Sh295m Nzoia plant idle 28 years since purchase

The management of the State-owned Nzoia Sugar Company is on the spot after a Sh295million cane crushing plant purchased 28 years ago remained idle.

Auditor-General Nancy Gathungu said the miller bought the plant in 1993 as part of a production expansion programme but has never been commissioned.

The machinery was to aid expand the factory cane processing capacity from 3,000 tonnes a day to 7,000tonnes.

“The expansion programme was not completed then and the acquired plant has been lying idle since the acquisition and has not generated any income for the company,” she said in an audit report tabled in Parliament.

She warned that technological changes and wear and tear are bound to affect the idle machinery adversely and may result in the loss of taxpayers’ funds.

The expansion programme, according to the report, was financed by an international company not mentioned and guaranteed by the government of Kenya.

“Although the management explained that the State Department for public works has given reserve prices for possible disposal of the idle plant, the written report by the ministry was not availed for audit review,” Ms Gathungu says in the report.

According to an earlier valuation report of some of the items bought for the expansion including the plant, the items are in a deplorable state and the company has not recognised any impairment charges on them.

Ms Gathungu also questioned why Nzoia had piled idle stocks of chemicals and machinery spares amounting to Sh137 million.

She particularly cited a contract signed by the management with a local dealer for the supply of syrup clarification chemicals for Sh21 million in March 2016. The report indicates that the goods were delivered in February 2017 and have never been utilised.