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Extend period of millers lease tender, Munya told

Muhoroni MP Onyango Koyoo addresses the media after a consultative meeting on public sugar factories at Nyang'oma youth resource centre on July 14

Sugar sector players from Kisumu and Nandi counties have called for extension of the period for expression of interest in leasing public factories.

They said delaying the tender process would enable them to understand the terms of leasing the factories. The stakeholders included local leaders, farmers, workers unions and transporters.

Led by Muhoroni MP Onyango Koyoo, the stakeholders said the tender period was not sufficient to get a competent investor. The current tender period ends on August 4.

The government plans to lease Miwani, Muhoroni, and Chemelil mills to private investors to revitalise the sugar sector.

Koyoo said the sector players agree to leasing on the condition that the process is transparent.

“We don’t want speed and secrecy in the process. There must be proper consultations,” he said.  The stakeholders opposed monopoly of the factories, saying each factory should be run by different investors.

Koyoo said the stakeholders' interests should also be given consideration as the major contributors in the sector.

He spoke on Monday during a stakeholder consultative meeting on leasing of the factories at Nyang’oma resource centre in Muhoroni.

Koyoo said leasing should be done in a manner that will address the challenges farmers and workers have been facing for years.

He reiterated that stakeholders must have a stake in the factories when they are leased. “We want investors who will make lives of farmers and workers better not miserable,” he added.

Koyoo said farmers, cooperatives and unions are the major shareholders in the sugar sector and their input is important to prevent any backlash.

The lawmaker, however, said the government must lease the factories to a competent investor with a reputation and financial muscle.

Last week, Agriculture Cabinet Secretary Peter Munya said the Cabinet had approved the leasing of Muhoroni, Chemelil, Nzoia, Miwani and Sony sugar companies for 20 years to process and develop cane on farms owned by the millers.

Munya said the ministry will invite bids from private firms for the lease of the five state-owned factories this month.

Koyoo, however, noted that details of leasing the factories should be made public for transparency and accountability.

The stakeholders also demanded that an investor taking over the Miwani factory should construct a new factory to make it more viable.

“Miwani with dilapidated machines is not economically viable. This, therefore, requires complete overhaul of the current machines to meet economies of scale,” a farmer said.

He questioned the speed at which the lease process is being undertaken before public participation.

“We don’t want secrecy in the process. All the cards must be put on the table. We want to know how those who will be awarded the lease are selected,” he said.

Chemelil Outgrowers Company chairman Samuel Bonyo called for a proper leasing structure for the job security of workers. “We must avoid cases where an investor will abandon crushing sugarcane and embark on a different business,” he added.

Bonyo said the land where the factories are built must also be well secured as they belong to the community.

“The investors must have the capacity to develop factories and cane, but not those who will take huge loans from banks then fail to pay to leave the factories and land to be auctioned. These are issues that must be put straight into the lease process,” he said.

Kenya National Federation of Sugarcane Farmers Muhoroni branch secretary Noah Opiyo called for public participation before the leasing process.

“The government needs to call stakeholders and discuss the leasing. It is completely a new arrangement which farmers must understand,” he said.

While supporting measures meant to put the factories back into the viability and to profit, Opiyo wants the leasehold period well-stipulated.

He also questioned the fate of the current farmers' arrears owed by the respective sugar factories.“We want to know who will pay the arrears, will it be the leasee or the government?” Opiyo said.

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