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Obasanjo ignored our advice on Ajaokuta, says monitoring team

Posted by By JAMES OJO and SAMUEL OGIDAN, Abuja on 2008/06/19 | Views: 1849 |

Obasanjo ignored our advice on Ajaokuta, says monitoring team


The failure of the Obasanjo presidency, to act on the 12 reports prepared by the committee, set up to monitor the implementation of concession agreement on the troubled Ajaokuta Steel Company and National Iron Ore Mining Company (NIOMCO), was yesterday adduced as reasons why the companies collapsed.

The failure of the Obasanjo presidency, to act on the 12 reports prepared by the committee, set up to monitor the implementation of concession agreement on the troubled Ajaokuta Steel Company and National Iron Ore Mining Company (NIOMCO), was yesterday adduced as reasons why the companies collapsed.

Following the sack of SOLGAS Energy from the two companies due to non performance in 2004 and the concession of the management to Global Infrastructure Holdings Limited in 2005, the Federal Government named an 8-man monitoring committee, led by Chief P.U. Umunnakwe with a mandate to monitor the activities of the Indian company.

Umunnakwe told the House of Representatives public hearing, on the failed concession agreement leading to the sack of Global Infrastructure from the company, that had the government took action on the reports on the monitoring committee, the companies would not have gone under.

"The committee visited the companies regularly and sent their reports quarterly to the minister of Power and Steel for information and submission to the former President, Chief Olusegun Obasanjo. Indeed, we prepared 12 documents," he said.
Regrettably, he added that no action was taken, as "only the higher authority take decisions," adding that the situation in Ajaokuta and Itakpe would not have been what it is today if government had acted promptly.

According to him, when the monitoring committee moved into the companies, 138,000 metric tons of iron ore, costing $6.9 million were met on ground as at the time Global Infrastructure took over.
Surprisingly, government decided to sell the entire Ajaokuta Steel Complex at a paltry sum of $2 million.

With the ridiculous sale, he told the joint committee on Power and Steel and Privatization and Commercialization that Global Infrastructure was yet to finish paying the $2 million as at the time government decided to terminate the concession agreement early this year.
Umunnakwe informed the House that the committee discovered that there was a big drop in the activities in the companies between 2005 and 2007, when most items in Ajaokuta were moved to Delta Steel Company (DSC) in Aladja.

"It will later be seen that it was in 2007 that they moved the greatest quantity of items to DSC and also cannibalization of equipment and displayed unethical and unprofessional conducts by removing spare parts and not replacing them and also moving scraps to DSC," he stated.

On the way forward, he suggested that the original builders of the steel complex, TPE of Russia be carried along by the major core investor, as experience had shown that without the assistance and cooperation of the builder, it would be difficult to revive the company.
He told the committee that TPE still held on to some vital documents needed to revive some units of the plant that Global Infrastructure could not even operate.

Executive Secretary of Africa Iron Steel Association, Sanusi Mohammed, also told the House that the former president drove his team out when they went to advise on the danger in the sale agreement on the Ajaokuta company to Global Infrastructure.
Other key stakeholders like the Bureau of Public Enterprise (BPE), National Council on Privatization (NCP), minister of Power and Steel all stayed away from the House on account of the court action instituted by Global Infrastructure against the Federal Government over the termination of the concession agreement.
Making submission on behalf of the trade unions in the companies, President of Iron and Steel Senior Staff Association, Comrade Titus Orimijupa accused government of insincerity in revitalizing the steel sector of the economy.

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