BY SAM ALFAN.
A farmer’s cooperative society has told the High Court that a Sh36 billion bid by West Kenya Sugar for lease of Mumias Sugar Company was not genuine but meant to spoil the process for other bidders.
In submissions filed in court, Gakwamba Farmers alleged that the company did not demonstrate how it was capable of raising the Sh150 million rent, per month.
This is because West Kenya has been making losses in excess of 914,482,799.22 within three years, due to Covid-19 pandemic.
Lawyer Danstan Omari said the company had admitted in an Employment court dispute that the enforcement of an award of Sh 507,488,511 granted to former employees would cripple the firm.
Omari argues that with the admission by the company that they made losses to a tune of almost a billion within three years and could have crippled by paying half a billion within three years during covid pandemic and which pandemic is still ravaging, the firm was therefore not in a capacity of giving 1.8 billion per year and 36 billion for 20 years.
“I am persuaded that the 6th plaintiff (West Kenya Sugar Co.) bid of Sh36 billion was a spoiler bid and they do not want to run Mumias Sugar Co. limited. The West Kenya application is an abuse of court process, frivolous, scandalous and devoid of any merit and should be dismissed forthwith with costs,” says Gakwamba.
The farmers further state that operationalisation of Mumias Sugar is in the benefit of farmers and that it’s halting has dire consequences to the farmers and the surrounding communities.
“To the best of my knowledge, the bid of Sh 36 billion(Sh 1.8 billion per annum) by West Kenya Sugar Co is not tenable or practical and was purely put as a spoiler bid,” he said.
He said the Agriculture and Food Authority report 202, West Kenya Ltd had produced 318,801 Metric tonnes of sugar in three years, that is 77,665 MT, 108, 844 MT and 132,292 MT for 2017, 2018 and 2019 respectively and made losses in excess of Sh934,482,799.22.
Omari said to generate the surplus amount to pay the lease rent on Sh1.8 billion per year, the company is required to produce three times the amount of sugar production which is not practically possible for Mumias sugar, which has the capacity of producing sugar is 266,000 tonnes.
Gakwamba adds that a thorough and rigorous process was done before arriving at the successful bidder being the Sarrai group as demonstrated in the replying affidavit of Ponangipalli Venkata Ramana Rao and KCB bank dated January 19, 2022.
