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As the complexity of the back-to-life plan of the moribund the Ajaokuta Steel Company Limited lingers, fresh report submitted by the appointed consultant, Greenwich Trust Limited, has put three revival options on the table for the government to pick one.
These include joint venture partnership as in the upstream oil sector, outright sale, and another tortuous journey of concession.
Business Hilights recalls that the height of the sad story and that government’ naivety on the matter was when in the year 2000, the original contractor, TPE of Russia, audited the complex, and came out to report that only $400m was required to put it to good use within 24 months, but the Federal Government failed to implement the proposal.
It was further observed that series of failed concession deals that saw all rolling mills in Nigeria including Ajaokuta collapsed at a time Nigeria is become the highest importer of iron products in Africa.
Explaining more to our correspondent, the Sole Administrator of the company, Mr. Joseph Isah, said that it would cost about $700m to complete the plant and put it to good use; and another $663m in external infrastructure financing for the transportation of the plant’s raw materials and final products.
According to him, Nigeria currently coughs out over N6tn per annum on the importation of steel products, “while successive governments had insisted that it could not afford the resources to rehabilitate and put the steel complex to good use”.
“Recently, even though not adequate, government has begun to commit resources towards the maintenance and preservation of the equipment and facilities of the plant. This is pending the decision on the appropriate way forward regarding the completion, inauguration and continuous operation of the steel plant.
“To this end, the government is currently considering the report on various options on the way forward as advanced by a nominated transaction adviser concerning outright sale, concession and joint ventures.”
Isah recalled that “As at the time the Federal Government stopped funding the complex in 1994, the first phase of the project had attained 98 per cent completion”.
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