HTTP 200 OK
Allow: GET, PUT, PATCH, DELETE, HEAD, OPTIONS
Content-Type: application/json
Vary: Accept
{
"id": 240426,
"url": "https://info.mzalendo.com/api/v0.1/hansard/entries/240426/?format=api",
"text_counter": 187,
"type": "speech",
"speaker_name": "Mr. Muturi",
"speaker_title": "",
"speaker": {
"id": 215,
"legal_name": "Justin Bedan Njoka Muturi",
"slug": "justin-muturi"
},
"content": "Thank you, Mr. Deputy Speaker, Sir, for giving me this chance to continue moving this Motion. I had given the background information regarding the issues that the Committee was examining. Indeed, it is important to recapitulate on some of the issues. During the year ended 30th June, 2001, the Sugar Development Fund incurred a loss totalling to Kshs54,843,925 on the export of sugar procured from Nzoia and Chemelil Sugar companies on the ground that in order to secure the European market, it was in the national interest and unavoidable to incur such losses. However, no evidence has been provided to confirm that the European Union (EU) sugar market was secured through that action. The Fund further imported 2,000 metric tonnes of sugar from the third lowest tenderer, ED&S Man Sugar Company Limited of South Africa at the price of US$305 per metric tonne all valued at US$660,000 or the equivalent of Kshs52 million at the then prevailing exchange rates. However, records which were made available showed that Hira Enterprises of Brazil and Gandsnewflux CC of South Africa had quoted to supply and deliver the sugar at US$160 and US$188 per metric tonne, respectively. It was, however, found out that had the Fund purchased the sugar from the lowest bidder at the price of US$160 per metric tonne, there would have been a possible saving of Kshs26,787,880. Although the sole aim of the importation was to stabilise the availability of sugar in the local market, the consignment was released into the market six months after it had arrived at the Port of Mombasa, when other Common Market for Eastern and Southern African (COMESA) countries had gained access to the Kenyan market with cheap sugar. The purpose of the importation was, therefore, defeated, and that led to over-flooding of sugar on the local market and, thereby, affecting local sugar companies. In the circumstances, therefore, and in absence of any plausible explanation for those imprudent decisions, there is no justification for the total loss of Kshs81,631,805 made by the Fund. That comprised of the export loss of Kshs54,843,925, and an import loss of Kshs26,787,880. The Committee took evidence from the Chief Executive Officer (CEO) of the Kenya Sugar Board (KSB) and made the following observations:- 2442 PARLIAMENTARY DEBATES July 27, 2006 As much as the importation was intended to meet and secure the European Union quota, that justification, eventually, did not hold water as the sugar was not only sold in the local market and thereby defeating the sole purpose for the importation, but it also deteriorated the already flooded local sugar markets. In the circumstances, the Sugar Development Fund made an import loss as shown above. Even though the Board, the parent Ministry and the Ministry of Trade and Industry, viewed the justification of meeting the European market as urgent, Government procurement procedures were, nevertheless, flouted! The approval of the Directorate of Public Procurement not to employ international open tendering in procuring the sugar was not sought. Finally, the Board seems to have been used by the parent Ministry and the Ministry of Trade and Industry as a conduit for delivering sugar into the country at zero-rated import duty under the guise of meeting the European Union market quota. In view of the foregoing, and because most of the evidence is contained in the Report, minutes and deliberations of the Committee in the HANSARD - it is in the library - the Committee recommends that the Director of Criminal Investigations Department (CID) urgently institutes investigations into the manner in which the 2,000 metric tonnes of sugar was imported from South Africa through MSED and F Man-Sugar Limited in South African, with a view to preferring charges against any person found culpable in the irregular transaction which made the Sugar Development Fund (SDF) to incur a total loss of Kshs26,797,880. The Treasury should grant a suspension to the Board for the loss of Kshs26,787,880. We were informed that the Board, through the Fund, has sought the same from the Treasury! Mr. Deputy Speaker, Sir, this Special Report is in two parts. The first part primarily related to the issue of the losses incurred by the SDF, as captured by the Controller and Auditor-General in his report for the financial year ending 30th June, 2001. The rest of this report comprises of evidence taken by the Committee, relating to the execution of importation of sugar into Kenya pursuant to Legal Notice No.2 of 2006 - Legislative Supplement, which has been reproduced in the report. It is important to observe that, in the course of preparing the 13th PIC Report, which was tabled before this House last year, the Committee addressed the issue of sugar importations from COMESA, within the arrangement of PTA. It was in that process that it became apparent, towards the end of last year, that, indeed, there was going to be the issue of further importations into the country this year. The Committee directed the KSB to meet urgently, as the body mandated under the law--- For clarity, Section 33 of the Sugar Act, 2001 reads:- \"The Minister may, in consultation with the Board, make regulations generally for the better carrying out of the provisions of this Act and, without prejudice to the generality of the foregoing, such regulations shall provide for: (a) The regulation and control of the production, manufacturing, marketing, importation or exportation of sugar and its by-products. (b) The forms of licences to be issued under this Act and the form and manner of application therefor. (c) The fees which may be charged for any activity relating and incidental to the development, products, marketing and distribution of sugar and its by-products.\""
}