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This happened as an ad hoc committee of the House chaired by the Majority Leader, Mr. Femi Gbajabiamila, opened a public hearing on the troubled steel plant.
The House is against the Federal Government’s plan to give the plant to private investor as a concession and had a running battle with the former Minister of Solid Minerals, Dr. Kayode Fayemi, on the issue.
In March, the House speedily passed two bills in a bid to stop the concession, advising the government to instead complete the plant as a going public asset.
The two bills, sponsored by 301 lawmakers, were, ‘A Bill for an Act to Provide for the Ajaokuta Steel Company Completion Fund for the Speedy Completion of the Project; and for Related Matters’ and ‘A Bill for an Act to Amend the Public Enterprises (Privatisation and Commercialisation) Act, Cap. P38, Laws of the Federation of Nigeria, 2004 to Review the List of Enterprises to be Privatised; and for Related Matters’.
But, on Monday, Bwari appeared before the Gbajabiamila committee to defend the government’s decision to give out the plant as a concession.
He said that the government could not complete the plant because it could not afford the cost.
The minister stated, “With concession, the government will not put more money, but will appoint a reputable transaction adviser to move forward. Right now, the government does not have the funds. It is important that we hand it over to those who have the resources.
“The government is even borrowing to run services. That is to tell you that there is no money.”
Bwari added that it would cost the government far above the $500m being reported as the amount required to complete the plant and run it.
He explained that the reported 98 per cent completion frequently quoted had to do with the plant only and did not cover external and pending internal works to be done before production would start.
But, members disagreed with him, saying the problem of the steel firm was the lack of political will by successive governments to complete it.
Communities which own the land on which Ajaokuta Steel Company (ASCO) is built say the firm cannot take off unless their angry ancestor, egbunu akoko”, is pacified.
The community leaders of Geregu and Ajaokuta, the host communities in Kogi, expressed the view in interviews with News Agency of Nigeria (NAN).
The Chairman, Geregu Community Association, Alhaji Idris Aliyu, attributed the non-completion of ASCO project to mystical forces arising from the neglect of the communities.
Aliyu said the ancestors were not happy over the level of neglect of the communities by the Federal Government and the operators of ASCO.
“It is not the communities that are preventing the work from being completed, it is the ancestors.
“There is a lady that had a dream two years ago and said she saw one of our ancestors, “egbunu akoko’’.
“Egbunu akoko told her that if the government wants ASCO to be completed, they should go and resettle his people in Geregu and Ajaokuta .
“My advice is that, let them come back and fulfil most of the promises they made. They should fix our roads and repair the schools.
“Also, the Egbunu Akoko’s house they demolished should be rebuilt.
“Really, our ancestors are not happy over what is happening. The agreement we reached with ASCO when they acquired our lands since 1976 has not been implemented.
“All the promises they made they did not fulfil.
“As you were coming, you saw our road just about two kilometres from the steel plant to Geregu, you saw how rough it is and that is why you used motorbike to get to our palace.
“We have been neglected but we are praying that work should continue in the company, may be they will look into the promises they made to these two communities,” he said.
The community leaders also claimed that the government and administrators of ASCO reneged on the initial agreement of providing employment and development in the communities.
At the Palace of Etsu of Geregu, Mr Suleiman Idris, on behalf of Etsu Haruna Aminu, said the communities had been left to their fate after the takeover of their land.
He said Ajaokuta community had eight families and Geregu had five families who surrendered their land to the Federal Government for the building of the company.
The Etsu said that the government, upon taking over the land promised to compensate the people and provide them basic amenities but that had not happened.
“Since the construction of ASCO, we have been left behind, nothing has been done for the communities.
“You can see the palace of the Etsu compared to other palaces. It is in a deplorable state.
“No employment for our youths. Most of them are graduates and they are at home because they are not being given priority in terms of employment.
“Also, there are no infrastructure and social development provided by the company for the communities,” he said.
The monarch said part of the land from Ajaokuta was used for the construction of the industrial component of ASCO, while Geregu community provided land for the development of residences.
He said the development of residential houses and the industrial structures on the land had denied the people access to land for farming and other communal activities.
“When you check the environment, everywhere is occupied by private houses and no chance is given to us for our own communal use.
“The Federal Government promised to compensate us but nothing was done.
“Some years ago, the communities and the company went to court. At the end, the High Court in Lokoja said it did not have jurisdiction to hear the case and struck out the case.
“As you can see, there is no physical or social development provided for us by the company,” he said.
Onu of Ajaokuta, Alhaji Kassim Ibrahim, stressed the need for the Federal Government to give recognition to the communities by resettling them and providing them amenities as promised.
According to him, the communities have cooperated with the Federal Government by handing over their lands.
However, Mr Babajide Suru, the General Manager, Engineering Works and Services Department of the company, described the position of the communities as superstitious.
Suru said such belief held by the people was no longer tenable in a civilised world.
Meanwhile, the Sole Administrator of the company, Mr Sumaila Abdul-Akaba, said the issue of compensation and resettlement of the people would be addressed when the firm became fully functional.
