Sarrai Group Wins Over Julius Mwale In Mumias Sugar Lease Deal

Sarrai Group takeover of Mumia Sugar through a lease agreement will proceed after the Public Procurement Administrative Review Board rejected an appeal to cancel the tender due to lack of jurisdiction.

According to the board, Mumias Sugar does not fit the description of a public entity due to the fact that through the National Treasury, the Government neither fully owns nor has a controlling interest in the miller because of its 20.04% shareholding

Tumaz and Tumaz Enterprises had lodged a Request for Review of the tender procedure on December 29, 2021 with a view to have the tender nullified over irregularities.

Tumaz is affiliated to businessman Julius Mwale.

The firm argued that while the eight bids were opened in a transparent manner and in the presence of the eight bidders, the order by High Court judge Justice Okwany on August 30, 2021 that the tender documents be made available to all parties and the public were not followed.

The firm says the Ponangipalli Venkata Ramana Rao, the Receiver Manager and Administrator of Mumias Sugar In Receivership did not share any contents of the tenders but instead requested all the bidders’ representatives present to sign the financial pages of the eight tenders submitted and opened.

Tumaz and Tumaz Enterprises further alleged that there was lack of transparency in the opening of the tenders because the opening of the bids was done in secrecy without disclosing the contents of the tenders other than the financial aspects.

The lease

Ramana Rao who was appointed the receiver manager for Mumias Sugar invited bids for leasing of the millers’ six assets on August 2, 2021 with submission deadline set for August 31, 2021.

The tender attracted eight bidders among them, Tumaz and Tumaz Enterprises, Sarrai Group, Pandhal Industries Limited, Kruman Finance Limited, Suicriere de Mascareugms Limited, New Mumias Sugar Company Limited, West Kenya Sugar Limited and Kibos Sugar & Allied Limited.

Subsequently on December 22, 2021, Sarrai Goup with a bid of Kshs. 11.5 billion was announced the winner of the tender with the award excluding the leasing of the Ethanol and Cogen plants prompting Tumaz and Tumaz to lodge a Request for Review of the tender process before PPARB.

According to Tumaz and Tumaz Enterprises, it had the most competitive bid of Kshs 27.6 billion while the Sarrai Group had the third highest bid.

The Applicant said the tender process was tainted by fraud, mistakes and illegalities thus its request to have the tender process cancelled or it be awarded the tender upon review as stated in its Request for Review

Ramana Rao in its response objected to the to the Jurisdiction of the Board to hear and determine the Request for Review as Mumias Sugar is not a public company as per the Public Procurement and Asset  Disposal Act 2015.

Each party is expected to bare its own cost in the matter, the Board ruled.