The fresh acquisition racket rocking Ajaokuta Steel Company Limited, (ASCL), has altered $1.2bn investment sourcing for the Turn Around Maintenance (TAM) of the plant.
The prospective lenders for the projection earlier made by sole administrator of the company, Sumaila Abdul-Akaba, investigation by New Telegraph showed, are standing aback following the petition by a lawyer, Natasha Akpoti, in which she alleged plots by some individuals in the ex-President Goodluck Jonathan’s administration and the current Muhammadu Buhari regime “to fraudulently acquire the steel company for themselves.”
Although the House of Representatives had set up a committee to probe the new allegation, it was seen, according to checks by this newspaper, as another major hiccups to the success of the ongoing rehabilitation and acquisition of the moribund steel plant.
The plant was designed to produce 1.3 million tonnes of liquid steel per annum in its phase one, with a built-in capacity to expand its production to 2.6 million tonnes of flat iron and steel products in its second phase and phase three plan was planned to produce 5.2 million tonnes of various types of steel products, including heavy plates.
“This not the first time that acquisition and or concession of the company had hit the rock,” an investor told this newspaper at the weekend after his anonymity was guaranteed. “Mark my words, as we speak,” he said, “ nothing will come out of this probe,” which he alleged “would end up thwarting efforts to get the backbone of Nigeria’s industrial growth back or on the track.”
“The sole administrator, Ajaokuta Steel Complex, Sumaila Abdul-Akaba, who revealed that $1.2 billion is required to turn around the moribund steel plant, gave breakdown of the amount to include: $513 million for rehabilitation, completion and commissioning, while $687 million will be used for balance of external infrastructure.”
He pointed out that Nigeria could save over $10 billion annually if the steel company was brought on stream, nothing that following the last technical audit of the steel plant in 2010, it was estimated that about $1.2 billion was required to achieve the total rehabilitation, completion and commissioning of the plant. The amount, he said, included balance of external infrastructure.
“But the question is which financier or lender will hear that the company is again in acquisition racket and stick his or neck to cough out $1.2 billion?” a source inquired. His misgivings were laced on the long history of concession and revocation of the asset.
In June 2003, former President Olusegun Obasanjo conceded Ajaokuta steel to Messrs SOLGAS ENERGY of USA on a 10-year tenure; in August 2004, the Federal Government terminated the SOLGAS Agreement due to non-performance. In 2004 and 2005, the Obasanjo administration, again, granted another concession to Global Infrastructure Nigeria Limited (GINL), an Indian company for the operation of Ajaokuta steel and the Nigeria Iron Ore Mining Company (NIOMCO) at Itakpe in Kogi State.
However, the Indian company did not live up to Federal Government’s expectation in managing the two companies. Consequently, the late Umaru Yar’Adua’s administration was compelled to revoke the contract in April 2008 without meeting the requirements of the clauses built into the agreement.
The Indian company thereafter took Nigerian government to arbitration court in London, which also crippled the two firms. In 2016, President Muhammadu Buhari fulfilled his campaign promise on Ajaokuta steel by settling the legal bottleneck surrounding the companies out of court. However, the Federal Government signed a modified concession agreement with GINL to enable the firm retain the National Iron Ore Mining Company, Itakpe.
The modified seven-year concession agreement was signed on August 1, 2016, while the Federal Government took over the Ajaokuta steel. Meanwhile, Leader of the House of Representatives, Mr. Femi Gbajabiamila, is heading a committee constituted by the House to investigate the controversial Ajaokuta Steel Company Limited, (ASCL).
The committee, which began sitting last week, was set up to look into the critical issues raised at the debate. Akpoti had revealed how a Russian company had to abandon the project in 1994 because Nigeria fell short of its contractual agreement by not releasing funds needed for the completion of the steel plant
She also claimed that Russian President, Vladimir Putin, wrote the Nigerian government on how to modernise and complete the Ajaokuta complex, but key Nigerian actors have been silent on the offer because of their personal interest in the steel company. She also recalled how Ajaokuta and Itakpe Iron Ore Company were concessioned to a private company, Global Infrastructure Holding Limited, which later metamorphosed to Global Infrastructure Nigeria Limited, (GINL).
According to her, GINL had, at several times, contributed to the decay of the steel company, which is why the steel company remains moribund.
Akpoti also explained how the late Yar’Adua terminated the concession of Ajaokuta and Itakpe steel company to GINL after a committee was set up to probe the concessioning process and the state of Ajaokuta Steel in 2008.
She also claimed there were several indications that the current Minister of Solid Minerals and Steel Development, Kayode Fayemi and Governor of Kogi State, Yahaya Bello, had interest in the steel company.
The Ajaokuta Steel Company in Kogi State of Nigeria was envisaged to serve as the bedrock of Nigeria’s industrialisation. The idea of having a steel industry was conceived in 1958 by the Federal Government.
Preliminary market studies were carried out and studies were initially directed towards the feasibility of establishing rolling mills.
However, because of the growing awareness of the availability of iron ore in Agbaja, Udi and other areas of the country, emphasis later shifted to establishing an integrated steel plant.
Credit: New Telegraph
