Kenyan government would not be involved in Pan Paper's day-to-day operations if shuttered mill in Webuye is sold, says Cabinet secretary; of five bids received, one that stands out is Kenyan investor with vast paper industry experience, technical ability

Debra Garcia

April 21, 2014 (AllAfrica) – The troubled Pan Paper milling factory could be up and running by next month if privatisation plans by the government go through. Industrialisation and Enterprise Development Cabinet Secretary Adan Mohammed told Parliament's Finance, Planning and Trade committee that the government is in talks with prospective bidders to revive the troubled company.

However, Mohammed did not disclose the exact cost of the sale of the largest paper factory in the region that closed in 2009 after it run into financial problems.

"The government is in the process of engaging the potential investors and we expect the agreement to be reached before the end of May. We expect the private sector to come in and inject money to revitalise its operations," Mohamed said.

It is estimated that the planned sell that has attracted five local and foreign financial institutions is in billions of shillings. However, sources said the government has zeroed in on a Kenyan investor of Indian origin to takeover the factory.

The investor said to have a vast experience and technical ability in the paper industry also has interests in Tanzania. Mohammed failed to justify the economic viability of the process after he was put to task by committee members who sought to know whether the privatisation was politically motivated.

Teso South MP Mary Emaase said the closure had caused economic pain to the over 80,000 individuals affected by employees who directly drew their source of livelihood from the firm before it was closed in 2009.

"Is there any hope that the matter will be resolved and can the company be revived in any form? What is the timeline and how soon?" aske Emaase.

The Cabinet secretary said that if the deal goes through, the government will not be involved in the day to day management of the firm. He said the plant will be handed over to the new investors once the financial evaluation is complete.

Previous arrangements have failed because of past involvement by the government in the day to day management. "We are in the right track because the government will not have any say in the operations other than being a referee," said Webuye East MP Alfred Sambu, in whose constituency the factory is located.

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