By Ese Ekama
In 2015, former Minister of Solid Minerals Kayode Fayemi paid a day official visit to Ajaokuta Steel Company Ltd. to take a holistic view of the company and ensure it worked for the development of Nigeria’s industrial sector.
According to him, President Muhammadu Buhari is very passionate about the completion and effective operation of the company which is located in Ajaokuta, about 38 kilometres from Lokoja.
“We are looking at the entire steel complex and we are not going to segment the plant.
“We are told that the captive power plant has been reactivated; after taking the one needed by the company, we will be happy if Kogi and its environs could benefit from the remaining megawatt,’’ he said.
In the light of this commitment by the present administration, concerned Nigerians note that Ajaokuta Steel Company was envisaged to serve as the bedrock of the nation’s industrialisation and it ought to have been performing the role effectively.
Established in 1979 during former President Shehu Shagari’s administration, the company occupies 24,000 hectares of land.
The company has the billet mill which produces billets, the light section mill that produces round, square, strip and angles metals, the wire rod mill, producing wire rods and bars and the medium section and structural mill to produce parallel flange channels, equal angles, unequal angles and standard channels.
Between 1980 and 1983, the plant had reached a significant level in infrastructural development as the light section mill was commissioned earlier than the scheduled date, while the wire rod mill was also commissioned in April 1984 instead of December 1984.
By 1994, equipment erection work at the company had reached a substantial percentage of completion and the public had expected it to roll out steel for the much expected industrial development of the country.
Observers, however, note that even with the level of its completion, Ajaokuta Steel Company has yet to contribute to the development by having multiplier effects on all sectors of the Nigerian economy.
They hold the belief that the company has the capacity to become a major producer of industrial machineries, auto-electrical spare-parts producer, shipbuilding, railways and carriages.
Besides, they draw the attention of the stakeholders to the effect that the steel plant’s first phase has the capacity to provide direct employment for 10,000 technical staff and indirect 500,000 for unskilled upstream and downstream employment if it is in operation.
According to them, South Korea, which started its steel construction around the same time with Ajaokuta Steel Company presently has a revenue base of more than N60 billion dollars per annum and employs more than 65,000 workers.
They also observe that Ajaokuta Steel Company would have done better than South Korea if it has started production.
They recall that the Federal Government has spent more than 10 billion dollars within 34 years and it will only require additional two billion dollars to complete the plant.
In a bid to make the company productive, former President Olusegun Obasanjo conceded it to Messrs Solgas Energy, U.S. on 10-year tenure in 2003 but the same administration, alleging Solgas of non-performance, terminated the concession agreement in August 2004.
Further to this, in 2004 and 2005, the government granted another concession of the steel company and National Iron Ore Mining Company, Itakpe, Kogi, to Global Infrastructure Nigeria Ltd. of India.
But former President Umaru Yar’Adua revoked the contract in April 2008 resulting in legal action between the government and the Indian company.
In 2016, President Muhammadu Buhari settled the legal bottleneck surrounding the companies out of court with a modified concession agreement enabling Global Infrastructure Nigeria Ltd. to retain the National Iron Ore Mining Company.
The modified seven-year concession agreement was signed on Aug. 1, 2016, while the Federal Government took over the Ajaokuta Steel Company Ltd.
Stakeholders in the Nigerian Metallurgical Society have, therefore, expressed concern about the news that the Federal Government was considering the concession of the company, pleading with the government to complete the remaining two per cent and operate the plant for few years before concession.
They want the government to provide clear and articulated plan for the development and growth of metal production sector as the struggle for a functional steel company in Nigeria for industrial development.
The Sole Administrator of Ajaokuta Steel Company Ltd., Sumaila Abdul-Akaba, pleaded with the Federal Government to complete the construction and equipping of the company before putting it up for re-concession to raise its value.
He said that a technical audit committee had been constituted by the Federal Government to ascertain the real cost of completing the plant.
“We are not against the concession of the company but there is the need to complete the plant as this will place high value on it,” he said.
Irrespective of Mr Akaba’s view, some stakeholders insist that any attempt by the government to re-concession the steel plant will lead to corruption and mortgaging security of the country.
But former Minister of Solid Minerals Kayode Fayemi said that government would not incur further expenses to put the plant to use.
He said that the government would rather consider concession to a capable company with good history of competence and financial buoyancy.
“After completion of the audit, the ministry will declare it open for concession and only a competent bidder will be allowed to operate the company.
“The position of the government is clear on Ajaokuta; only a company that is verifiable, competent and financially buoyant will get the concession on Ajaokuta after the technical audit is completed.
“The rumour going on that Ajaokuta is at 90 per cent or 98 per cent completed is not true; that is why the technical audit is going on to ascertain its level of completion and other information needed,’’ he said.
However, following the former minister’s declaration, the House of Representatives came up with a bill to stop the government from initiating or concluding any concession plan on the steel plant.
Speaker of the House Yakubu Dogara said recently that the National Assembly would resist any move to concession the plant.
“You cannot concede your future; it is never done. I am yet to see a nation that even conceded its bedrock and still succeeded. If you see one, just tell me; and that’s why previous attempts to concede it were not possible,” he said.
Sharing similar sentiments, Prof. Benjamin Adewuyi, former President, Nigerian Metallurgical Society, said that the concession of the plant would result in putting the future and security of Nigeria in the hands of foreigners.
He commended Mr Dogara for speaking the minds of Nigerians; especially stakeholders in the sector that had long been canvassing that Nigerian government should revive and complete the steel plant.
“What Nigeria is spending on importation of iron and steel is far more than what will get if the government should complete the steel plant,’’ he said.
But Anthony Madagua, former, Managing Director of Delta Steel Company, Aladja, said that he would stand with a caution on Kayode Fayemi’s view on concession of the steel plant.
He said that the concession should be structured on a win-win situation for Nigeria, adding that it should not be like the previous concessions.
“Ajaokuta is a special and strategic project that should not be toyed with; it is supposed to be the heart beat of the nation in terms of industrialization,’’ he cautioned.
In his view, Abubakar Bwari, Minister of State in the Ministry of Mines and Steel Development, said 652 million dollars would reactivate equipment and machines at the Ajaokuta Steel Company Ltd.
According to him, the estimated amount is part of recommendations contained in the Technical Audit Report presented to him.
Mr Bwari said that with the completion of work by the Technical Audit, the next line of action was for the ministry to appoint transaction advisers to advise the Federal Government on the best strategy to adopt in operating the steel plant.
Irrespective of any decision on the company, concerned Nigerians note since a viable steel industry such as Ajaokuta steel Company Ltd. will continue to serve as a stimulus to national development, stakeholders should agree on profitable methods of sustaining the company.