Mumias financial woes deepen with fresh threat from service providers

Service providers have now come calling for the monies they say are owed to them by the already troubled Mumias Sugar Company (MSC).

The struggling sugar milling company is not out of the woods yet as two companies filed separate suits claiming unpaid billions of shillings which might make efforts to salvage the remaining fortunes an uphill task.

Mumias Sugar, in regards to the two suits before the High Court has close to Sh1.2 billion in debts and the claims might affect plans by the State to bail out the company.

Security services and electricity providers in their separate cases are in court seeking to have the sugar company ordered to pay them for unfulfilled deals between them.

G4S is demanding more than Sh45 million for security services it offered for the last four months whereas Kenya Power is asking for Sh1.1 billion. In the case filed before Commercial Court, G4S claimed that it had not been paid even after securing the sugar firm.

“In breach of the terms and conditions of the contract between the two parties, the defendant failed to or neglected to pay in full to the plaintiff for the services provided as per the terms of the contract,’’ the suit papers filed by the security firm reads in part.

Mumias Sugar had entered into a security deal with G4S on May 1, 2011 in which it was awarded a three-year contract that was meant to end on June 30, 2014.

After the deal expired last year, the same was extended by four months and was meant to end last month.

According to G4S Legal and Claims Co-ordinator Anthony Mwadime, the two companies had agreed that the contract would be changed but upon agreement between the two, claiming that the extension of the service were in line with the terms that they had set.

He argues in his sworn affidavit that there was communication exchanged in terms of letters before the suit was filed. G4S wants the court to order MSC to pay the amount together with interest.

Kenya Power is seeking to have accounts and assets of the sugar firm frozen until the debt is settled. Kenya Power and MSC had brokered a deal six years ago, in 2009 in which it was to sell its surplus power and on the other hand have electricity from the national grid whenever its generators stalled.