9 March 2018

Nigeria: Govt Insists On Concessioning Ajaokuta Steel Company

The federal government has declared that it would go ahead with its concessioning plan for the Ajaokuta Steel Plant, saying it would no longer waste public funds on the project.

The minister of Solid Minerals Development, Dr. Kayode Fayemi, who disclosed this during an interactive session with newsmen in Abuja yesterday, said the federal government would leave no stone unturned in achieving the concessioning of the steel plant.

The minister also reacted to the vote of no confidence unanimously passed on him and his minister of state, Mr. Abubakar Bawa-Bwari, following their absence at a sectoral debate at plenary.

He explained that when he received the invitation, he informed the leadership of the House that he was involved in an economic recovery growth plan (ERGP) meeting and that the minister of state was in Canada, adding that they would appreciate another time to address the plenary.

Fayemi explained that the House of Representatives had the right to seek an explanation on any matter of public interest, adding that there was nothing fundamentally wrong for the House and its leadership to request the minsters' presence at the sectoral debate called last week.

He noted that the federal government had said it would not spend one dollar towards the completion of Ajaokuta Steel Plant and the reason was that till date, the nation had spent close to $8 billion since 1979 on the plant with no result to show for it.

He further explained that Speaker Yakubu Dogara had approached the ministry in order to pay a visit to Ajaokuta steel company, and that the minister of state had accompanied him on the trip on February 12, 2018.

The minister said when Dogara was at the plant with his entourage, he remarked that the steel plant was in a state of coma.

On the question of ownership of the plant, Fayemi said the central thrust of the mediation agreement was that the day to day running of Ajaokuta had been with the federal government since the revocation of the concession agreement.

"Some people will say Ajaokuta is 98 per cent completed, (or that) it is 90 per cent completed, but if you probe further, you will discover that you would not get any response from the campaigners," he said.

He told the House that, in the eyes of the law, Ajaokuta technically belongs to the concessioner until the agreement provided was met.

"As a country in the exchange, for the completion of the remaining period of the concession of the iron ore company, Itakpe, provided that when Ajaokuta is ready to operate and Global is in control of NIOCO, Ajaokuta has the first right of refusal of every iron from the company; that is the agreement we signed - that government will use its best endeavour to ensure that Global has the right to access Warri Port.

"The original concession by Obasanjo's administration are as follows: Ajaokuta was given to Global, NIOCO was given to Global, Delta Steel was given to Global and railway from Ajaokuta from Itakpe to Warri was on concession to Global; the Warri Port was given to Global, which has nothing to do with President Muhammadu Buhari's administration as it was done in 2004."

He further noted that during the era of former President Umaru Yar'Adua in 2007, there was clamour in the country to get the entire steel plant to just one integration; and responding to the stake of Nigerians, he revoked the concession without following due process - which heralded the problem.

"As a matter of fact, if he had allowed that (the concession had about six months left to elapse), we would not have been in this mess - as they headed to London Court of Arbitration and got an arbitration injunction that Nigeria cannot do anything until the matter in arbitration was resolved.

"So we could not open it for concession, re-concessioning or privatization. So, it was completely comatose for the entire period.

"Now we have reached the period when all issues are almost getting to an end.

"To get it right, we will get a technical audit, a transaction advisory service that will look into all this and know who really have the technical capacity, financial wherewithal to bring it back to life."

On the matter with the House of Representatives, he said: "When he (Speaker Dogara) was there with his entourage, he made remarks perfectly legitimate of somebody of his office about the comatose stage of that plant. Subsequently, we received a correspondence at the end of February intimating us of the sectoral debate of the Ajaokuta steel plant which the House of Reps will like to have and it is going to happen in the plenary, not a committee on steel development that invited us, and we responded to this request by informing the leadership that I was involved, as the lead minister, in an ERGP focus plan that will not allow me to be present and the minister of state was in Canada and we will appreciate another time to address the plenary on the Ajaokuta Steel plant interest shown.

"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 the minister of state and I 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 evidence; allegations that officials of the ministry have had their hands tied by the concessionaire is quite unfounded."


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