By Mangoa Mosota and Kepher Otieno
Prime Minister Raila Odinga has broken his silence over the molasses plant in Kisumu, saying there is wrong information about the factory in the public domain.
Addressing a leaders’ forum at Tom Mboya Labour College, on Sunday, Raila said the plant was facing auctioneer’s hammer in 1996 and the public was forced to contribute money to save it.
"Locals contributed Sh1.7 billion and a developer (Spectre International) brought in $15 million (Sh1.2 billion). This enabled the moribund plant to get on its feet," said Raila.
He contends bad politics was behind the current factory’s woes.
"Propaganda was being spread on Sunday that the local shareholders were to come to get refunds for their investment. That is untrue," said the premier.
He said the Sh1.7 billion investment would be converted into shares once the firm gets listed on the Nairobi Stock Exchange (NSE).
"Our plan is to have the plant perform well to the level of being listed at the NSE," he said.
"The factory was meant to produce fuel to bridge acute shortage witnessed in the 1970s. But when the situation got better, the facility, which was partly sponsored by the Government was neglected," he said
Raila further reckoned that taxation on ethanol that was produced by the plant was very high, forcing the company to sell 90 per cent of the products to Uganda.
region’s unemployment
He said more factories such as the molasses plant should be initiated in the lakeside town.
He said the closure of many factories in Kisumu contributed to the region’s unemployment.
"Kicomi Textile Mills is now a museum, while the Kenya Breweries plant is used as a maize storage. The sugar factories in the region are limping," he said. The molasses plant has a long and controversial history that dates back to 1978 when it was launched by the Government and private investors.
Financial problems halted work on the project in 1982 and shortly thereafter, it was placed under receivership.
The receivers auctioned the plant in 1996 with Spectre International Limited winning the bid. However, there was controversy over the land on which the plant was located and this was not resolved until 2001.
In 2002, Spectre sought an investor to develop the plant and one year later, they started negotiations with Energen of Canada that acquired a controlling interest in Spectre International Limited.
Thereafter, rehabilitation of the plant commenced. This included construction of a weigh station, major water intake works and pumping station at the adjacent Lake Victoria, the laying of a 12 inch steel pipeline to the plant and the construction of a water treatment facility involving settlement tanks, gravity filters and clarifiers.
Sunday’s forum brought together political leaders, professionals, and businessmen.
Cabinet ministers present were Dalmas Otieno (Public Service), Prof Sam Ongeri (Education), James Orengo (Lands), Prof Anyang’ Nyong’o (Medical Services), Chris Obure (Public Works), Otieno Kajwang (Immigration) and Trade Assistant minister Omingo Magara. Others were Nyanza PC Paul Olando and Kisumu Mayor Sam Okello.
