Questions over government's secret leasing of sugar factories

Nzoia Sugar factory main gate on August 30, 2023. [Benjamin Sakwa, Standard] The sugar sector is whirling towards uncertainty as stakeholders in the sector reject President William Ruto's efforts to revive the sector through leasing to private investors. While the president and his allies are optimistic that they are on the right track, controversy surrounds the decision by the government to lease out state-owned factories to private investors. Leaders and farmers from the sugarbelt regions of Western and Nyanza regions have accused the president of attempting to install his cronies to run the sector. So bad is the situation that farmers in the region have threatened to stop growing cane until the lease of Muhoroni, Chemelil, and Nzoia sugar is halted. The move has deepened the crisis in a sector riddled with several controversies and has been struggling to stay on its feet for several years. Past attempts, including efforts to implement a sugar task force report that was developed during former president Uhuru Kenyatta's administration, have all crumbled. On Wednesday, a section of farmers moved to court to challenge the decision to lease Chemelil and Muhoroni companies. In a matter filed under a certificate of urgency through Lawyer Kenndy Echesa Lubengu of Wamalwa and Echesa Co.Advocates at Kisumu High Court, the farmers want the project stopped. Olgah Aoko, Charles Ochieng, Dancun Onyango, and Edward Onyango, the petitioners in the case, have accused the government of failing to conduct public participation. They have listed the Cabinet Secretary for Treasury, the Principal Secretary, the Principal Secretary for the State Department for Agriculture, as the third respondent, and the Attorney General as the fourth respondent. Additionally, they argue that the respondent had indicated to brief the public, including farmers and workers as well as leaders, on the process and hold public participation, which has not taken place to date. Furthermore, the petitioners argue that the tendering process does not demonstrate value for money as required under Article 227 of the Constitution and the Public Procurement and Asset Disposal Act,2015, thereby exposing public assets to the risk of mismanagement and loss. Similarly, in Western, sugarcane farmers have opposed the lease of Nzoia, stating that no public participation was done and the process was done in total secrecy, alleging that some prominent people in government want to grab public land and millers' assets. Simon Wesechere, Deputy Secretary of the Kenya Federation of Sugarcane Farmers, argues that the government is acting in impunity and there is a plot to grab public properties through a dubious and rushed process. "As farmers, we are not against leasing; it is a good thing, but we were not involved, and we see the leasing of Nzoia Sugar as an attempt to grab its nuclear land and other assets by powerful people in the government," said Wesechere. "We want the details about the bidding process to be made public because we do not know who won the tendering process. The government cannot be the buyer and seller at the same time," he added. Richard Ogendo, Secretary General for Kenya Sugarcane Growers Association, termed the move by the government to lease state-owned factories in secrecy as a plot to deceive farmers and steal from the public. "As farmers we said we want the tendering process, shortlisting and the winner of the tender be made public, but we are hearing is that so and so has won the leasing process and we don't know who the person is and how it was done and arrived at the cponclusion," said Ogendo. The officials questioned why some of the investors who have won the leasing process have yet to declare their victory and plans. Nzoia Sugar Company has been leased to Tycoon Jaswant Singh Rai for 30 years, a move farmers have opposed, arguing that the move was done in secrecy and that unnamed people from the government are out to grab public land and assets belonging to the factory. A section of leaders wants President Ruto to revoke the leasing of Nzoia Sugar Factory to Rai, claiming that the sugar sector in the region is being monopolised by one investor. Led by Lugari Member of Parliament (MP) Nabii Nabwera, the lawmakers asked President Ruto to cancel the leasing agreement and readvertise, stating that they will not allow the tycoon to take control of the sugar sector in the region that is dominated by the venture as its economic backbone. Navakholo MP Emmanuel Wangwe, the sponsor of the Sugar Act 2022, asked CS for Agriculture, Mutahi Kagwe, to publicize the process of leasing the factories. "When MPs said they don't like a certain investor, we want to be furnished with information on what happened because it is provided in the law. We need to understand how many people participated in bidding and who won and why, so that when leaders know the truth, they can now give support to whoever emerged on top, but it should not be done in secrecy," said Wangwe. The lawmaker, however, supported the leasing process as one way of revitalising the sugar sector and having good management to run the sugar factories, stating that Mumias Sugar factory is doing very well, courtesy of the leasing process. However, Wangwe blamed CS Kagwe for not fast-tracking the implementation of the sugar levy after the Sugar Bill came into law. Last week, leaders led by DAP-K Party Leader Eugene Wamalwa, his deputy Wafula Wamunyinyi, businessman Zacharia Barasa, and lawyer Ken Echesa, said the government's decision to lease the company to a private investor for 30 years was rushed and did not reflect the voice of sugarcane farmers and stakeholders in the region. "There was no public participation, no value for money, and no consideration for the livelihoods that depend on this factory. You cannot lease a community asset without listening to the people," said Mr Echesa. Trans Nzoia Governor George Natembeya termed the move as not a viable solution to what is ailing Nzoia Sugar Factory. "We have seen someone has been given 30 years to run our factory, Nzoia, which has been leased. That is not the problem that is bedevilling our factory; we need good leadership, farmers, and the factory needs to be supported," said Natembeya. Yesterday, Nzoia Sugar Company's board chairman Alfred Khang'ati said the Rai Group is poised to take over the operations of the Bungoma-based sugar mill on a 30-year lease agreement.

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