Court stops leasing of sugar companies

Companies

Court stops leasing of sugar companies

Thursday February 15 2024

The High Court has stopped an international tender inviting bids for long leases of State-owned sugar companies. PHOTO | SHUTTERSTOCK

The High Court has stopped an international tender inviting bids for long leases of State-owned sugar companies.

Justice Chacha Mwita put a freeze to the tender that was advertised by the PS Ministry of Agriculture on January 16, asking for prospective tenderers to bid for the leasing of the public sector-controlled sugar companies.

Mr Martin Nyongesa Barasa, who described himself as a public-spirited citizen said the decision was made abruptly without any consultation with the members of the public.

Read: State drops plan to privatise sugar companies

He said the public ought to have been consulted in deciding whether or not to lease the public sector-owned sugar companies as all sovereign power belongs to the people.

“The application herein is extremely urgent and is intended to stop the Respondents from breaching the right to public participation, legitimate expectation, and fair administrative action,” he said in the application.

Justice Mwita certified the case as urgent and directed the ministries of Agriculture and Treasury to file their responses and submissions within seven days.

“An interim order halting the tendering process under the International Tender Notice, No. MOALD/SDA/IT001/2023-2024, until April 19,” the judge said.

Mr Barasa said if the court failed to intervene, the government would proceed and illegally lease out publicly controlled sugar companies without any public participation.

He said the government did not invite views from the public before making the decision whether or not to lease the sugar companies.

He pointed out that in a letter on January 8, eight days before the tender was published, CS Treasury wrote a letter to the managing directors of Nzoia Sugar Company, Chemelil Sugar Company and South Nyanza Sugar Company Ltd, compelling them to pass resolutions to hand over powers to the ministry to enable them carry out the procurement of the leases for the respective companies.

Mr Barasa said the court has already issued interim orders suspending the implementation of Section 21 of the Privatisation Act, which gives the Privatisation Commission the exclusive authority to manage and implement the privatization programme.

He said the government had completely disregarded the said orders and was at an advanced stage of privatisation of the sugar companies.

He further said the ministry has no authority or power in law to direct the board by asking them to pass a resolution. 

“The 3rd Respondent (PS Agriculture) is in clear abuse of delegated sovereign power as this would mean that he is just a puppeteer at whose whim everyone falls,” he said.

Read: Sugar firms pay staff, farmers arrears

The petitioner said within the unreasonably short time frame, the Boards of the respective sugar companies sent out notices of board meetings, then set down a date for the meeting between January 8 and 11, 2024 which was only three days apart.

“To the extent that the aforesaid actions by the Respondents were conducted without issuing notices, without giving reasons in writing, without according the public a right to be heard, the same breached Article 47 on the right to fair administrative action which is illegal and unconstitutional,” Mr Barasa said.

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