Over $8bn Spent On Ajaokuta, Technical Audit To Determine Next Move - Fayemi



The final decision on the future of Ajaokuta Steel Complex will be determined by the outcome of a technical audit of the state of the company, the federal government has declared. Even then, it will no longer spend public funds in completing the project.

The House of Representatives had recently said $400 million will be required to complete the steel project which it claimed was 98 percent done, urging the federal government to source the money for its completion.

But Dr. Kayode Fayemi, Minister of Mines and Steel Development, said over $8 billion have been spent on the company since 1979 by the federal government “and we have not seen the result.”

“We have also said to them that we are not going to repeat the mistake of the Obasanjo administration. We will not undertake the re-concession without one, a technical audit; two, a transaction advisory service that will look into all these and advise us accordingly as to who really has the technical capacity, the financial wherewithal and the track record to really bring Ajaokuta back to life.

“However, the government took a principled position on one thing: that Nigeria will not spend one dollar on the so-called completion of the Ajaokuta steel plant. The reason for that is very simple; today from our record, we have spent close to $8bn since 1979 when this process started and we have not seen the result,” Fayemi said at a press conference on Thursday in Abuja.

The minister added that the government and the House of Representatives agreed on the concession of the plant and that the House approved the sum of N2 billion for the purpose in 2017.

The House had last week passed a vote of no confidence in Fayemi and the Minister of State for Mines and Steel Development, Alhaji Abubakar Bwari, following their failure to appear before it for sectoral debate on the steel plant.

The lawmakers also instructed the ministers to suspend every step towards the concession of the plant, adding that they preferred that the government should invest and complete the project.

Fayemi, however, said that the government had taken a decision not to spend any money on Ajaokuta since over $8bn had been sunk into the project by successive administrations since 1979.

According to him, the House agreed on the need to give out the plant as a concession by approving N2 billion for the process in the 2017 Appropriation Act.

He said, “We are just implementing what was passed by the National Assembly. That is why we are surprised that we have been subjected to an unwarranted attack over the matter in the last one week.

“Ajaokuta is an inherited challenge. The Obasanjo administration gave it out on concession; the President Umaru Yar’Adua government revoked it. And the case went to the London Court of Arbitration. Its resolution in 2016 led to the signing of the Modified NIOMCO Agreement, which ceded the complex back to the Federal Government and NIOMCO to Global Steel.

“No fewer than 14 parties have shown interest in running the complex, but government’s position is that we would not do any concession without a technical audit.

“PricewaterhouseCoopers was engaged to do a review of the company’s indebtedness and statutory liabilities as part of the settlement agreement.”