NAN found that the access road to Ajaokuta community is in a deplorable state and the community lacks a modern health facility resulting in the people travelling more than five kilometres to Geregu for medical care.
The plant, conceived in 1976, was aimed at establishing a metallurgical process plant/engineering complex with other facilities.
It is on 24,000 hectares of land in Ajaokuta, 38km from Lokoja.
The company is meant to generate important upstream and downstream industrial and economic activities that are critical to the industrialisation of Nigeria.
The plant, tagged “Bedrock of Nigeria’s Industrialisation’’, is also designed to produce iron and liquid steel from mines at Itakpe, in Kogi, some 52km from Ajaokuta.
The project has achieved over 90 per cent completion.
Minister of Solid Minerals, Mines and Steel, Dr. Kayode Fayemi has explained that Ajaokuta Iron and Steel situated in Kogi State, North Central Nigeria, may not work anytime soon contrary to expectations of Nigerians.
He stated this during the joint budget defense of the Senate and House of Representatives on Power, Steel Development and Metallurgy in Abuja.
Fayemi who appeared with heads of Parastatals under his ministry noted that the current administration has made tremendous achievements in repositioning mines and Steel sector, but regretted that Ajaokuta was still bound by legal hiccups.
While answering questions on the specific time the Ajaokuta would work, he said: “Distinguished, I cannot answer this question with precision until the London Court of Arbitration has fully discharged the case out of court.”
The Minister also said the Federal government has sought out of court settlement between it and the concessionaire, saying it was been withdrawn gradually.
He regretted that for legal reasons, about 110 megawatts electricity which was capable of electrifying the entire Kogi State was unutilised.
Member of the Committee, Senator Sabi Abdullahi expressed discontent with the budget performance of the ministry for 2017, saying, the release of capital Budget was delayed.
The company’s Sole Administrator, Mr. Isah Onobere, made this known during a media tour of the company, last week.
Onobere said the first phase of the plant would also provide direct employment for 10,000 technical staff.
He also said the first phase had been completed, adding that it was envisaged to produce 1.3 million tonnes of liquid steel yearly.
Onobere said it would cost $400 million to complete Ajaokuta Steel, which had reached 98 per cent completion.
According to him, $2 billion is needed for infrastructure rehabilitation and operational cost.
Onobere said the government had begun to commit resources toward the maintenance and preservation of the plant’s equipment and facilities. He, therefore, called for improved efforts.
According to him, the government is considering various options on the way forward for the project’s completion, which includes outright sale, concession and joint venture.
He, however, denied rumours that the company’s equipment were obsolete, adding that the company can stand the test of time as all its equipment are functioning appropriately.
The Nigerian National Petroleum Corporation (NNPC), on Saturday disclosed that its Ajaokuta-Abuja-Kaduna-Kano gas pipeline project, often called the AKK Pipeline Project, would receive a funding boost worth $250 million from Chinese banks.
The corporation also explained that the gas line which would cost it $2.7 billion to execute had achieved a lot of milestones in its contracting process.
NNPC’s Group Managing Director, Dr. Maikanti Baru, stated these in a statement from the Group General Manager Public Affairs Division of the corporation, Mr. Ndu Ughamadu, in Abuja, though he did not disclose the identity of the Chinese banks that are willing to do this.
The statement however noted that Baru hosted a delegation of the Nigerian Gas Association (NGA) which was led by its President, Dada Thomas, when he made these disclosures.
Baru stated that the corporation got the funding window when it recently signed a $1.78 billion alternative financing agreements with International Oil Companies (IOCS) in London, for oil production, adding that the Chinese banks agreed to contribute $250 million towards the gas line projects.
He equally disclosed that the Chinese banks had made commitments to bring in as much money as might be needed to finance oil and gas investments in Nigeria.
According to him, the NNPC has opted to use the Public Private Partnership (PPP) financing framework to execute the gas line project, and that the corporation’s recent gradual exit from Joint Venture (JV) Cash Call regime would free up a lot of money for the project under this framework.
“We have gone far with the development of the project using the same paradigm shift of Public Private Partnership (PPP) financing. We have also gone far with the contracting process, part of which is to ensure that money meant for the project is raised from the private investors,” Baru, was quoted to have said in the statement.
He explained that the feat recorded in the project would bring to the fore, a new dimension in gas projects execution in the country, noting that it would equally signal a regime of private investors funding for such projects.
“On that occasion, I did challenge the Chinese banks that since they have now come on board, they should move from the back seat to the driver’s seat and they gave me their commitment that they have plans to bring in as much money as we need to execute our projects. And if the Chinese tell you that they are going do it, definitely they will do it and we will give them a run for their money,” he added.
He explained that the corporation would continue to support the federal government’s aspiration to increase Nigeria’s electricity generation to 10,000 megawatts (MW), with improved gas generation and distribution nationwide.
The recent debt settlement for arrears of JV cash call obligations by the corporation, he stated, would have great impact on the gas industry because the initiative was capable of freeing some dedicated funds that could be used to develop the sector.
