Govt to revive industries, says Raila

March 15, 2009 12:00 am

, BUNGOMA, Kenya, Mar 15 – Prime Minister Raila Odinga has said that the government would inject additional resources into collapsed industries in Western Province in a bid to revive them.

Addressing a series of rallies in East and South Bungoma districts on Saturday, the Prime Minister Raila Odinga observed that the collapsed industries had rendered thousands of people jobless, increased poverty levels and contributed to food insecurities.

 “The government has identified the cause of these problems and has come up with measures of resuscitating these enterprises,” he added.

He singled out the collapse of Panpaper industry in Webuye and Kitinda dairy in Bungoma South district saying it was unfortunate that many jobs had been lost with their closure  affecting the livelihoods of thousands of people who depended on them either directly or indirectly.. 

At its peak, the Panpaper mill provided a source of livelihood to more than 30,000 residents of Webuye  town. The Government has unsuccessfully tried to bail out the mill on two previous occasions with a preliminary audit report indicating that  the 40 year old company collapsed after  managers embezzled money at the largest paper producing mill in East and Central Africa.

The closure of the giant paper mill last month was hastened after it failed to foot more than Ksh 100 million in electricity bills which led to disconnection of power to the plant, resulting in the loss of 2,000 jobs. 

The technical management team from the factory, a majority of whom were foreigners have also fled.

The Premier who was on a fact finding tour of development projects in parts of the greater Bungoma district also visited Nzoia sugar factory and the Kitinda dairy.

Said the Premier, “We are  concerned by the state of sugar industries like Nzoia ,Mumias , Muhoroni  Chemelil, which are either closed down or performing poorly  and we shall come up with a cabinet position next week on how to make them economically viable.” 

At Nzoia sugar company, Mr Odinga said there was need to increase the milling capacity of the factory from the current 780,000 tons per year.

“This will ensure the factory takes in all the 1.4 million tons of cane produced in the company’s zone yearly,” he added.

He was told that the company’s total indebtedness to the Government is Sh20.3 billion that includes a Sh12 billion loan portfolio of which Sh1.1 billion is a loan from the Kenya sugar Board, Sh7.5 billion is accumulated interests and Sh0.9 billion is Tax arrears and penalties incurred as of August 2003.

It was again a litany of failed expectations at Kitinda dairy which closed down in 2001 having accumulated an electrify bill of Sh2.6 million among other unfulfilled financial commitments. At one time, the plant which was acquired through Kenya-Finland cooperation processed 16,000 litres of milk per day.

Noting that the government would revive the plant, the Premier noted that  it had facilitated a loan waiver on the electricity bill to KPLC from Sh2.6 million to Sh900,000. “The Government has also facilitated a loan waiver of Sh54 million by the cooperative Bank of Kenya,” he added.

The Premier heard that the society requires Sh78 million to jump start the operations to the original capacity of 16,000 litres per day and a further Sh38 million to upscale the plant to 50,000 litres per day.

Mr Odinga pointed out that the revival of the factory would offer indirect employment to 10,000 farmers, improve on food security and poverty reduction and enable the farmers to generate more income through value addition.


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