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How FG abandoned completion of Ajaokuta Steel complex at 98% in 1994

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The bitter truth is that in 1994, the firm was just in need of $400m for completion, but now, it will need more than $1.21bn to revive it.

The said facility will come in two trenches. First; about $513m to complete the construction of the steel plant, and $700m for external infrastructure.

Before now, the complex has consumed about $4.66bn, including the cost of the plant; the cost of an extensive estate known as the Steel Township; and that of the rail bridge across the River Niger.

These were the revelations of the current Sole Administrator of the moribund Ajaokuta Steel Company Limited, Mr. Isah Onobere, in an interview weekend.

Details secured by our correspondent in the course this investigations at the Ministry of Solid Minerals showed that what can best be described as the worst happened in 1994 when the military President, General Ibrahim Babangida stopped the work entirely and sacked the Russian contractors, the TPE. The worse part of the story was that the plant then had attained 98 per cent completion rate.

The Sole Administrator, Onobere, an engineer disclosed that “By 1994, when the Federal Government, owner of the plant, stopped funding the completion of the project, the plant was at 98 per cent completion status”.

“The Vision 20:2020 economic blueprint document even goes beyond the rolling plant to envisage the actualisation of the third phase of the project, the 5.2-million-metric-tonne/per annum of liquid steel production.

“The plan takes into cognisance, the technical audits of the plant conducted by two reputable international firms in 2000 and 2010, Messrs TPE (original builders of the plant) and Messrs Reprom, respectively.

Continuing, Onobere recalled that “Based on the TPE audit, a work schedule spanning 24-month duration and involving the injection of about $400m is the chief feature of the rolling plan.”

Last failed effort on revival of the complex was made by former President Olusegun obasanjo in 2003 when he gave out the firm to an American firm, Solgas, as concession in a controversial transaction.

But when it became clear that Solgas is failing because of lack of the needed technical competence and deep pocket to bring it back, Obasanjo cancelled the concession and handed it over to an Indian firm, Global Holding Infrastructure Limited, to manage for a period of 10 years. The Indians still failed as allegations of asset stripping trailed the company.

Just last week, the federal government came up with three new redevelopment plans including Joint venture partnership deal, completion or total sale out in form of scrap.

The Federal Executive Council (FEC) is yet to take a decision on the way forward.

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