Ajaokuta Steel: Lawmakers acted on impulse, misinformation- Minister

Minister of Mines and Steel Development, Dr. Kayode Fayemi, has said that the debate by the House of Representatives on Ajaokuta Steel Company and subsequent resolution by the House to stop the planned concession of the Steel Company were prompted by impulse and misinformation rather than verifiable facts.

A statement signed by Olayinka Oyebode, Special Adviser to the Minister on Media and made available to The Daily Times on Thursday, stated that the intention and activities of both the Minister and the Minister of State in the Ministry, Abubakar Bawa Bwari, on the concession of Ajaokuta Steel Company were grossly misunderstood by members of the House which may have influenced their resolution.

Fayemi said, “In view of this and the need to set the record straight for the sake of the general public and the investing community, it is important to state that the Ministry of Mines and Steel Development has not contracted any transactional adviser for the concession of Ajaokuta Steel Company, as wrongly asserted by the House.”

He added that the process for the appointment of a Transactional Adviser is on, but cannot be completed until it gets the approval of the Federal Executive Council (FEC) while adding that the Ministry has not spent any money from the over N2billion which the House appropriated for the concession of Ajaokuta Steel Company in the 2017 Appropriation Law.

The statement reads in part, “The mediation process that led to the amicable settlement of the legal encumbrances on Ajaokuta Steel Complex has not ended. There are still a few more steps to be taken as outlined in the terms of (out of court) settlement. And the Ministry is following up on this.”

Fayemi further disclosed that the Ministry has not hired anybody or company as transactional adviser.

Although the Minister said he was convinced that the House members meant well for the country, he expressed worry that such an Honourable House could devote an entire day to an issue that has not even arisen and went ahead to pass a resolution on it.

“The Ministry remains committed to making Ajaokuta Steel Plant function effectively as it is convinced that steel remains the most important engineering material and backbone of industrialisation in any economy,” Fayemi added.

The Daily Times recalls that the House last year appropriated N2.96billion to the Ministry of Mines and Steel for the concession of Ajaokuta Steel Company.

The Ajaokuta Steel Company was in 1994 abandoned by a Russian company that constructed nearly 98% of its plant site. Ten year later in 2014, the Federal Government under President Olusegun Obasanjo approved a concession of the steel plant to Global Infrastructures Nigeria Limited also known as GINL, a company promoted by Primod Mittal, an Indian steel builder. The concession was however terminated by the late former President Umaru Musa Yar’Adua administration in 2008, leading to a legal dispute at the International Arbitration Court in London where GIHL demanded over N1 billion in damages.

While Nigeria said it terminated the concession agreement because GINL did not meet the target set for it in terms of volume of steel production and completion of the plant, the investor claimed that Nigeria did not fulfil its own obligations as spelt out in the agreement, a situation it said grossly affected its own abilities to meet the target.

Sensing that it was obviously losing the case and afraid of paying the huge damages claimed by GINL, the Federal Government under former President Goodluck Jonathan opted for an out of court settlement which led to a re-concession agreement that allowed GINL take over the National Iron Ore Mining Company (NIOMCO) located in Itakpe to operate for seven years in order to free Ajaokuta for Nigeria to manage.

But the Jonathan administration was not able to fully implement the re-concession agreement before its exit in 2015. After reviewing and modifying the terms of the re-concession agreement, the current government of President Muhammadu Buhari approved that its implementation execution was the best option for Nigeria, a position supported by this same Eight Assembly as evidenced by its appropriation of over N2billion in 2017 for its full implementation.