A plan to lease five struggling public sugar companies to private investors has received a major boost after the Cabinet approved the write-off of a Sh117 billion debt they owe.
The sugar companies owe the money in banks loans, tax arrears and penalties, farmers and employees' dues. They owe banks Sh65 billion, Sh50 billion in taxes and nearly Sh2 billion in farmers' dues.
President William Ruto, during a Cabinet meeting held at the Kisumu State Lodge on Monday, acknowledged resolutions by the National Assembly and the Senate on the reforms sanctioned for the turnaround of the sugar sector.
“Additionally, the National Treasury is working on waiving tax penalties and interest within 30 days as agreed by the Cabinet,” read a statement by State House.
The plan will also see run-down factories sold and land leased to the bidders picked to commercially run Nzoia, South Nyanza (Sony), Chemelil, Mumias, Muhoroni and Miwani Sugar companies to construct modern plants.
Treasury Cabinet Secretary Njuguna Ndungú said that the proposed lease model shall be executed by unbundling the nucleus estate land and the factory lands owned by the millers.
Request for proposals
Plans for the payment of farmers' and employees' salary arrears will also be unveiled within three months. The meeting also endorsed the publication of requests for proposals for the leasing of the five State-owned sugar mills, which will be undertaken in a fortnight.
The Cabinet also granted approval for the extensive re-development of KenGen's Gogo Hydropower Plant in Migori County.
“The project aims at elevating the plant's generation capacity and enhancing efficiency, bolstering power generation and stability in Western Kenya,” said the Cabinet statement.
