Ajaokuta Steel Company: Senate sets to investigate circumstances in re-concession of NIOMCO

Sharon EboesomiFebruary 28, 20245 min

Natasha said the investigation should uncover the circumstances that led to the re-concession of NIOMCO, as the initial concession agreement was validly terminated by the Yar’adua administration.

Ajaokuta Steel Company: Senate sets to investigate circumstances in re-concession of NIOMCO.

The Senate has set up an Ad-hoc Committee to investigate the affairs of Ajaokuta Steel Company Limited and the National Iron Ore Mining Company (NIOMCO) in Kogi State between 2008 to date and to find out the circumstances that led to the re- concession of NIOMCO.

This is as it resolved to invite and interface with 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.

It also urged the Federal Government to review extant policies and laws on steel development in Nigeria with a view to adopting a strategic implementation Plan on Steel Development in Nigeria bearing in mind the importance of steel to Nigeria’s quests for industrialisation and economic self-reliance.

These resolutions followed the adoption of a motion stating the urgent need to investigate alleged incidents 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) during Tuesday’s plenary.

In her lead debate, Natasha expressed worry over the management structure at the Ajaokuta Steel complex referring to it as “abnormal”, adding that the sole Administrator has unilaterally decided upon the steel mill’s corporate affairs for the past 12 years.

Natasha also sought an investigation into the payment of $496m allegedly made to the Chairman, Global Infrastructure Holdings Ltd (GINL) by the Federal Government in September 2022 as settlement over ASL contractual disputes.

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According to her, Ajaokuta Steel and NIOMCO were set up by the Federal Government in the late 70s to establish Nigeria as a leading steel exporter but have been inoperative for decades due to a lack of political will and bureaucratic corruption.

Speaking further,  she explained that since 1994, when the Tyazhpromexport (TPE) exited the Ajaokuta Steel on alleged ground, Nigeria did not discharge fully its financial obligation to the TPE and the Ajaokuta Steel was reportedly at 98% completion yet remains inoperative to date.

She said, “After reviewing the Inuwa Magaji Administrative Panel of Inquiry Report on the late President Umaru Yar’adua, the Federal Executive Council 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 ANIOMCO 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 organized 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 organized crime. Additionally, GSHL’s management staff were jailed for economic crimes. However, it seems that Nigeria has fallen victim to Pramod’s sharp contract fraud yet again, in relation to the payout of $496m 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 positions.

“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 Tinubu has questioned the 33 billion naira electricity debt,” she said.

Sharon Eboesomi

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