Ajaokuta Steel: Senate probes $496m paid as settlement to contractor

The Senate has set up a committee to investigate the $496m paid by the Federal Government to the Chairman of Global Infrastructure Holdings Limited (GINL) in September 2022 as settlement for the contractual disputes on Ajaokuta Steel Company Limited (ASL).

The Senate also directed the committee to look into the affairs of Ajaokuta Steel and the National Iron Ore Mining Company (NIOMCO) from 2008 to date.

It resolved to summon relevant Ministries, Departments, and Agencies (MDAs) and other critical stakeholders in the steel sector, especially those with interest in Ajaokuta Steel Manufacturing Plant and NIOMCO “to obtain relevant information and submit a comprehensive report to the Senate regarding the affairs of the two plants between 2008 to date”.

The Senate asked the Federal Government to review extant policies and laws on steel development in the country.

These came following the adoption of a motion, titled: “Urgent need to investigate alleged incidences of corruption and inefficiency at the Ajaokuta Steel Company Limited and the National Iron Ore Mining Company (NIOMCO) located in Kogi State,” sponsored by Senator Natasha Akpoti-Uduaghan (PDP, Kogi Central).

She expressed optimism that the investigation would uncover the circumstances that led to the re-concession of NIOMCO.

The Kogi central senator said the initial concession agreement was validly terminated by the Umar Musa Yar’Adua administration.

According to her, the Federal Government set up Ajaokuta Steel and NIOMCO in the late 1970s to establish Nigeria as a leading steel exporter but have been inoperative for decades due to a lack of political will and bureaucratic corruption.

Akpoti-Uduaghan recalled that since 1994, when the Tyazhpromexport (TPE) exited the Ajaokuta Steel over allegation that Nigeria did not discharge fully its financial obligation to the agreement, the Ajaokuta Steel was reportedly at 98 per cent completion yet has remained inoperative.

The Kogi Central senator also said that sometime in 2001, Nigeria’s hope to have the Ajaokuta Steel Plant completed and put into operation was rekindled, following the signing of a bilateral agreement between Nigeria and the Russian Federation.

She said the hope was dashed, following the surreptitious concessions of NIOMCO and ASCL in June 2003 to “unqualified” Solgas Energy Limited, a company she described as lacking the financial and technical expertise to handle the project.

She said it was discovered that the company had never been in the ore and steel business.

Akpoti-Uduaghan said the concession of ASCL and NIOMCO complexes contradicted the recommendation of the House fo Representatives Committee on Steel in 2004.

She said, “After reviewing the Inuwa Magaji Administrative Panel of Enquiry Report on the late President Yar’Adua, the Federal Executive Council (FEC) unanimously terminated the concession agreement on April 2, 2008.

“The termination was due to the operations of ASCL, NIOMCO, and Delta Steel mills, as well as breach of agreement and unwholesome practices.

“Additionally, the concession agreement was found to be unpatriotically skewed in favour of GINL.

“The House of Representatives had conducted an investigation into the Iron and Steel sector in 2018 with far-reaching resolutions aimed at resuscitating the ASCL and NIOMCO steel mills.

“However, the Federal Government either ignored these resolutions or has not implemented them yet. Many steel-producing countries are disturbed by the $253 million organised economic crimes in India.

“Additionally, GSHL’s Pramod Mittal is notorious for engaging in questionable business activities, such as embezzlement and asset-stripping in countries like Bulgaria, the Philippines, Libya, Bosnia, Zimbabwe, Montenegro, Serbia, and many more.

“In Bosnia, Pramod Mittal, who is associated with GSHL, was arrested and charged with organised crime. Additionally, GSHL’s management workers were jailed for economic crimes.

“However, it seems that Nigeria has fallen victim to Mittal’s sharp contract fraud yet again, in relation to the payout of $496 million in 2022.

“This is not the first time, as Nigeria previously conceded NIOMCO to the same GINL in August 2016. Unfortunately, these fraudulent activities are facilitated by unpatriotic Nigerians who hold trusted government position.”

She also said, “It is disheartening to note that Nigeria is currently spending approximately $3.3 billion annually on importing steel, despite having abundant natural ore resources.

“This is because the Ajaokuta and Delta Steel plants, which could have served as valuable assets to the nation, are in a state of disrepair. These plants have become channels for the misappropriation of public funds, which is a huge burden on Nigerian taxpayers.

“I am concerned about the management structure at the Ajaokuta Steel Complex. It appears that a Sole Administrator has been making all decisions regarding the company’s affairs for the past 12 years without any input from others.

“This has led to increased inefficiencies at the company. Recently, President Bola Tinubu questioned the N33 billion electricity debt.”

Deputy Senate President Barau Jibrin gave the ad hoc committee four weeks to submit its report.