Twenty-nine companies have expressed interest to lease state owned sugar mills after government efforts to attract new investments into the sugar sub-sector called for private sector players to declare interest.
This will also pave way for the possible taking over of the struggling and heavily indebted entities by the private sector.
The companies now prequalified for the lease had presented their interest and documents online and other physically, when the government through an International Expression of Interest advertised on 10th July 2020 and closed the bidding on 3rd August 2020
A technical committee of officials drawn from various agencies under the Agriculture Food Authority (AFA) presided over the exercise of opening of the bids at AFA headquarters Wednesday.
Speaking during the exercise at the AFA offices, the Interim Head of Horticulture Crops Development Benjamin Tito who chaired the committee said some of the companies had six bundles of documents, while only one company presented a single document.
The opening of the bids comes one day after the Agriculture CS Peter Munya announced that the reform agenda in the sugar industry was still on, despite opposition from various quarters and especially the local leadership.
Munya had explained that the ministry received Cabinet approval to invite investors to take long-term leases on the five state-owned Mills namely Chemelil Sugar Company Ltd, Muhoroni Sugar Company (In receivership), Ltd, Miwani Sugar Company (In receivership) Ltd, Nzoia Sugar Company Ltd and Sony Sugar Company Ltd
The leasing model is different from the method of inviting strategic investors to buy a stake of the companies as proposed by the privatization commission.
Munya confirmed that after the opening up of the bids, AFA shall send out a Request for Proposal (RFP) to all the firms prequalified at the Expression of Interest stage and later the investors will be taken through an evaluation process of 28 days.
Some of the companies that presented their Expression of Interest (EOI) include local private companies among them Butali, Sukari, Kibos, Trans Mara and consortium of cooperative societies.
Only recently Munya said private sugar companies have been performing better compared to government owned mills.
Announcing the progress of leasing of the state-owned sugar mills at Kilimo House grounds Monday, the CS said that the sugar reforms are designed to help stabilize the sugar industry, implementation of the Sugar Regulations 2020 and the Sugar imports, exports and by-products regulations 2020.
He explained that the regulations seek to address sugar cane development plans, the milling capacity of millers, the establishment and functions of the sugar cane pricing committees and the implementation of sugar cane testing services and standards.
Last month, the government temporarily suspended the importation of the commodity due to an influx of imported sugar in the first half of the year which led to serious market distortions.
“We can have a sector that both rewards the farmer and makes sugar affordable to consumers. I urge all the stakeholders including the members of the public to support these historic efforts,” said Munya.