• Processing bids by 11 investors
• It is asset stripping, says critic
The Federal Government may have made up its mind to privatise the multi-million Naira Ajaokuta Steel Plant located in Kogi State despite opposition by a section of the nation’s economic intelligentsia.
Mr. Abubakar Bawa Bwari ,Minister of State for Mines and Steel Development, explained that the decision to privatise the plant, believed to be more than 90 per cent completed, was due to the fact that government had proven to a bad manager, given past experience. Bwari, who gave the hint in Abuja yesterday while presenting the ministry’s three years scorecard, said 11 core investors had submitted bids for the purchase of the plant and the government was reviewing the applications with a view to picking a competent firm with vast technical and financial war chest because of the important place steel industry occupies in a country’s development.
“In Nigeria, we have proven beyond doubt that government is a bad manager and has no business to be in business. For instance, we have mismanaged many companies in the past like the Nigerian Railway Corporation, Nigerian Airways, Nigerian Telecommunications Limited, even the Nigerian National Petroleum Corporation (NNPC) that is wobbling.
The Federal Government may have made up its mind to privatise the multi-million Naira Ajaokuta Steel Plant located in Kogi State despite opposition by a section of the nation’s economic intelligentsia.
Minister of State for Mines and Steel Development, Mr. Abubakar Bawa Bwari explained that the decision to privatise the plant, believed to be more than 90 per cent completed, was due to the fact that government had proven to a bad manager, given past experience. Bwari, who gave the hint in Abuja yesterday while presenting the ministry’s three years scorecard, said 11 core investors had submitted bids for the purchase of the plant and the government was reviewing the applications with a view to picking a competent firm with vast technical and financial war chest because of the important place steel industry occupies in a country’s development.
“We will not take that risk. That is why we will hand over Ajaokuta Steel Plant to a private company that has enough funds and technical capacity to turn it around for the benefit of everyone. We would prefer to have a Nigerian company with this capacity to manage it because there is a lot of international steel politics because of the strategic roles steel plays in the advancement of countries,” the minister said. He declined to name the investors bidding for the plant.
One of the critics of privatization of the Ajaokuta plant, Mr. Enwegbara, a development economist, described the government’s decision as selfish and part of assets stripping on the eve of the country’s general election. He said the government could borrow more locally and internationally.
“This administration cannot embark on sale of a key strategic asset like Ajaokuta Steel Plant when it has less than a year to the end of its tenure. It should wait until after the elections, if it wins again, then it can do that. Besides, the executive lacks the power to sell such a critical national asset without the approval of the legislature which, I am aware, is making efforts to revitalize the plant.
“Another concern is that if the complex is sold under any name, it will be given away after the governments over $30 billion investment in it. Let them look for money elsewhere to fund the budget. They cannot sell a key national asset like that to fund one fiscal budget. What happened to the recovered loot?” he asked, insisting that the government stands to gain more by revitalizing the plant than selling it.
A top management staff contacted on the development yesterday said the complex remained the bedrock of the nation’s industrial growth. He implored the Federal Government to “fund the plant and manage it with capable manpower instead of selling it because previous experience shows that with better manpower and funding, the plant can work.”
“If this plant is not profitable, why the Indian investors that were sacked from here are still contending the matter. Let the current administration be careful so that we don’t play into the hands of our enemies who don’t want us to be self-reliant.”
The experience with some of the steel rolling mills should teach us a lesson. Some of them are now just warehouses and the supposed investors are busy stripping the assets. We need to be careful because Ajaokuta remains the elixir for Nigeria’s development.”
Finding revealed that a recent audit conducted by the Ajaokuta Steel Complex showed 95.7 percent erection readiness with a reactivation and completion requirement standing at $652 million
The Sole Administrator, Somalia Abdul-Akaba, while submitting the technical audit report recently to Bwari, expressed his happiness over the renewed vigor by the Federal Government to move the steel plant project forward. He said the internal technical audit which was conducted on the facilities of the plant between February and April 2018 was an updated version of the last technical evaluation done in 2010 by M/S Reprom Nigeria Ltd.
The chief executive officer explained to the minister that the technical audit was carried out by the seasoned engineers, technicians and other professionals of the Ajaokuta Steel Company Limited.
The Ajaokuta plant was envisioned to take full advantage of the ECOWAS treaty and the export expansion scheme of the Federal Government to widen its market base to the whole of the West African Sub-region and beyond through the production of quality steel and steel products for the industrialization of Nigeria while meeting all standards.
