Stakeholders Urge Buhari to Stop Planned Sale of Steel, Oil and Gas Firms

The arbitrary sell off of government assets since the Second Republic has been a source of distress and poverty to millions of Nigerians who are retired from those companies without benefits. GBUBEMI GOD’S COVENANT SNR looks into the ongoing privatisation of steel rolling mills in the country and reports.

Stakeholders in the steel, oil and gas industries have called on the President-Elect, General Muhamadu Buhari (rtd) to cancel plans by the President Goodluck Jonathan-led administration to sell off the Delta Steel Company, Ajaokuta Steel Rolling Mill and the Pipeline Products Marketing Company, PPMC, among others.

A top member of the Delta Steel Stakeholders’ Forum and one of the leaders of the disengaged workers of the company in Aladja, Warri, Mr. Ovakpo Omajaro, said the fate of the steel company is no longer in the hands of politicians under the PDP- led government.

Speaking at a victory stakeholders’ meeting held to celebrate the victory of the APC, Omojaro told the forum that the incoming government must save the company and restore its place in the economic infrastructure of the nation.

He said: “You will remember that only about four weeks before the presidential election that ushered in the President-elect, General Muhamadu Buhari, we had heard a rumour that the Ministry of Mines and Steel Development was planning to sell off Aladja Steel Company to an automobile company.

“But when we protested the move, especially that all our salaries and severance benefits have not been addressed, the Minister of Mines and Steel Development, Muhammed Sada, had said that his ministry was not involved in the sale. Now, whether they are involved or not, we want the sale cancelled; Aladja Steel Company has a place in the economy of the country and all the families that have been displaced and scattered because of the closing of the company must be restored back.

“The new change and the coming of General Buhari is our life saver and we want him to wade into the matter from Day 1 of his coming to office on May 29th 2015.”

Amidst shouts of ‘We don win o, We don win!’, the forum matched round the company’s administrative block before delegation that will present their request to the new APC-led   Federal Government was set up.

Daily Times investigation revealed that though the proposed sale has been a long standing issue involving the Ministry of Mines and Steel Development and the Senate Committee on Mines and Power with stakeholders as the watchdog,

A reliable source at the office of the Minister of Mines and Steel Development, Abuja, denied any involvement of the ministry in the sale, but confirmed that it was working in close partnership with the Assets Management Company of Nigeria, AMCON, being the government agency handling the sale.

In a recent press brief, the Minister of Mines and Steel Development, Mohammed Sada, had said that the steel company had been in the hands of a private investor, but was retrieved by AMCON and is now set to sell it to another investor who is interested in the automobile industry.

He said: “Now AMCON is in the process of selling it and I am aware there are quite a number of people that have written letters of intent that they are interested. What interests us in the ministry is that those interested are people that are interested in automobile development.

“We have no role to play by the way, they are consulting us as experts in the industry and we have had several meetings with them to guide them.

“The last time I had a meeting with the MD of AMCON, he assured me that in the next couple of weeks, they are going to have somebody they are discussing with a view to selling it”.

Dismissing fears of future claims to the steel company by any other private investor, Sada said that all pending issues have been resolved.

Sada further explained that AMCON had given the initial company the opportunity to pay back the loan but the company was unable to do so and the grace period had long lapsed.

The minister said: “There were no previous claims. Delta steel was a privately owned company, the company took loans from the local banks, and by Nigerian Law, AMCON was put in place to make sure that banks do not fail.

“So, AMCON bought over the loans of that company, they gave them a payment schedule which they failed, so AMCON has no issue with anybody. Our concern is steel protection. Delta Steel Company still has the latest technology, whoever is buying the company can start working immediately.”

However, stakeholders fear that except the President-elect intervenes, the Ajaokuta Steel Rolling Mill is on the verge of being sold off by the outgoing PDP-led government. This was confirmed by Mr. Benjamin Dikki, the Director-General of the Bureau of Public Enterprises, BPE, who revealed that a new process to either privatise or concession the moribund Ajaokuta Rolling Mill would soon be undertaken by the Federal Government.

But Daily Times investigation revealed that the sale may not see the light of day as an ongoing litigation at the International Court of Arbitration is yet to be resolved. It was gathered that the suit, instituted by Global International Nigeria Limited, GINL, against the Federal Government was seeking redress for Federal Government’s unlawfully abrogating a sale agreement for the management of the Steel plant without due process.

Until the issues involved are resolved amicably, all the privitisation process would be put on hold.

Dikki disclosed that some terms of settlement being negotiated by the Attorney General of the Federation would be filed as judgment of the arbitrary court.

“The initial concessioning of the plant had been undertaken by government officials who concessioned the company without taking inventory of the assets; so when things became a bit difficult, BPE was approached to convert the concession into a Share-Sale-Agreement. That was how it was turned into purchase of shares.”

The BPE boss defended the Federal Government on the abrogation of sale procedures, arguing that 65 percent of privatised companies have been so far successful.

“The balance of the 35 percent has various reasons why they were not successful, including hostile operating environment as well as policies.”

On the dysfunctional refineries, Dikki said the Federal Government would develop a roadmap for what to do with the refineries this year, including the Pipeline Products Marketing Company, PPMC, and other subsidiaries in the Nigerian National Petroleum Corporation (NNPC).

Extending a hand of comradeship to stakeholders, Dikki said further: “What that means is that we would engage advisers, who would conduct a due diligence on the oil and gas sector with particular reference to the refineries, PPMC and the Nigerian gas company and from the information and collaboration with the labour unions, we will sit down and agree on a framework and the options that would be viable to handle those national assets.”

According to him, the outcome of the proposed engagement with stakeholders is expected to shape the direction on whether to concession, privatise or appoint a management consultant for the NNPC subsidiaries including refineries.

“Whatever options we have will be looked at and we would come to a definite decision as to what to do.

“It is after we have come to a resolution on what to do that we would now prescribe the necessary actions and a roadmap for those assets in the oil and gas sector,” he said.

Daily Times sought the views of Cryogenic engineer and former managing director of BOC Gases Nig. Plc, Engr. Festus Obinaike. In a chat with Daily Times,  Obinaike bemoaned the sorry state of the steel industry in Nigeria and said government, especially in Nigeria is not known to do good business.

He said: “The steel companies are not really working, they started with Aladja; then gave Ajaokuta to the Russians. Afterwards the Russians said they finished 95 percent of the work and came around to say the remaining five percent will cost what the 95 percent cost us; you know international politics came into the game.

“We need a vibrant steel industry and if we must tell the truth, government cannot run that effectively; may be when Buhari comes he would devise a way of doing it because our government has not been able to do anything good in that sector.

“We need honest people, but how are we going to find them and how many of them are available, anyway? In all the money we have spent on Ajaokuta and the others, it all entered into voice mail because of a government without accountability.

“So I am not opposed to privitisation, but you know the process will not be transparent, but again, we can only hope that when Buhari gets there, he can make the process to be transparent because government can’t do clean business, that is the truth.”

“Everywhere in the world, government encourages private participation, then creates enabling environment for them and enacts policies that will protect their production and marketing and all that are lacking in Nigeria.

“I don’t know if Buhari can do it all, but he might just be able to clean the system and that is a major step forward.”