West Kenya linked to farmers blocking Mumias Sugar lease


Entrance gate at Mumias sugar company. FILE PHOTO | ISAAC WALE | NMG

West Kenya has been linked to a Kisumu-based cooperative society that is opposing the leasing of Mumias Sugar Company to Ugandan firm Sarrai Group, further exposing the rift in billionaire Rai family.

Gakwamba Farmers’ Co-operative Society says in an application that West Kenya Sugar Co Ltd, owned by Jaswant Sigh Rai, is using its name to interfere with plans to revive Mumias.

The farmers add they did not authorise a law firm to use the society’s name to oppose the bid for 20-year lease awarded to Sarrai Group- which is owned by Jaswant’s brother Sarbi Rai.

“We are aware that the firm of Kibe Mungai represents the interest of Jaswant Rai who is the director of West Kenya co which also bid in the same tender and is only using our society with an ill motive and in an unethical and unprofessional manner to file suit to benefit from the leasing of Mumias Sugar,” says Gakwamba Farmers.

“That West Kenya is using the name of our society to defeat the rights of the debenture holders unprofessionally and unethically,” reads papers filed by the farmers’ group.

The award of the lease dispute underlines the in-fighting in the billionaire Rai family.

Four cases have already been filed challenging the lease but one was rejected at the Public Procurement Administrative Review Board—which ruled that the miller was not subject to the Public Procurement and Disposal Act because it is not a State-owned entity nor does the government hold a controlling stake in the company.

Mr Henry Odhiambo, the manager of Gakwamba farmers says they did not authorise a group of five famers led by Lambert Ogochi to file the case against KCB-appointed receiver-manager PVR Rao and Sarrai Group over the 20-year-lease.

He said the main reason of the petition filed through the society’s name is to interfere with the Mumias Sugar revival plans by West Kenya.

“It is our interest for the miller to be revived so that it could improve their living standards. We want to see a vibrant sugar industry and do not have any interest in the bidding of the running of Mumias Sugar,” Odhiambo says in an affidavit.

West Kenya was locked out at the technical stage for fear that offering it Mumias would cement its dominance of the sugar market and breach the competition law.

Jaswant’s stable includes West Kenya, Sukari Industries and Olepito that Mr Rao reckons that it would have controlled 41.95 percent of Kenya’s cane crushing capacity.

Kibos had a bid of Sh5.9 billion, Pandhal (Sh7.7 billion) and Sarrai (Sh6.1 billion). But after factoring in the technical scores, Sarrai was awarded 58.4 points, Kibos (52 points) and Pandhal (34.4 percent).

He reckons that Sarrai emerged top among the three firms that made it past the technical valuation stage, adding that its experience in running three sugar plants in Uganda with a crushing capacity of 19,000 tones daily, power and ethanol plant made it stand out.

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