Sugar miller Mumias’ #ticker:MSC efforts to resume operations suffered a major setback yesterday after electricity distributor Kenya Power cut supply to the factory for non-payment of a Sh1.2 billion bill.
Mumias has disputed the amount and has filed of a suit seeking to reverse the action.
Patrick Chebosi, the acting chief executive, confirmed the power shutdown but said the matter was being handled at Kenya Power #ticker:KPLC head offices in Nairobi.
“I can confirm power supply has been disconnected and we are currently relying on generators to keep our operations going. But as you know, that is unsustainable and quite expensive,” said Mr Chebosi.
A Kenya Power official, who requested not be named, said the dispute had been triggered by non-payment of a Sh200 million bill.
“The unpaid bill for the month stands at Sh200 million in addition to the previous one of Sh1 billion, which the miller has disputed,” he said.
Mr Chebosi, however, insisted that he had not received full details of the outstanding bill.
“We are doing our best to try and resolve this matter amicably to enable us resume milling and generate some revenue to pay our farmers and bills,” he said.
Disconnection of power comes as a big blow to Mumias’ plan to resume milling after a four-month break that was attributed to an acute shortage of cane.
Last week, senior management officials and the board of directors met at the factory and resolved that release of the Sh2 billion that the sugar miller has requested from the Treasury would be key to kick-starting operations.
Mumias has said that it plans to pay farmers the outstanding Sh700 million upon resuming operations.
The company has also announced that it will fetch cane as far as Kisumu County, signalling a looming battle for the scarce raw material with other millers in the region.
“In view of this, the board and management have put in place a number of initiatives to deal primarily with two issues, touching on factory efficiency and cane availability,” Mumias chairman Kennedy Ngumbau Mulwa said.
The team of directors and senior management officials later visited farms in Koru and Muhoroni in Kisumu to map out areas of possible cane supplies.
Mr Mulwa said he expected the Treasury to release the money to Mumias as the miller had met nearly all the conditions set for the disbursement.