Mumias Sugar receiver manager gets more time before advertising leasing bid

Devki withdraws bid to lease Mumias Sugar Company

The Senate has granted more time to Mumias Sugar Company receiver manager PVR Rao following the lapse of the two weeks period he was given to advertise for bidders for the leasing of the loss-making miller.

Appearing before the Senate Standing Committee on Agriculture, PVR Rao said he needed more time to finalize on the documentation of the bids for the former giant sugar miller, which was placed under receivership by the Kenya Commercial Bank Group (KCB) in September 2019.

PVR Rao is also yet to do a technical evaluation to determine the amount of money it would take to revive the struggling sugar factory.

Devki Group of Companies withdrew its bid to lease Mumias Sugar Company last month.

Dr. Narendra Raval, the Chairman of Devki Group of Companies said “…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 take out our application.”

Also Read:

  1. Devki withdraws bid to lease Mumias Sugar Company
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  3. How government’s laxity is killing Kenya’s sugar subsector

“We will however express interest, should the exercise be conducted in consultation with all the stakeholders.” Dr. Raval added.

Last month, western region leaders including Amani National Congress (ANC) party leader Musalia Mudavadi, Kakamega County Senator Cleophas Malala and Bungoma Senator Moses Wetangula demanded the takeover bidding process to be made public.

“As KCB or the receivers look at the possibility of getting investors, we want to emphasise that the process is done above smoothly board because whoever that investor is, he will need the goodwill of the farmers and the public.” Said the ANC Party Leader and Presidential hopeful Mudavadi.

Mudavadi’s call was followed by that of Malala who, speaking on the floor of the Senate, called for the process of Mumias’ takeover to be done transparently and procedurally.

“We as leaders of Western region are not opposed to any investor taking over Mumias Sugar Company because that has always been our interest to resuscitate the sugar mill in Mumias Sugar Company. But we want accountability. We want the people of Western Kenya to know who is this person that is coming to take over Mumias Sugar.”

Government laxity

Sugar industry stakeholders are decrying government laxity in cracking down on illegal sugar importation in the country.

According to the Kenya Association of Manufacturers (KMA), excessive importation of sugar from COMESA countries is the biggest challenge to the growth of local sugar production.

“Limited research and development, excess sugar importation, weak regulatory mechanisms and sugar dumping hinder the industry’s effectiveness as an economic and social catalyst. Consequently, this has led to inadequate total production, and eventually difficulties in meeting market demand. It is therefore critical that we turn around the sugar industry, to make it competitive – locally, regionally and internationally,” says KAM Chair Mucai Kunyiha.

Kenya has been importing 350,000 tons from within the EAC and COMESA due to an increasingly widened deficit in the local market.

Ugandan sugar account for 43 per cent of the total imports by Kenya from the COMESA. Kenya will this year import 90,000 tons of sugar from Uganda and the remaining 160,000 tons from other countries after exhausting its COMESA import quota for 2020.

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Lawrence Baraza is a prolific writer with competencies in Digital Media, Print, and Broadcast. Baraza is also a Communication Practitioner currently spearheading Digital content on Metropol TV's Digital Desk.

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