Privatisation Commission chairperson Henry Obwocha. PHOTO | SALATON NJAU | NMG
The Privatisation Commission plans to complete the sale of five
state-owned sugar mills by August 2018, removing the most important
excuse Kenya has used to lock out cheap sugar from regional economies.
The commission said consultation with stakeholders has started and it will last two months.
There
after, the bids will be re-advertised for interested parties to apply
for a stake in any of the five millers; Sony, Chemelil, Nzoia, Muhoroni
and Miwani
Kenya has been enjoying safeguards from the
Common Market for Eastern and Southern Africa (Comesa) for more than one
and a half decades.
Privatisation was one of the conditions agreed with the Comesa ahead of opening up the market.
“We
target August 2018 to have handed these mills to a strategic investor,”
said Jacqueline Muindi, acting chief executive officer at the
Commission.
Court case
Kenya
was given a two-year safeguard extension last year after the country
argued before Comesa Council of ministers that the process of
divestiture from government mills had been stalled by a court case.
The Council of Governors moved to court in 2015 to challenge the sale citing lack of consultation.
They were also opposed to the formula used in the allocation of shares.
The
government plans to sell a 51 per cent stake in the companies to
strategic investors and reserve another 24 per cent for farmers and
employees.
The government will then sell the remaining
25 per cent in the milling companies through an initial public offering
once the factories are profitable.
Retains stake
The 25 per cent has become a bone of contention with governors opposing the State retaining the stake.
Mrs
Muindi said the commission will consult governors during a stakeholders
meeting and if they fail to reach an agreement, it will move to court
to seek direction.
Chairperson Henry Obwocha said
shortlisting of the pre-qualified firms, invitation of bids and
ultimately announcing the strategic partners will be done once all the
due process has been followed.
The privatisation
strategy was approved by the National Assembly in 2015 a move that is
required to open up factories to strategic partners who will come with
financial, technical and operational expertise in exchange for a 51 per
cent stake.
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