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WHY AJAOKUTA STEEL PLANT SHOULD START OPERATION

By NBF News
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It is stating the obvious to say that the history of industrialized nations of the world is the history of steel development. Consequently, any nation that overlooks steel development does so at her own industrialization peril. Such a country will be made a consumer nation and a dumping ground for developed economies of the world. This realization by our policy makers prompted them to develop indigenous steel industry. Hence, the birth of Ajaokuta Steel Company Limited (ASCL).

Going down memory lane, we recall that the global contract for the execution of Ajaokuta Steel plant was signed between the Federal Government of Nigeria and Messrs Tyajzhpromexport (TPE) of the defunct USSR on July 13, 1979. As an integrated steel project, ASCL was designed to produce cast steel using the blast furnace technology. The raw materials it requires are iron ore, coking coal, limestone, scraps, bauxite, dolomite, refractory clay and manganese. There are three rolling mills within the plant designed to produce saleable billets, beams, channels, angles, broad flanges, rounds, hexagonal, strips, wire rods and reinforcement rods. It is worthy of note that the production of flat steel was incorporated into the second stage.

The expected by-products of ASCL are dehydrated tar, ammonium sulphate, fertilizer, benzene, toluene, xyelene, naphtha, etc. In addition to the main products and by-products; the steel complex has a captive Thermal Power Plant (TPP), which has the capacity of producing 100mw of electric power. ASCL also boasts of an engineering complex, comprising of eight (8) shops, namely, Foundry and Pattern Making, Forge and Fabrication, Machine and Tools, Power Equipment Repairs, Rubberizing, Lubricant Reclamation, Electroplating, and an Express Laboratory.

Sadly, the Ajaokuta Steel Project, which was originally scheduled for completion in 1986, is yet to be fully completed. While some units had been completed on schedule, the entire plant could not be completed as envisaged. A combination of factors including funding constraints which caused delays in the execution of civil works was responsible for the inability to meet the 1986 completion date. Since then, the story of ASCL had been that of one step forward and two steps backward as successive Nigerian governments had not demonstrated the political will to complete the project, which was said to be 98% technically completed.

In an effort to find solution to the impasse, government entered into several agreements with different companies at different times to no avail. These agreements ranged from protocol, joint venture, concession to outright privatization.

Until this year, salaries payment had not been regular. This is because it was this year that ASCL was restored into appropriation. Even then, the 5 months salary arrears for 2009 are yet to be paid.

Experts posit that had ASCL been completed as originally scheduled, Nigerian industries would have by now been approaching a good level of capacity utilization, sustaining viable steel dependent industries, creating jobs for citizens, while enthroning a culture of technology acquisition and development. It has been empirically proved that outputs (products and by-products) of a major integrated steel complex like ASCL can be used as inputs of the various techno-economically viable units to usher in the much-needed industrialization.

There abound a lot of potentials for a number of downstream and spin-off industrial units that can use ASCL products and by-products. On the other hand, many of the inputs needed by ASCL can also be manufactured by small-scale and medium-scale industries. Even without being fully completed, ASCL had produced steel rods and even exported some steel products. It is on record that the steel plant's engineering complex had handled jobs for NEPA and NNPC just to mention a few of its teeming customers.

Comrade Abdulkareem Jimoh, the Chairman of Iron and Steel Senior Staff Association of Nigeria (ISSSAN), ASCL chapter believes that ASCL has a strategic role to play in the industrialization of the nation and the attainment of vision 20-20-20. He, therefore, urged the Federal Government to implement the resolutions contained in the communiqué of a steel summit held by stakeholders in Lagos sometimes ago.

At the summit, the Federal Government was advised to invite the original contractor that designed ASCL, that is, Messrs TPE, to first take a technical audit of the plant and complete it. Government was also enjoined to put in place, infrastructural facilities such as railway lines, dredging of the River Niger, etc. in order to make ASCL function effectively, efficiently and profitably.

The steel summit equally recommended that government should operate ASCL when completed for at least 24 months before considering public-private- partnership (PPP) for the operation of the steel plant.

Happily, government has started implementing some of the recommendations of the steel summit such as the technical audit which has been successfully completed, the on-going dredging of River Niger as well as the completion of the Itakpe - Ajaokuta - Warri railway line.

Comrade Abdulkareem Jomoh pleaded with the Federal Government to implement the remaining aspects of the communiqué of the steel summit. Workers are clamoring for work particularly now that they are enjoying improved salaries. The Interim Management Committee (IMC) which was appointed to oversee Ajaokuta Steel Project and National Iron Ores Mining Co. (NIOMCO), Itakpe should be given the opportunity to kick - start the completed units of the two companies.

The IMC members were appointed from the six Geo-political zones of the country. It is instructive to note that these IMC members are reputable engineers, administrators and technocrats and that the staff have trust in their ability to realize the dream of ASCL/NIOMCO. Worthy of note is the fact that the Management Committee has been able to put in place serious disciplinary measures to curb excesses of some staff, thereby, maintaining industrial peace and harmony within Ajaokuta Steel Complex and NIOMCO, Itakpe.

The advantage of operating the completed units, according to Comrade Abdulkareem Jimoh, is that those units will stop further deterioration and can as well generate income to a large extent, especially the thermal power plant, the rolling mills and the mechanical repair shops. He went further to explain that reduction of staff by about 40% still being contemplated by the parent ministry is not the solution, because it will create serious unemployment which is against the Federal Government policy decisions to create jobs.

It will also result in loss of experienced and well-trained manpower to the two companies. Comrade Abdulkareem Jimoh also explained that most of the engineers and technicians were trained in Russia and India, and with their expertise, they are expected to transfer their technological knowledge to the newly engaged staff.

Government should muster the political will to complete and operate ASCL because without steel, vision 20-20-20 would be a mirage.

Obaka writes from Ajaokuta.