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Hope Rises For Ajaokuta Steel Complex

There May Be Hope For The Completion Of Ajaokuta Steel Complex As Federal Government Considers Offer By Original Builders To Return And Comlete The Project.

Tony Ailemen, Abuja

After over 40 years of neglect, there appears to be a ray of hope for Ajaokuta Steel Company, Nigeria’s largest Steel complex, following decision by the Russia firm, Tyazhpromexport, which originally constructed the complex, to return and resuscitate the project.
This is just as the Minister of Solid Minerals Development, Dr. Kayode Fayemi has vowed to end all issues holding down the Ajaokuta Steel Company before the end of 2016
The UNION gathered that though government is yet to take a categorical position on the return of the Russian company, odds may favour them.
The Russian firm had in a letter dated December 25, 2015 and addressed to the Solid Minerals Minister, indicated interest to return and complete the project if the Federal government was seriously disposed to achieving target of the complex.
The Minister, who declared that all the issues preventing the company from being resuscitated are being taken holistically, however, noted that some legal issues surrounding privatization entered into by the previous governments may be hard to tackle.
Dr. Fayemi who spoke through his Special Adviser on Media, Mr. YinkaOyebode blamed what he called “legal logjam” as well as other issues surrounding the privatization process for some of the difficulties being encountered in the process to reviving the moribund steel complex.
“As you may well know, some people are now laying claims to owning the Ajaokuta Steel Company. But we are working hard and before the end of 2016, all issues which are now being considered holistically will be resolved”, Fayemi said.
Corruption, elite conspiracy and international power play aided and by Nigerian politicians class had brought the national edifice into a comatose state, after the project had reached closed to 98 percent completion, about four decades ago.
Ajaokuta Steel Company (ASC), worth an estimated cost of $7 billion, was envisioned to be the largest integrated steel company in West Africa.
But the company, which also was to create close to 2.5 million jobs for Nigerians, is now in a sorry state.
The UNION investigations show that the Russian group, known as “TYAZHPROMEXPORT” had on the 25th of December, 2015 written to the Minister of Solid Minerals Development, Dr. Kayode Fayemi, on its intention to key into the current government efforts to find a lasting solution towards reviving the project, after several years of abandonment.
In the said letter, the Russian firm wrote:
“Our Association keeps keen interest and wholeheartedly willing to complete the project that Russian government started with great goodwill and intentions for Nigeria. That it would mean a whole lot for TPE to grace the Honour of commissioning ASCL as a dream for both countries”.
It will be recalled that the organization had negotiated, signed and executed the construction of Ajaokuta Steel, on July 13th, 1979 under the administration of former President Alhaji Shehu Shagari.
The Russian group while tracing the history of the project, noted that “in conformity with the agreement signed on June 4, 1976, between the government of the USSR and Nigeria, about the economic and technical cooperation on July 13, 1979, our association and Nigerian agency on the development of ferrous metallurgy concluded contract no.44-047/04100 for the construction of steel plant with the capacity of 1.3 min. tons of steel per year with production of rolled assortment”.
It said that “by the end of 1993, practically all the construction activities were finalized. As of October 1,1993, technical plant availability was 98%, 476 units out of 482 were commissioned including three rolling mills. TPP- TBS repairs and service shops that were put into operation”.
However, the firm alleged that with the disintegration of the Soviet Union, the West, led by United States of America and Britain, through International Monetary Fund (IMF) and the World Bank, increased their opposition to the project.
“First, Nigeria’s government proceeded to concession the plant to an American firm, Global Infrastructure Holdings Limited, in 2005 and when this collapsed, Ajaokuta Steel complex was handed over to the Indian firm of GIHL, an arrangement that also collapsed”.
The UNION gathered that as a result of the cancellation of the agreement with GIHL, the firm took the government to a London Court of Arbitration which has been partly responsible for the current state of the ASCL.
A source close to the Solid Mineral Ministry told The UNION that in 2014, it was estimated that $1.1 Billion will be required to fully resuscitate the edifice, while the project can be fully revived within a period of three years.
“You will recall that the challenges facing the Ajaokuta Steel Company did not start with this administration, lack of political will and mismanagement by the past administrations has brought us to where we are now.
“Under former President Olusegun Obasanjo’s regime, the company was concession to Messrs SOLGAS of the United States of America and was later handed over to an India company, called Global Infrastructure Holding Limited (GIHL) to run two of the rolling mills, because of the failure of the American company to turn it around, until it was completely grounded to the state it is now”, The UNION was told.
It was also learnt that the company was vandalized, allegedly, by successive investors in active connivance with their Nigerian counterparts.
There were allegations, which The UNION could not independently verify, that the Indian firm, GIHL took away vital machinery and equipment from the Ajaokuta complex and allegedly moved same to another steel company in Nigeria.
The UNION also gathered that several option are being placed on the table, including an out of court settlement, which would enable the federal government to move in.

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