By JAINDI KISERO, jaindikisero@gmail.com
If we are going to sell Webuye-based Pan African
Paper Mills to a timber merchant, let us first force them to produce a
feasible business plan committing them to reviving the plant within a
specific time frame.
From what I gather, Panpaper is just about to be sold to one of the largest timber merchants in East Africa, T.S. Rai Ltd.
Isn’t it just obvious that in seeking to
purchase Panpaper, the only value proposition for the timber merchant in
the deal is the forest licence from the Kenya Forest Service?
It is foolhardy to put a long-term forest licence
into the hands of a timber merchant .Who is going to monitor possible
diversion of timber harvested for paper manufacturing to timber
business? It is a clear case of conflict of interest.
Until December 2003, Panpaper operated under a
30-year licence, granting it access to subsidised wood stocks from
government forests. When the licence expired, the company started
operating on one-year rolling licences.
I gather that the Rai Group is now demanding a raft
of ‘sweeteners, ’ including a long- term forest licence, before it
can put pen to paper on this transaction.
Considering that the ultimate objective is to
re-open Panpaper, what is the point of selling these assets to a timber
merchant whose prime motive is to access government forests on the
cheap?
Does it really make sense to - in the name of
reviving the company- grant a private timber merchant a 30-year
licence to harvest wood from government forests at subsidised rates?
What do we really want to achieve: a
commercially viable company running on a profit basis or a
state-controlled entity playing a wider developmental role in the
economy of Western Kenya?
We must not forget that in the initial stages, the
plan by the government was to buy off the company from long-term
lenders and to restructure it and turn it around into a fully-fledged
parastatal operating under the Industrialisation ministry.
As a matter of fact, in July 2013, the Treasury
and the Office of the Attorney- General even went to the extent of
incorporating a new government-owned company by the name Webuye Paper
Mills Ltd, which was to take over assets of the company from
long-term lenders.
At one stage, the government even set aside Sh900
million for the purpose of paying the company’s long term lenders. But
somewhere along the line, the idea was dropped.
I have a suggestion. Instead of selling Panpaper to
a timber merchant, let us think outside the box and use the vast land
to set up industrial parks and a special economic zone on the land
currently occupied by Panpaper.
Webuye town is an attractive location for an industrial park.
You have adequate land, a railway –siding, good road networks and proximity to Kenya’ largest trading partner - Uganda.
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