The Senate on Tuesday set up an ad hoc committee to probe the $496 million the Federal Government paid to the Chairman of Global Infrastructure Holdings Limited (GINL) in September 2022 as settlement for the contractual disputes on Ajaokuta Steel Company Limited (ASL).
The Senate also ordered the committee to probe the affairs of Ajaokuta Steel and the National Iron Ore Mining Company (NIOMCO) from 2008 to date.
It will summon and interface with relevant Ministries, Departments, and Agencies (MDAs) and other critical stakeholders in the steel sector, especially those with interest in Ajaokuta Steel Company Limited and NIOMCO “to obtain relevant information and submit a comprehensive report to the Senate regarding the affairs of the two plants between 2008 to date”.
The Senate also asked the FG to review extant policies and laws on steel development in the country with a view to adopting a strategic implementation of “Plan on Steel Development in Nigeria” bearing in mind the importance of steel to the nation’s quests for industrialisation and economic self-reliance.
The Red Chamber made these resolutions after considering and adopting a motion, titled: “Urgent need to investigate alleged incidences of corruption and inefficiency at the Ajaokuta Steel Company Limited and the National Iron Ore Mining Company (NIOMCO) located in Kogi State,” sponsored by Senator Natasha Akpoti-Uduaghan (PDP, Kogi Central).
Senator Natasha Akpoti-Uduaghan, who led the debate, said the investigation would uncover the circumstances that led to the re-concession of NIOMCO.
She said the initial concession agreement was validly terminated by the late President Umar Musa Yar’Adua’s administration, adding that the Federal Government set up Ajaokuta Steel and NIOMCO in the late 1970s to establish Nigeria as a leading steel exporter but have been inoperative for decades due to a lack of political will and bureaucratic corruption.
The Senator said since 1994, when the Tyazhpromexport (TPE) exited the Ajaokuta Steel over allegation that Nigeria did not discharge fully its financial obligation to the agreement, the Ajaokuta Steel was reportedly at 98 per cent completion yet has remained inoperative.
She recalled that sometime in 2001, Nigeria’s hope to have the Ajaokuta Steel Plant completed and put into operation was rekindled, following the signing of a bilateral agreement between Nigeria and the Russian Federation.
She said that failed, sfter what she called the surreptitious concessions of NIOMCO and ASCL in June 2003 to “unqualified” Solgas Energy Limited, a company she described as lacking the financial and technical expertise to handle the project.
She said the company had never been in the ore and steel business, adding that the concession of ASCL and NIOMCO complexes went contrary to the recommendation of the House of Representatives Committee on Steel in 2004.
“After reviewing the Inuwa Magaji Administrative Panel of Enquiry Report on the late President Yar’Adua, the Federal Executive Council (FEC) unanimously terminated the concession agreement on April 2, 2008.
“The termination was due to the operations of ASCL, NIOMCO, and Delta Steel mills, as well as breach of agreement and unwholesome practices.
“Additionally, the concession agreement was found to be unpatriotically skewed in favour of GINL.
“The House of Representatives had conducted an investigation into the Iron and Steel sector in 2018 with far-reaching resolutions aimed at resuscitating the ASCL and NIOMCO steel mills.
“However, the Federal Government either ignored these resolutions or has not implemented them yet. Many steel-producing countries are disturbed by the $253 million organised economic crimes in India.
“Additionally, GSHL’s Pramod Mittal is notorious for engaging in questionable business activities, such as embezzlement and asset-stripping in countries like Bulgaria, the Philippines, Libya, Bosnia, Zimbabwe, Montenegro, Serbia, and many more.
“In Bosnia, Pramod Mittal, who is associated with GSHL, was arrested and charged with organised crime. Additionally, GSHL’s management workers were jailed for economic crimes.
“However, it seems that Nigeria has fallen victim to Mittal’s sharp contract fraud yet again, in relation to the payout of $496 million in 2022.
“This is not the first time, as Nigeria previously conceded NIOMCO to the same GINL in August 2016. Unfortunately, these fraudulent activities are facilitated by unpatriotic Nigerians who hold trusted government positions…”
“It is disheartening to note that Nigeria is currently spending approximately $3.3 billion annually on importing steel, despite having abundant natural ore resources.
“This is because the Ajaokuta and Delta Steel plants, which could have served as valuable assets to the nation, are in a state of disrepair. These plants have become channels for the misappropriation of public funds, which is a huge burden on Nigerian taxpayers.
“I am concerned about the management structure at the Ajaokuta Steel Complex. It appears that a Sole Administrator has been making all decisions regarding the company’s affairs for the past 12 years without any input from others.
“This has led to increased inefficiencies at the company. Recently, President Bola Tinubu questioned the N33 billion electricity debt,” she said.
The senators who spoke on the motion supported and approved its prayers when they were put to voice vote by Deputy Senate President Barau Jibrin.
The Deputy Senate President told the ad hoc committee to submit its report within four weeks.