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Devki withdraws its Mumias Sugar leasing bid after public outcry

BUSINESS
By Mireri Junior | June 4th 2021

Some of the Mumias Sugar factory cane crushing machines are rotting away. [File, Standard]

Devki Group of Companies has withdrawn its bid to lease the troubled Mumias Sugar Company after stakeholders raised accountability questions.

In a statement seen by The Standard on Friday, June 4, the firm through its chairperson Narendre Raval said its withdrawal was to give room for public-run bidding as requested by cane farmers and local leaders.

“Given the ongoing public interest which the matter has attracted and the call for a publicly run bidding exercise, we have found it worthwhile to take out our application,” read the statement.

Raval defended the company’s interest in Mumias, adding that their bid was above board and was sanctioned by the receiver-manager.

“As a local investor with a deep understanding of the local operations, he said they had expressed interest in reviving the miller following an invitation by the Receiver Manager,” he said.

Devki, however, said they will express interest should the stakeholders agree on a bidding exercise, saying their interest is to revive the sugar miller and ensure it is running for the benefit of all the stakeholders.

The proposed takeover of the struggling factory drew mixed reactions from various stakeholders with the majority calling for the process to be halted.

Accountability

Cane farmers from the region and local politicians have accused Kenya Commercial Bank (KCB) which placed the troubled miller under receivership of unilaterally awarding the multi-million tender without following due procedure

Kenya National Alliance of Sugarcane Farmers Organisation (KNASFO) chairman Saulo Busolo has questioned the experience of the investor in the sugar sector.

“We should not gamble with the critical sector of our economy. If the cane growers are ruined, everything else will be in a mess,” said Busolo.

Kakamega Senator Cleophas Malala sought a statement from the Senate’s Committee on Agriculture, Livestock and Fisheries on the state of affairs of the troubled company and reported recovery measures.

“I call on the committee to address the current state of the company’s asset and liabilities while indicating the value of the core and non-core assets and reveal which entity undertook the valuation,” he said.

Malala also urged the committee to furnish the House with details on the procedure to be followed by the government in selling its stake in the company.

“Specifically, the committee should address the bidding process including who the bidders were, when the bidding took place, when the evaluation of submitted tenders was done, what criteria was used to pick the successful tenderer,” he said.

Bungoma Senator Moses Wetangula while weighing in on the matter said the region’s politicians are not opposed to investors taking over Mumias Sugar Company, but wanted accountability.

“What is the fate of the nucleus land of Mumias which was donated to the government by locals when the factory was setting up? Is the new investor coming to compensate them?” he posed.

Wetangula also asked who is going to account for Sh2 billion bailout cash given by President Uhuru Kenyatta in the run-up to the 2017 General Election once the firm is handed over to the intended investor.

ANC leader Musalia Mudavadi questioned Devki’s bidding, adding that the plan did not go through public participation.

 “I am calling on KCB to be transparent and effectively engage farmers and locals who are critical stakeholders in ensuring that the once leading sugar miller is brought back to glory,” he said.

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