africa

Workers hopeful as FG moves to revive Ajaokuta Steel Company


The new agreement between the Federal Government and Russia for the completion of the Ajaokuta Steel Company by a Russian firm, MetProm Group, may be answered prayers to the workers, IHUOMA CHIEDOZIE reports

After gulping a total of about $6bn, Ajaokuta Steel Company Limited is still moribund, but the Federal Government is hoping that a fresh investment of $1.460bn will finally revamp the steel complex and make it productive.

The new investment is a result of an agreement between the Federal Government and Russia for the completion and operation of the company by a Russian firm, MetProm Group.

Going by the much that is known of the agreement, the Russian government and Afreximbank will provide the funds for the completion of Ajaokuta Steel Complex. The Russian government, through the Russian Export Centre, will provide $460m, while Afreximbank would come up with $1bn.

A Memorandum of Understanding for the agreement, which was brokered by Russian President, Vladimir Putin, and his Nigerian counterpart, the President, Major General Muhammadu Buhari, (retd.) is expected to be signed by the end of January 2020.

Should the fresh agreement work out, it would mark a successful end to a long, frustrating process which was initiated in 1979 by the administration of former President Shehu Shagari, with collaboration from the Russians, who were then part of the now defunct Soviet Union.

In 1967, experts from the Soviet Union recommended prospecting for iron ore in Nigeria, stating that the known deposits were of poor quality for steelmaking. Following the development iron ore of the required quality was discovered in Itakpe, Ajabanoko, and Oshokoshoko in 1973.

Subsequently, the Ajaokuta Steel Company Limited was incorporated in 1979, and the steel mill reached 98 per cent completion in 1994, by which time 40 of the 43 plants at the facility were already in place.

To supply the Ajaokuta Steel Mill with raw materials and connect it with the world market, a contract was awarded in 1987 for the construction of Nigeria’s first standard gauge railway, from the iron mines at Itakpe to the steel mill at Ajaokuta and continuing to the Atlantic Ocean along Warri.

See also  UPDATE: Abductors Of Enyimba Player, Friend Demand N20m Ransom

But the project was mismanaged and Ajaokuta Steel Mill is still unfinished more than four decades after construction began.

Along the line, the Federal Government engaged in several failed attempts to revive the steel complex through privatisation, including the botched concession arrangement with an Indian company, Global Steel Holdings Limited, which is still casting shadows over the future of the project.

The Federal Government has finally taken back full control of the steel complex, but, despite the cumulative investment of about $6bn over the years, Ajaokuta Steel Mill is yet to produce a single sheet of steel.

Minister of Mines and Steel Development, Olamilekan Adegbite, is optimistic that the steel complex would, at last, begin full production in 2022.

At a time Nigeria is grappling with challenges arising from poor revenue generation, the terms of the agreement with the Russians appears to be a favourable one.

Afreximbank and the Russian Export Centre will jointly fund the resuscitation of Ajaokuta Steel Company Limited and the funds that will be used to pay them back will come from proceeds made by the steel complex when it becomes operational.

The Russians will complete the construction of the steel complex, operate it for some years to recoup their investment, after which they will hand over ownership to Nigeria.

Adegbite stressed that Nigerian taxpayers’ money will not be involved in the entire resuscitation process.

“Afreximbank is bringing $1bn to the table and the Russian Export Centre is bringing $460m. It is a debt, not equity, and it is coming at the rate of five per cent.

“But it is not so much a debt to Nigeria because Mr. President has told us that he doesn’t want Nigerian money involved in it.

See also  COVID-19, oil blues and Nigeria's blue reality

“The business case built around Ajaokuta is such that it will pay back by itself. So, we are not going to use taxpayers’ money to pay that debt,” the minister said.

“We are looking at two and half years for Nigeria to begin to produce steel and this is a game changer for Nigeria. It will save us a lot in foreign exchange. Working at full operation, Ajaokuta will employ 10,000 engineers,” Adegbite added.

There is no doubt that, if the new plan succeeds, a fully functional Ajaokuta Steel Complex would be of immense benefit to Nigeria.

But many Nigerians, particularly those who have followed the ebbs and flows of the Ajaokuta story, would be hoping that the fresh undertaking does not go the way of previous unsuccessful attempts at revival of the steel complex.

However, the new deal on Ajaokuta might be facing threats that could spring up along the way, if care was not taken to address some outstanding issues.

In November 2019, the House of Representatives said it would probe the ‘government to government’ agreement signed between Nigeria and Russia for the completion of Ajaokuta.

The lawmakers’ grouse was that what they described as ‘lack of details on the deal’ and although Adegbite recently offered some insights into the agreement, not much has been disclosed.

There are also concerns that Global Steel Holdings Limited could launch a fresh legal battle with the Federal Government over the control of the steel complex.

Recall that Global Steel Holdings Limited, an Indian company, won the concession of the Ajaokuta steel mill for 10 years but the agreement was revoked when the Federal Government accused the firm of asset stripping, a development that led to a court case between the two parties.

To resolve the matter, the National Iron Ore Mining Company, Itakpe, was reportedly ceded to the GSHL for the remaining period of the concession in line with an agreement reached during mediation talks. But the Federal Government later backed out of the renegotiated concession agreement, thereby taking over both Ajaokuta Steel Company Limited and NIOMCO.

See also  NAF Jet destroys another bandits camp in Zamfara

Nigerians, particularly workers of Ajaokuta Steel Company Limited, whose hopes have been raised to the high heavens by the idea of the Russians returning to, at last, finish the job they started more than 40 years ago, would not want to be disappointed again.

And to forestall such a possibility, the beleaguered workers have resorted to praying for the resuscitation of the steel complex.

During a recent visit to the steel complex, some of the workers, who spoke with our correspondent, expressed concerns, and regrets, that they were about to retire from service without realising the hopes and expectations they had at the time they were employed.

A Chief Technical Officer, Sako Abdullahi, disclosed that the workers – both Christians and Muslims – organise daily prayer sessions, and fast, for the company’s fortunes to turn around.

He said, “We are not sleeping, we are praying and fasting, both Muslims and Christians, and we believe that God will surely answer the prayers. One day a God-sent angel will come and revive this place.

“That is our belief.”

“We organise prayers everyday. We pray in groups and also individually. On Sundays the Christians also pray in church, and Muslims pray in the mosques on Fridays. We also pray at our place of work here.

“We don’t know who God will send to answer our prayers but we are sure it will be answered,” Abdullahi added.

Hopefully, the answer will finally come in the form of the Federal Government’s fresh agreement with Russia.

Copyright PUNCH.

All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from PUNCH.

Contact: [email protected]





READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.  Learn more