Minister: OBJ Illegally Approved Ajaokuta Concession To Global Infrastructure

Source: THEWILL. -

* FG spends N3.6bn annually on salary

ABUJA, August 13, (THEWILL) - For the second time in 24 hours, former President Olusegun Obasanjo has been slammed for his role in the failures of the privatisation and commercialisation of public companies which began in 1999.

This time it was the Minister of Mines and Steel Development, Architect Mohammed Musa Sada who disclosed on Friday that the former President approved the concession of the Ajaokuta Steel Complex to Global infrastructure limited against due process.

The reference to Obasanjo came barely 24 hours after a similar revelation was made by a former Director-General of the Bureau of Public Enterprise (BPE) and former Minister of the Federal Capital Territory, Mallam Nasiru El-Rufai.

Also, Architect Sada in his testimonies before the Senate Ad-hoc Committee probing the Privatization and Commercialization activities of the Bureau of Public Enterprise (BPE) revealed that the federal government spends N300m monthly or N3.6 billion annually on salaries and wages of workers of the near comatose Steel Complex.

The Minister’s claim was corroborated by the Director General of the BPE, Ms Bolanle Onagoruwa who added that the approval of the concession of Ajaokuta by Obasanjo was in violation of the BPE Act.

Sada further told the committee that Global Infrastructure ruined the Ajaokuta complex by stripping it of all valuable equipment and machineries, leading to the cancellation of the entire process by the federal government.

“The concession of Ajaokuta steel goes back to 2003 when the first company Solgas was chosen. I agreed with the BPE because I saw it in the letter that the ministry was the sole organization for driving the concession agreement.

“It was actually an inter-ministerial committee of the then Ministry of Power and Steel, Finance and Justice and BPE, which participated as a member of the committee. One thing, I have no record of any minute of that meeting to show that these are the decision taken.

“A letter was then raised by the then Minister of Power and Steel to the President, requesting the President’s approval to cancel the concession to Solgas and start discussion and conclude with another company ISFAT, which is the mother company of Global Infrastructure. The President gave that approval.

“At a point in time, there was a share purchase agreement signed by the BPE. It was signed but never put into use, and I could not find any reason anywhere why it was not used. And the reason why the Ministry was driving that process as against the BPE is something I am not privy to.

“But all I know is that there seems to be a tripod agreement between the companies that showed interest, the Presidency and the Ministry. I think this is the tripod that seems to be moving, BPE is just following along when discussions are being done. In a nut shell this is the situation. But as of now that concession has already been terminated because of certain findings by government. A committee was set up which found out so many illegal things been done by Global holding running Ajaokuta. It was cancelled.

“I think the major problem that the NCP has is that despite the accusations of so many things this company did somehow, we sat back and they are the ones that went to arbitration. We thought having caught them with their hands in the till we should be the ones to take them there. But now they are the ones taking us to arbitration to the extent that now they now have some conditions given to us like options for us to be able to conclude, because when we came in, we were very interested to be sure that the legal issue is cleared because that is hampering so many things for us to do particularly the ministry.

“But with the inauguration of the last NCP by Mr. President we had our first meeting and at that meeting we affirmed that we are not going to follow any options. What we are going to do is to follow up on our rights because we have records on what they have done. So currently, there is an existing NCP committee looking at those legal issues and they have been asked to pursue our own rights as against looking at options given by the company. So I think Mr. Chairman this is where we are as far as Ajaokuta is concerned,” Sada said.

On the monthly salary to the workers, Sada noted that federal government pays N300 million per month to the workers in Ajaokuta while only N650 million is required to bring the company up to a production level where it can generate funds to sustain itself.

According to him, “We need a meager N650 million to fix the complex to a level where it will be raising money to pay the workers there, but government is spending N300 million per month on workers salary for doing nothing.”

Sada however lamented that the privatization has failed in the steel sector saying, “All I will want to say is that I want to concur with everybody that the privatization of the steel sector which I am very familiar with is in a sorry state. We have not been able to move forward. The sole purpose of privatization is to drive value, generate wealth, employment and be able to take the country forward.”

A member of the committee, Senator Ifeanyi Okowa described the payment of the N300 million to workers a moribund Ajaokuta as unfortunate.

According to him, “N300 million every month, that is quite huge. The implication of that is that we are spending a whopping N3.6 billion annually on salary when nothing is going on. But it is unfortunate; it shows that the company it was concession to was a major challenge.”