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Corporate

Privatisation agency opposes bid to block sale of sugar millers

Mr Solomon Kitungu, the Privatisation Commission CEO. PHOTO | FILE
Mr Solomon Kitungu, the Privatisation Commission CEO. PHOTO | FILE 

The privatisation commission has opposed a bid by two Nyanza politicians to block the planned sale of five State-owned sugar millers in western Kenya.

The Privatisation Commission chief executive Solomon Kitungu has in court papers stated that the sale of the sugar companies is being done under provisions of the Privatisation Act.

There are plans to privatise Chemelil Sugar Company, South Nyanza Sugar Company, Nzoia Sugar Company, Miwani Sugar Company (in receivership), and Muhoroni Sugar Company (in receivership).

He said whereas the Constitution assigns the function of crop and animal husbandry to the county governments, “the sugar companies are public investments involved in milling of sugar cane, which is not part of the devolved function.”

Further, the county governments have not engaged the national government to agree, as provided by the Constitution, to have the companies transferred to them, and which will require demonstration that the investment in the sugar companies would be more effectively performed or exercised by the county governments.

“One of the problems facing the five sugar companies is the inadequacy of the financial resources that the national government is able to provide to finance their investments and working capital needs. The county governments are yet to demonstrate that they can adequately finance the companies,” Mr Kitungu.

The privatisation boss added that through mobilisation of the resources required to rehabilitate and to modernise the factories to enhance their competitiveness, the factories and cane catchment counties will benefit from privatisation.

Further that the objective of privatisation of the sugar companies is to meet Government-Comesa sugar safeguard commitment.

The current privatisation programme was formulated by the Commission in the year 2008, and was subsequently approved by the Cabinet on December 11, 2008 and gazetted on August 14, 2009.

Kisumu Senator Peter Anyang’ Nyong’o and Gem MP Jakoyo Midiwo have filed a petition at the High Court seeking court orders to block plans to privatise the five companies, saying the Privatisation Commission has failed to comply with the law.

They have also accused the Privatisation Commission of placing an advertisement in a local daily on March 11, this year, “yet its members are illegally in office.”

“The issues raised by cane farmers have also not been addressed,” argued the two politicians.

The case will be heard on Thursday.

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