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Two House committees have commenced a one-week long stakeholder engagement in western and Nyanza regions as part of the efforts to clear the way for the government to revive five cash-strapped State-owned sugar companies.

National Assembly’s committee on Finance and Planning and that of Agriculture will from tomorrow meet with the management of the companies, farmers, local leaders among other players in the sugar sector. Finance committee chairman Kimani Kuria said the meetings are aimed at subjecting the matter to public participation as required.

“We will be holding meetings in Kisumu from Tuesday to listen to the people to help the government revive the companies,” he said.

Kuria said the committees will also meet the management of the Agriculture and Food Authority (AFA) and sugar board and later hold meetings with the Kenya Revenue Authority and the National Treasury to hear their views on the revival plan of the companies.

“We have called the meeting so that we can make sure that the revival of the companies is fair and transparent,” he said.

The move comes hardly a week after the National Treasury sought the approval of Parliament to write off loans and tax penalties worth Sh117.64 billion accrued by five sugar companies in its bid to revive the industry.

National Treasury Cabinet Secretary Njuguna Ndung’u in a memorandum to parliament said that the move is in line with the cabinet decision seeking to have the loans done away with.

The five sugar industries namely; Nzoia Sugar Company, Chemelil Sugar Company, Miwani and Muhoroni sugar companies currently under receivership and South Nyanza Sugar Company.

Of the Sh117.64 billion, Sh65.77 billion relates to loans owed by the five mills to Government of Kenya and Kenya Sugar Board /commodities fund, Sh50.144 billion relates to tax penalties and interests as at June 30 this year while Sh1.71 billion relates to balances owed to farmers.

Reads the memorandum: “In view of the above, the National Treasury submits the Memorandum on Action plans to revive and commercialise the State-owned sugar.”

Political interference

Ndung’u explained that his decision is based on the fact that despite the government being involved in the sugar industry, lack of private sector orientation and political interference have been cited as the reasons that have led to low levels of productivity and investment in the sector.

Last month, the Cabinet set aside plan to privatise the State-owned sugar companies, instead approving the revival and commercialisation of Nzoia, Chemelil, Miwani, Muhoroni, South Nyanza and Mumias Sugar companies.

During a meeting held on Tuesday and chaired by President William Ruto, the cabinet noted that the decision sets the sugar sub-sector on a path of renewal. If parliament approves the proposal, the State-owned entities would be operated under a lease and operate framework.