FG Rules Out Investment On Ajaokuta Steel Company

By Ikenga Chronicles March 9, 2018

FG Rules Out Investment On Ajaokuta Steel Company

Effort by the National Assembly to have the Federal Government fund the completion of the Ajaokuta Steel Complex in Kogi seems to have met a brick wall.

The Minister of Mines and Steel Development, Dr. Kayode Fayemi, at a press conference in Abuja, said the present administration would not spend any money to complete the steel plant after much has been wasted by the administration of former President Olusegun Obasanjo.

Fayemi stated that the Federal Government had sunk over $8bn into the project since 1979 without any result.

The minister affirmed that no fewer than 14 organisations from different countries had since 2016 indicated interest in the Ajaokuta Steel Complex, and gave conditions for concession as demanded by the lawmakers.

He said, “We have also said to them that we are not going to repeat the mistake of the Obasanjo administration. We will not undertake the re-concession without one, a technical audit; two, a transaction advisory service that will look into all these and advise us accordingly as to who really has the technical capacity, the financial wherewithal and the track record to really bring Ajaokuta back to life.

“However, the government took a principled position on one thing: that Nigeria will not spend one dollar on the so-called completion of the Ajaokuta steel plant. The reason for that is very simple; today from our record, we have spent close to $8bn since 1979 when this process started and we have not seen the result.”

The House had last week passed a vote of no confidence on Fayemi and the Minister of State for Mines and Steel Development, Alhaji Abubakar Bwari, following their failure to appear before it for sectoral debate on the steel plant.

The lawmakers also instructed the ministers to suspend every step towards the concession of the plant, adding that they preferred that the government should invest and complete the project.

Fayemi, in his response said the House agreed on the need to give out the plant as a concession by approving N2bn for the process in the 2017 Appropriation Act.

“We are just implementing what was passed by the National Assembly. That is why we are surprised that we have been subjected to an unwarranted attack over the matter in the last one week.

“Ajaokuta is an inherited challenge. The Chief Olusegun Obasanjo administration gave it out on concession; the President Umaru Yar’ Adua government revoked it. And the case went to the London Court of Arbitration. Its resolution in 2016 led to the signing of the Modified NIOMCO Agreement, which ceded the complex back to the Federal Government and NIOMCO to Global Steel.

“No fewer than 14 parties have shown interest in running the complex, but government’s position is that we would not do any concession without a technical audit.

“PricewaterhouseCoopers was engaged to do a review of the company’s indebtedness and statutory liabilities as part of the settlement agreement.”

The minister added that, “The National Assembly appropriated N2,096,500,000 for Ajaokuta concession in the 2017 Appropriation Act duly passed into law. We are just commencing what was passed into law by the National Assembly.

“This is why I am surprised at how we have been subjected to vitriolic attacks in the last one week. The March 1 sectoral debate, which we could not attend, was the first and only one I and the Minister of State were unable to attend and we duly communicated this to the leadership of the House.

“We take exception to allegations that are not backed up by evidences. Allegations that officials of the ministry have had their hands tied by the concessionaire are quite unfounded.

“The Russian government has not indicated interest in Ajaokuta. Yes, we have had offers from companies from Ukraine, Russia , Belarus and even Nigeria.

“Yes, I have met with the Russian Ambassador the same way I have met with the Ukrainian Ambassador and many other ambassadors. The Russian Ambassador told me they can offer technical, management and audit support, but not as a country bringing in money to take over the complex.

“Many are saying Ajaokuta is 98 percent completed. The ministry believes that can only be determined by the outcome of the technical audit, which should be ready in about six weeks.”

Fayemi reiterated that the President Muhammadu Buhari administration was being painstaking with the Ajaokuta Steel Complex , given the fact that it had been a victim of bad planning and poor execution by past administrations.