House summons businessman in row over Miwani Sugar Factory

By GEOFFREY MOSOKU

Parliament has summoned a private investor who lays claim over Miwani Sugar Factory and has since moved to court to block the State from privatising the firm.

The Departmental Committee on Agriculture wants Birey Singh to explain his objection to the sale after he moved to the Appeal Court last year. Birey lost a suit against the Kenya Sugar Board and the Government at the High Court.

“We want the investor  to furnish the committee with his claims as we seek a speedy resolution into the dispute derailing the process of privatisation,” chairman Ayub Savula said.

Mr Savula said apart from Birey, the committee will meet the Treasury Secretary Henry Rotich and AG Githu Muigai next Thursday to get the legal status of the case. The committee met Agriculture Secretary Felix Koskei last week on the matter.

Savula said their inquiry is not meant to undermine the court processes but seek a solution to the dispute and expedite privatisation of the sugar industry ahead of March 2014 deadline set by Comesa.

The Lugari MP warned the country’s sugar industry may collapse if the deadline is not met as uncontrolled sugar imports may flood the market.

Apart from Miwani, other sugar factories that are lined up for privatisation include Nzoia, Sony, Chemilili and Muhoroni. The agriculture committee chair said Parliament has also ordered a fresh valuation of the five factories to ensure the Government does not lose any revenue in the process of disposal.

“The valuation was done about two years ago when the Government intended to sell the factories but the value has now appreciated, necessitating a re-valuation by the Privatisation Commission,” he said.

Savula warned that Kenya may not get another extension during the next Council of Ministers meeting if the state does not show willingness and prove to its COMESA partners that they have made key steps towards privatisation. The Lugari MP said privatisation will pump more money and create efficiency into the sugar industry by revamping it and putting it almost at par with other major sugar producers in the world. Kenya remains a high cost sugar producer compared to regional competitors.  Savula said Kenya uses Sh56, 311 ($646) to produce one tonne of sugar while the same is produced at Sh26,150 ($300) in Brazil and about Sh30,509 ($350) in Malawi.