“We have the aspiration of government to raise power generation to at least 10GW capacity, not just 10GW in terms of installed capacity, but one that will be steady in the grid by 2020. All these will drive our activities to ensure that the gas business is expanded and government’s aspiration to earn as much revenue from gas as oil will definitely be realised,” he stated.
Baru, said the current efforts to connect the eastern part of the country, where there are lots of gas reserves, with the west, where high consumption demand exists, showed that the NNPC is ready help the country’s power sector grow.
He said the NNPC would make inputs into the National Gas Policy recently adopted by the Federal Executive Council (FEC) as well as the fiscal bills on gas being worked out by the legislature, with the view to prioritising gas.
The statement equally noted that Thomas, in his remarks applauded Baru for the numerous initiatives he said NNPC has taken, and which had attracted NGA’s attention.
“We would like to congratulate the NNPC on a number of paradigm shifts, changes and initiatives it had brought to the fore in recent times. I am talking about the new alternative funding which you recently signed with Shell and Chevron to the tune of $1.78 billion; the clearing of $400 million debt in April; the progress being made on the ELPS – 2 loop lines and the OB3 gas project, one of the most critical gas pipelines in the country,” Thomas stated.
Ajaokuta Steel Company located in Ajaokuta, Kogi State about 38 km away from Lokoja, the state capital, was established 35 years ago. It was conceived and steadily developed with the vision of erecting a Metallurgical Process Plant Complex with other ancillaries and facilities. The plant was meant to generate important industrial and economic activities that are critical to diversification of the Nigerian economy.
Looking at the intentions behind the establishment, Ajaokuta Steel is therefore tagged the “The Bedrock of Nigeria’s Industrialisation.” But since 1994 when the Federal Government of Nigeria, owner of the plant, stopped funding the completion of the project, the plant has remained at 98 completion status. The rolling plan, for the third decade running, remains tailored towards the reactivation, completion and commissioning of the first of three phases of the project, of 1.3 million tonnes per annum of liquid steel production. The vision 2020:20 economic blueprint document even goes beyond the rolling plan to envisage the actualisation of the third phase of the project – 5.2million tonnes per annum of liquid steel production.
However, the project has had a chequered history occasioned by interplay of forces that have made the integrated commissioning of the Steel plant elusive till date.
According to the Sole Administrator of Ajaokuta Steel, Isah Joseph Onobere, an engineer, “there is so much misconception and misinformation about this project. This is born largely out of ignorance and some orchestrated campaign of calumny against the Nigerian state aimed at ensuring that we remain perpetually a dumping ground for steel products from developed countries.”
Onobere stated this during a 3-day Media Training workshop for Journalists and Reporters designed to cover Steel and Mining Sector, held in Lokoja, recently.
He said that the Ajaokuta Steel Plant (ASP) project is the development of an integrated iron and steel production and engineering works complex embarked upon by the Federal Government of Nigeria as a strategic industry, job creator and foreign exchange earner and with a foresight on industrialisation and diversification of the national economy.
The sole administrator said that among other expectations, the project “would provide materials for infrastructural development technology acquisition, human capacity building, income distribution, regional development and employment generation.”
He also disclosed that the project would directly employ about 10,000 technical staff at the first phase of commissioning; the upstream, downstream industries and service providers that would evolve all over the nation and would engage not less than 500, 000 employees when fully operational.
According to him, the present management of the company has been working round the clock to see how to put some of the completed facilities into use. “We currently produce spare parts machines and accessories in our captive shops for industries, organisations and individuals. We also have subsisting MoUs with private investors for the use of our facilities for educational training. The management has also taken action to salvage the Central Technical Archives to ensure the safety of millions of the Steel plant engineering drawings and documents there,” he said.
He also informed that the company, in respect of the above, has so far taken delivery of some important machines for the purpose of electronic storage and retrieval of technical drawing and documents.
This, according to him, is the realisation of over 20-year-old dream. The goal however, is to complete and commission the first phase of the project which is to produce 1.3million tonnes of liquid steel per year, and subsequently work for other stages of its development.
Onobere also disclosed that government has begun to commit resources towards the maintenance and preservation of the equipment and facilities of the plant, adding that this is pending the decision from the appropriate quarters regarding the completion, commissioning and continuous operation of the Steel plant. He further said that government is currently considering the report on various options on the way forward as advanced by a nominated Transaction Adviser concerning outright sale, concession or involvement of joint ventures.
He urged the journalists to always bring the issue of the project to the front burner in their reportage.
“The Nigerian steel sector qualifies for declaration of national state of emergency by government. Strategic industries like ours cannot be completely left to the vagaries of the private sector alone. This is because there are numerous socio-economic benefits that cannot be quantified in naira and kobo that will accrue from the full blown development of the Steel sector. As members of the fourth estate of the realm, we hope you will serve as the catalyst we seek and need to catapult Nigeria into the league of steel-producing nations,” the sole administrator said.
Akin Omotosho, an engineer, observed that the Russians gave Nigeria the best in Ajaokuta, lamenting, however that successive governments in the country have abandoned the project and left it to rot away, “while our graduates that are supposed to get employed in Ajaokuta are now roaming the streets in search of employment.”
Credits: Victoria Nnakiaike | BusinessDay