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Ajaokuta Steel Company remains white elephant project 30 years after

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Ajaokuta Steel Company
Ajaokuta Steel Company

By ADEBAYO OBAJEMU

Nigeria’s major steel producing company sited at Ajaokuta, Kogi State, North Central, after 30 years of its establishment, has remained an unprofitable investment not only to the government ,but Nigerians in general have derived no gain from it.

This white elephant project has gulped billions of naira sunk into it by successive governments since the Second Republic, yet the fortune of the company has not changed for the better.
Analysts who spoke with Business Hallmark said a complex of factors ranging from  political and ethnic – are responsible for the inability of the company to take off the ground. Phillips Atanmuo, who was once its general manager told this newspaper that ” Ajaokuta steel complex was originally proposed to be sited in Onitsha, Anambra State,but due to ethnic sentiment and political motive ,it was moved to Ajaokuta. ”
Atanmuo gave an insight into the blight that has become the steel production as he witnessed in Aladja ,Delta State and Ajaokuta.” In 1981, I joined Aladja Steel Company as Acting general manager, but along the line, I discovered that tribal sentiment from government functionaries was weighing down the complex.In Alaska, somebody was supplying us certain quantity of raw materials at a cheaper rate of N600 per ton and after using the material to produce a certain quantity of iron rod,we would sell it at N1,100. But at a stage, some government officials went and negotiate with someone to be supplying the same quantity at a cost of N1,000. I kicked against it but I was a lone voice in the wilderness, and eventually, the government officials dropped the contractor who supplied us the material at N600 and handed it over to the one who supplied at N1,000. It was then I expressed my disappointment with such a decision, and they decided to redeploy me to Ajaokuta.”

“At Ajaokuta, and precisely in 1992, during the administration of General Ibrahim Babangida, a delegation of senior staff visited Aso Rock in desperate move to revamp Ajaokuta complex.The effort was rewarded as N500 million cheque was given by the government as against one billion we canvassed, with Babangida promising to pay the balance later.

Atanmuo further said, ” To my greatest surprise, the moment I called a meeting and showed the government officials the cheque from Babangida,they collected the cheque from me , retired me instantly and replaced me with someone else. The unfortunate aspect of it all was that they just shared the money after I had left and nearly folded up he company.

John Adelegun, who once worked at Ajaokuta as senior engineer told this newspaper that ” corruption, nepotism and sundry sentiment killed Ajaokuta Steel. The method of recruiting staff was marred by irregularities as people of low qualification and expertise were given sensitive positions at the complex.”

In 2015,president Goodluck Jonathan set up a committee led by Stephen Oronsaye, who was then Head of Service, to look into comatose government projects and make recommendations, but  did not submit the findings to National Assembly before that government left office.
Oronsaye Committee had recommended scrapping of the 102 statutory agencies from the current 263,abolition of 38 agencies, merger of 52 and reversion of 14 to departments in the ministries.
One of the agencies recommended for scrapping  was Ajaokuta Steel Company. This newspaper gathered that but for the report to be implemented, government has kept appointing one adviser after another, all to no avail, with these appointments and committees went millions of naira.
This newspaper learnt that the government is planning concession agreement with Global Steel Holding Limited and Global Infrastructure Nigeria Limited. The said concession, which was denied as ever happened, was later said to have been remodified.
The federal government through the then minister of  mines and solid minerals, Kayode Fayemi, said it had yet to concession the Ajaokuta Steel Company to any foreign company.
According to Fayemi,  ” The original concession agreement was signed between the federal government and the Global Steel Holdings Limited and Global Infrastructure Limited has been remodified. It has been remodified to decouple Ajaokuta Steel Company from  Nigeria Iron Ore Mining Company in Itakpe, also in Kogi State. ”

Worried about the state of dilapidation of Ajaokuta Steel, the Paramount ruler of Ibira land ,which is host community to the Steel, Ado Ibrahim, urged the federal government to revive the company. While lamenting the neglect of the company by past administrations, he said ,” it was sheer abandonment of the nation’s engine room of industrialization for massive job creation and economic prosperity. ”
Recounting the amount needed to revamp the complex in a chat with this newspaper, Isa Onobere, who is the sole administrator of Ajaokuta Steel Company, hinted that one of the 43 plants installed in the complex was capable of producing 600,000 tonnes of steel annually., saying the company requires N80 billion to put the plant in use at full capacity.
It would be recalled that the first phase of the project reportedly reached 98 percent completion but was abandoned in 1994.And ever since then, N23 trillion worth of steel products had been imported into Nigeria in nine years,whereas $513 million is needed to complete the project. Total investment for the entire project is put at $4.6 billion.
The Ajaokuta Steel Company was established by former president Shehu Shagari to industrialise the country.