Livelihoods at stake as sugar wars increase

December 20, 2015, 7:52pm

Sugarcane is loaded on to a truck at Matulo in Webuye before it is delivered to Nzoia Sugar Company in Bungoma in this photo taken on May 22, 2014. PHOTO | JARED NYATAYA | FILE NATION MEDIA GROUP  

By Walter Menya, the Daily Nation

The legal challenges against the privatisation of the five sugar companies will adversely affect the livelihoods of millions of Kenyans who directly or indirectly earn their living from sugar farming, the Privatisation Commission has said.

In an interview with Sunday Nation, the CEO of the Commission, Mr Solomon Kitungu, said the public should not view the suits as being against the commission. Rather, they will delay the exercise and impact negatively on the livelihoods that depend on the sugar sector.

“I am thinking of where we leave the five sugar companies. Not where we leave their privatisation,” he said. “We have undertaken adequate due diligence which informed our proposals and the decisions approved by the Cabinet and the National Assembly. We are not aware of any unsurmountable tasks ahead.”

High Court judge, Justice George Odunga, last week stopped the exercise after the Transition Authority (TA) moved to court accusing the Privatisation Commission of overlooking its input on disposing of the millers.

TA further argued that sidestepping them was in breach of the law.

The Council of Governors (CoG) has also stated that the exercise was in breach of the law since agriculture is a devolved function yet the national government was going ahead with the privatisation of the millers.

“All assets for the performance of devolved functions including shares, land and machinery are the responsibility of county governments as per Article 175(b), 187(2) and the Sixth Schedule of the Constitution,” chairman of the COG Committee on Agriculture Nderitu Gachagua, in a paid advert on December 16, said.

The COG also argues that the Cabinet did not consult them before approving the sale of shares in the said millers. “This move was therefore unconstitutional and any actions by the Privatisation Commission purporting to implement the (Cabinet) decision is null and void,” said Mr Gachagua.

Like TA, the COG also argues that their views were disregarded by the Commission.

Meanwhile, a Nairobi-based fire and mechanical engineering contracting company, Mather & Platt Kenya Ltd, in March petitioned the High Court for winding up of Muhoroni Sugar Company which is among the five millers earmarked for privatisation. The winding up petition filed by the Simba & Simba Advocates for the petitioners will be heard on March 11, 2016.

Other sugar millers set for privatisation are Sony, Chemelil, Nzoia and Miwani. The government wants to sell 51 per cent in each of the millers to strategic partners who would reinvigorate the sector.

Since two of the challenges are in court, Mr Kitungu said he would not discuss their merits or demerits. But he admitted the exercise would now take longer than anticipated. He is optimistic that the privatisation will proceed as planned.

“The main challenge is the time. Otherwise all issues will be resolved and the future operation of the companies determined as necessary to enable them to make their contribution to the economy,” said Mr Kitungu.

He said the commission had anticipated the challenges and incorporated solutions in the strategies. “Whatever is coming up will test our assumptions in this regard. We are going to rely on continued engagement as necessary,” he said.

In any case, not every person was going to be satisfied by the privatisation of the millers hence the legal challenges.