The Head of State is currently on a tour of Western Region, meeting leaders from all the political divide.

In Summary

  • Uganda-based firm Sarrai Group had controversially won 20-year lease tender in December 2021 following a bidding process that saw higher bidders locked out of the investment venture. 

  • However, in April 2022, High Court judge Justice Alfred Mabeya ordered Sarrai to leave the premises and removed Ponangipali Venkata Ramana Rao as the Administrator of the company.

President William Ruto on Thursday, December 8 said he is going to get a new investor to revive collapse Mumias Sugar Company and restore thousands of jobs losses in the troubled sugar miller. 

Speaking during his first trip to Western Kenya since his inauguration as President, Ruto said he will also revive Nzoia Sugar Company as he seeks to expand employment opportunities for Kenyan youth and farmers to get a place to sell their produce. 

"The government will pay all the debt for sugar factories. I will bring a new investor for Mumias and oversee the revival.I know all these people and issues. The current issues at Mumias cannot be allowed to continue."Said the president.

Ruto’s remarks come a time when Uganda-based Sarrai Group has been battling court cases after it was kicked out in April 2022 from the sugar miller.

Sarrai had controversially won 20-year lease tender in December 2021 following a bidding process that saw higher bidders locked out of the investment venture. 

However, in April 2022, High Court judge Justice Alfred Mabeya ordered Sarrai to leave the premises and removed Ponangipali Venkata Ramana Rao as the Administrator of the company.

Mabeya further appointed Kereto Marima as the new administrator of Mumias Sugar Company and ordered Rao to hand over the company to Marima. 

"This court has considered the allegations made against the leasing process. Rao awarded the lease to the lowest bidder while there were higher bidders, without giving any justifiable explanation,” the judge ruled.

Justice Mabeya said public interest demands that receivership that has yielded zero results takes a back seat and a professional administration of Mumias is given a chance.

He added: "It would have been essential to even have a pre-evaluation of Mumias which would have informed a result price that would have achieved the purpose of paying off Mumias debts and release it from receivership and administration. 

“The manner in which Rao handled the leasing process did not tally with what was expected of him as an administrator. His actions were meant to protect the interests of KCB and if the lease is upheld, the same would be tantamount to blessing KCB with an extra asset known as Mumias for the next 20 years, and of course, would be the greatest miscarriage of justice."

In October this year, sugarcane farmers and former Mumias Sugar employees took to the streets to protest Sarrai Group stay at the sugar miller despite a court order kicking it out. 

The workers claimed that the firm had imported employees from Uganda and locked out locals and former workers of the troubled miller. 

“Mumias Sugar requires your urgent intervention Mr President because people are being mistreated by a Ugandan. The dirty games being played in Mumias should not happen under your leadership,” Mumias Sugar Workers Union Chairman Patrick Mutimba said during the street demos in October. 

Workers also questioned the controversial leasing of the Mumias Sugar nucleus land. 

They alleged that Sarai Group appropriated more than 8,000 acres almost for free.

“The average price of land in Mumias now is Sh700,000. Multiplied by 8,000 acres, the value is Sh5.6 billion but Sarrai is getting it almost at no cost,” Mutimba said.

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