End land tussles with Kwale sugar investor, State told

Kwale International Sugar Company Ltd, February 7, 2019. [File, Standard]

Kwale residents have called on the government to resolve an impasse surrounding the operations of Kwale International Sugar Company (Kiscol) in a bid to attract more foreign investors. 

The residents urged the State to support the multi-billion shilling agro-processing project to attract external investments to the county. 

“We want the government to intervene and iron out all the pending issues so that Kiscol operates to its full capacity,” said a resident and cane farmer, Bakari Mwachuo.  The project encountered challenges after it was designed to sit on 42,000 acres that were once occupied by the Maddhvani Group, but the government made 15,000 acres available for investment. The Madhvani Group left Kwale in 1988, years before Kiscol invested its modern processor in the area. 

The structure that had been agreed upon with the government was that the sugar firm would get 15,000 acres for the nucleus estate, and the remaining 27,000 acres would be allocated to local occupants under the resettlement plan. 

Each household would have received 5.5 acres as an outgrower, which would have included three acres for producing cane and the rest for subsistence farming and settlement. 

However, the challenge emerged when the resettlement plan was never implemented, and the 27,000 acres reserved for outgrower households were not transferred. The community remained where it had been, and some individuals even continued to occupy the 15,000 acres allocated to Kiscol, interfering with the investment plan. 

It was in the news recently when, after a protracted legal battle, the government was ordered to pay Kiscol $185.6 million (Sh24 billion) in damages for breaching the 2007 land sublease agreement, which had affected the firm’s production and land access. 

“There is an urgent need to address the challenges and ensure that the project is fully back on track to create employment in this region,” said a resident, Hamisi Kasirani. 

The government had designed the resettlement plan and breached it, leading to challenges in the development of the sugar project.  The integrated sugar processing and agribusiness facility in Kwale County is a $400 million (Sh52 billion) estate that spans 5,500 hectares of cultivated cane and operates a 3,300-tonne-per-day sugar mill. 

It has an 18-megawatt bagasse power plant and advanced subsurface irrigation, which was the first in the country. Kiscol was structured with promoters, the Pabari Group of Kenya, and Omnicare Ltd of Mauritius and brought hope to communities in Kwale County. 

If the land allocation arrangement had gone through, the 15,000 acres would be fully under cane, and thousands of smallholder sugar farmers would be integrated into a modern cane value chain under the 27,000 acres. 

Residents believe that the Southern Coast sugar belt would be flourishing with agricultural and associated business activities, and farmers would be minting money. 

The firm had introduced fast-maturing sugarcane, which takes 12 months instead of the 18 months in the Western sugar belt. 

At full design capacity, Kiscol would close about 100,000 tonnes of Kenya’s annual sugar deficit or close to 10 per cent of the gap that the country fills with sugar imports.