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Stakeholders oppose concession of Ajaokuta Steel Company

By Francisca Oluyole on 16/04/2018

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•Ajaokuta Steel Company
•Ajaokuta Steel Company

 Experts in the Mining Sector have said that any attempt by the Federal Government to concession Ajaokuta would lead to corruption and mortgaging the security of Nigeria.

Some of the experts and stakeholders in the mining sector commended the decision of the House of Representatives for unanimously opposing the concession of Ajaokuta steel.

A bill to stop the Minister of Mines and Steel Development, Dr Kayode Fayemi, from initiating or concluding any concession plan on Ajaokuta steel, recently passed second reading in the House of Representatives.

The bill titled, “A Bill for an Act to Amend the Public Enterprises (Privatisation and Commercialisation) Act, Cap. P38, Laws of the Federation of Nigeria, 2004 to Review the List of Enterprises to be Privatised, and for Related Matters.”

The lawmakers also seek to establish a fund to complete the Ajaokuta Steel Company Limited.

A bill for an Act to establish the fund passed second reading at the House and 301 out of the 360 members of the House are in support of the two bills.

Speaker Yakubu Dogara said that it was a collective shame to all leaders that the project was yet to be completed after so many years,.

The speaker made the statement when he led members of the House Committee on Steel to Ajaokuta Steel in Kogi recently.

He said the House would consult with stakeholders to work out ways to source for the 500 million dollars needed to complete the last phase of the project, adding that raising the fund would not be a problem.

He said that there were many ways through which the money could be sourced, including from the Sovereign Wealth Fund, Excess Crude Account and recovered financial loots.

Prof. Benjamin Adewuyi, the past President, Nigerian Metallurgical Society, said that reconcessioning the plant at its infant stage would result to putting the future and security of Nigeria in the hands of foreigners.

Adewuyi commended Mr Speaker and the House of Representatives for speaking the minds of Nigerians, especially stakeholders in the sector that had long been canvassing that Nigerian government should revive and complete the steel plant.

“Our stand over the years is that government should invite the original erector, the builder of the plant, called TPE, a Russian company, to come and rehabilitate and complete the project both internally and externally.

“The TPE should complete the project, run the steel plant and carry out necessary test required; there are some perimeters needed in steel plant which must be put in place during testing.

“When all of these are completed including the dredging of Escavo, rail system from Ajaokuta to Onne, rehabilitation of the conveyor belt, cables among others, government can then decide if the plant should be concession or privatised.

“Nigeria has the money to rehabilitate and complete the steel plant, if there is right leadership, will-power and policy towards the project.

“What Nigeria is spending on importation of iron and steel is far more than what will get if the government should complete the steel plant,” he said.

He added that Ajaokuta steel has the capacity to produce ammunition, rail lines rod for building and construction, armored vehicles among others.

According to him, Ajaokuta is an integrated plant that should not be unbundled.

He warned that any attempt to unbundle the four rolling mills inside the steel complex could disintegrate the supply chain of goods when the steel plant becomes operational.

He said that if the rolling mills had been completed and functioning; they could produce rail tracks, iron rods for building, cables among others, if government could import billets needed for their productions.

Mr Attah Achimugu, Managing Director/CEO, REPROM Company Nigeria Limited, said that no investor would want to invest in the abandoned project like Ajaokuta steel with the current drop in steel market.

He said any investor that shows interest in reviving the plant would attach so many clauses to the agreement, adding that previous concession of the project to Global Infrastructure Holding Limited (GIHL) was an eye opener and lesson.

He said it would require patriotic zeal of Nigerians to revive the steel plant.

Mr Anthony Madagua, former, Managing Director/Chief Executive Officer, Delta Steel Company, Aladja, said that he would stand with a caveat on Dr Kayode Fayemi’s side to concession the steel plant.

NAN recalls that Fayemi had declared in March that Nigerian government would no longer spend a dime to put Ajaokuta steel to use but would concession it to a capable company with good history, competence and financial clout.

He said that almost eight billion dollars had been spent on Ajaokuta steel company from inception till date, saying that government would no longer put its resources on the project.

Madagua said that the concession should be structured on Win-Win situation for Nigeria, adding that it should not be like the previous ones signed with the GHIL that destroyed and incurred huge debt on the project.

“Ajaokuta is a special and strategic project that should not be toyed with; it is supposed to be the heartbeat of the nation, in terms of industrialisation.”

He said that Ajaokuta could be profitably operated to support the nation’s industrial development, boost employment and research development; saying that it could generate over 50,000 direct and 50,000 indirect employment.

He urged the government not to privatise the steel plant but concession it.

NAN reports that the foundation laying of Ajaokuta was conducted in 1980 by President Shehu Shagari and within four years the company recorded 84 per cent completion.

Ajaokuta steel company is located on 24,000 hectares of sprawling green-field landmass built on 800-hectares of land over three decade ago.

It is Nigeria’s leading steel company, and had intended to be the leading supplier of quality steel products in all the major economic sectors including construction, packaging, and wire drawing and nail making industry among others.

The steel company was concessioned to GHIL between 2004 and 2005 during President Olusegun Obasanjo administration.

However, the Indian firm did not live up to expectations as it could not manage the company.

Following the failure of GHIL to manage the company, the Federal Government under late President Umaru Yar’Adua was compelled to revoke the contract. (NAN)

 

Source News Express

Posted 16/04/2018 2:55:05 PM

 

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