House Moves To Probe Privatisation Of Ajaokuta Steel


SAN FRANCISCO, April 30, (THEWILL) â€' Worried by the comatose state of the Ajaokuta Steel Rolling Mill (ASRM), the House of Representatives Wednesday directed its Committee Steel, Privatisation and Commercialisation and Justice to investigate the privatisation and concession of the company.

The House took the decision when it adopted a motion brought on the floor by Hon. Ben Nwankwo in which he lamented the colossal waste of national wealth on the gargantuan project.

While leading debate on the motion, the lawmaker recalled that the ASRM was conceived in the National Development Plan of 1975-1980 to be the largest integrated steel rolling mill in Africa and the metallurgical phoenix force of Nigeria's quest for technological advancement.

He said the company was inaugurated in 1983 at 95 percent completion state as it was thought that funds to be generated from the production of steel from the completed components of the integrated steel plant will fund the completion of the remaining five percent of the project.

Nwankwo noted that after the overthrow of the President Shehu Shagari administration in 1983, the Russian engineers engaged in the construction of the steel company left the country and the company fell into a 'decrepit state as a result of poor funding, inept management and neglect by successive military governments.'

He said he was surprised that the pendency of the arbitral proceedings further compounded the woes of ASRM thus preventing it from achieving the very lofty ambition of its founding fathers which include meeting the nation's steel needs, employment for Nigerians, earning foreign exchange from the export of steel and being the driving force of Nigeria's quest for technological advancement.

According to him, in 2005, ASRM together with the National Iron Ore Mining Company (NIOMC), Itakpe were given out in concession to two Indian firms: Global Infrastructure Holdings Limited and Global Steel Holdings Limited with detailed due diligence on the ability and competence of the concessionaires to effectively and, profitably manage the companies.

He further explained that the concessionaires allegedly administered the companies in ways contrary to the concession agreement, which included alleged unfair labour practices, assets stripping and other practices inimical to the proper functioning of the companies.

Nwankwo observed that 'owning to the complaints regarding the operation of ASRM and NIOMC by the concessionaries, the government of President Umaru Musa Yar'Adua revoked the concession agreement in 2007, leading to a protracted arbitral proceedings at the International Centre for Commercial Arbitration in London.

According to him, the recent disclosures indicate that the Federal Government has re-acquired the ASRM from Global Infrastructural Holding Limited 'in circumstances that are still hazy, while the fate of the NIOMC is still unclear.'

The lawmaker, who described the turn of events at the steel company as 'a national disaster,' disclosed that ' a sole administrator has been appointed to administer ASRM, while an Ukranian company has reportedly been appointed as its managers 'on terms that can best be described as unclear.'

He expressed concern that the failure of ASRM, despite the investment of an estimated $20 billion from inception to date has become a national embarrassment to the country.