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Power restored to Mumias Sugar on payment deal

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Mumias Sugar Company. FILE PHOTO | NMG

A deal between the management of Mumias Sugar Company #ticker:MSC and Kenya Power #ticker:KPLC officials has seen the troubled miller’s electricity restored.

The move paves the way for reopening of the factory. An outstanding bill amounting to Sh1 billion, the subject of the dispute, is being addressed by the two.

Mumias acting chief executive Patrick Chebosi said Wednesday that they had agreed to give the miller time to resume crushing cane and generate money to pay the bill as well as farmers for their deliveries.

“The management of Kenya Power was very supportive and agreed to reconnect power supply on the understanding that we resume crushing to generate some revenue to pay up our bills,” said Mr Chebosi.

“Our focus will now shift to finalising plans to restart operations after we have gathered adequate supply of raw materials for crushing.”

The miller, however, still faces a hurdle in its plea for additional funds from the Treasury. Mumias board chairman Kennedy Ngumbau Mulwa said two weeks ago that 80 per cent of the turnaround plan had been approved by the Treasury and progress was being made on the balance.

The miller owes farmers Sh700 million.

ALSO READ: Mumias pegs its operations on Sh2bn State funding

Mr Mulwa said the miller had negotiated with farmers from outside Kakamega County to supply cane and be paid after delivery.

He said that changes in management of the Kenya Sugarcane Millers Association (Kesma) will help address the issue of private millers poaching cane in Western and Nyanza regions.

In the changes, the West Kenya Sugar Company chairman was replaced as Kesma chairman.

Butali Sugar Company MD Jayant Patel was elected the new Kesma chairman.

Mr Chebosi, who is the new Kesma treasurer, said the team will come up with a strategy to ensure that millers who flout regulations and engage in cane poaching face the law.

“The shortage of cane at Mumias has been triggered by rival millers who operate outside the law by engaging in cane poaching. We are determined to ensure that stops,” said Mr Chebosi.

ALSO READ: Mumias in fresh power crisis over Sh1.2bn debt