Luhya leaders rebuke Raila over Nzoia leasing attempt

A storm is brewing in western Kenya after local leaders opposed plans by the national government to lease out Nzoia Sugar Company.

Bungoma Senator Moses Wetang’ula stirred up the hornet’s nest when he claimed there were plans to hand over the factory for a fraction of its true worth.

“We know the factory has at least Sh1 billion in its account, over 12,000 acres of nucleus valued at Sh14 billion, and real estate and other assets totaling to at least Sh20 billion. On what basis does the government want to lease Nzoia Sugar Company for only Sh1 billion?” said Wetang’ula.

The senator spoke yesterday outside the entrance to the miller after he and a group of leaders were denied entry into the factory premises.

Mr Wetang’ula was accompanied by MPs Dan Wanyama (Webuye West), Justus Murunga (Matungu), Charles Gimose (Hamisi), Mwambu Mabonga (Bumula), Ferdinand Wanyonyi (Kwanza) and Benjamin Washiali (Mumias East).

Also present was former Kakamega Senator Boni Khalwale.

Mr Murunga asked ODM leader Raila Odinga to steer clear of the politics of sugar in the region. “Let him leave this issue for Luhya leaders whose ancestors gave out the land and pay back the money he took from Mumias.”

Wetang’ula accused unnamed senior government officials of plotting to seize the millers’ assets, saying such a move would lead to the collapse of the region’s economy.

The government has kicked off the process of leasing out five debt-ridden sugar factories in the hopes that new investors can turn around the crippled millers.

They are Chemelil, Muhoroni, Miwani, Sony and Nzoia sugar companies. The Agriculture and Food Authority had earlier indicated that successful bidders would run the factories for the next 25 years.

Farmers’ interests

Wetang’ula said the local community was ready to raise funds and buy the factory if the government failed to protect farmers’ interests and leased the mill “to people who do not have their interests at heart.”

But Nzoia Sugar Company Managing Director Michael Wanjala denied Wetang’ula’s assertion that the company would be stripped of its assets and handed over to investors for a song.

“No one is leasing the company for Sh1 billion. The government is at the expression of interest stage and tenders are yet to go out. Any discussion on lessee fees is premature and speculative,” said Mr Wanjala, as he urged the leaders to refrain from speculating on the matter.

According to the MD, the factory sits on 3,600ha while another 1,000ha is occupied by other entities housed by the company.

“Discussions on the price of land are diversionary, since the government is not selling. It is leasing, which is more of a rental arrangement.

“The matter of sugar theft has been finalised. I will be receiving the report next week. I will study it and take action accordingly. At all times, we shall ensure the company does not lose a cent,” said Wanjala, adding that the miller’s audited financial statements were available online for all to see.

Agriculture Cabinet Secretary Peter Munya had earlier indicated that the miller was indebted to the tune of Sh11 billion.

The leaders’ sentiments followed Industrial Court Judge Nduma Nderi’s issuance of orders suspending the leasing process, after the Kenya Union of Sugar Plantation and Allied Workers (Kuspaw) claimed it had been sidelined in the matter. 

The orders effectively stopped the work of a committee formed by the Agriculture ministry to oversee the leasing process. Raila was irked by the court’s decision.

He said the court ruling was a threat to development since it came at a time the government was working to revive the battered economy.

“I am surprised that the court went ahead to issue an injunction without inviting the government to hear their side. This does not augur well for development. The process is at a very critical stage, and setting the hearing for September 30 appears to be a scheme to frustrate the process,” the ODM leader said.

Gone to court

But Kuspaw Secretary General Francis Wangara said they had gone to court over fear that workers would lose arrears totaling Sh5 billion once the factories changed hands.

“We are not opposed to leasing so long as the due process is followed,” said Mr Wangara. “We wrote a letter to Mr Munya on who will take over the workers’ liabilities before the leasing process takes place, but he did not respond to our concerns.”