Energy Cabinet Secretary Opiyo Wandayi has defended the government’s decision to lease ailing state-owned sugar mills to private investors arguing that the move will boost the industry and bring an end to decades of financial losses.
While speaking in Bolo Catholic Church in Nyakach Constituency, Kisumu County, Wandayi conceded that public-owned sugar mills have been in a vicious cycle of losses that required constant bailouts from the government but never attained sustainability.
The initiative, Wandayi emphasized, aims at putting end to the loss-making cycle and ensuring prompt payments to sugarcane farmers and factory workers.
“For years, our state-owned sugar factories have been operating in massive losses. Year after year, the government injects cash, but a few months later, they become loss-making ventures again. That has been the trend,” Wandayi stressed.
The CS reiterated that private sugar millers such as Kibos, Butali, West Kenya, and Transmara have always made profits, paying farmers and workers on time, as opposed to state-owned factories.
“How come private sugar millers continue to post profits, pay farmers on time, and sustain their workers, but those owned by the state sink? That is why the government made this bold move to restructure this vital sector,” he explained.
The leasing initiative, Wandayi added, is designed to enhance the profitability and efficiency of the sugar industry as well as stabilize the sugar belt counties’ economy.
He appealed to all Kenyans to embrace the plan, noting that further consultations with county governments were ongoing ahead of leasing.
“I call upon our leadership and the public to endorse this development. Our citizens cannot wait to receive money in their pockets anymore. We must make our sugar mills viable,” he continued.
The move follows complaints by some of the leaders on issues of transparency and employment security in the privatized mills with CS Wandayi promising that the government remains open to listening even as it demanded long-awaited reforms.
He stated that the cabinet had approved and authorized leasing of Muhoroni, Sony, Nzoia, Chemelil, and Miwani Sugar Companies on a 30-year Public-Private Partnership (PPP) structure.
Chemelil Sugar Factory has been leased to Kibos Sugar & Allied Industries Ltd while Muhoroni has been handed over to Kipchimchim group of Companies under the West Valley Sugar Company for 30 years.
By Robert Ojwang’
