| Ajaokuta Steel Rolling
Mill: Putting Nigeria back on the road of industrialisation
By BIMBOLA OYESOLA
Monday, November
30, 2009
|
•Diezali
Alison-Madueke
Photo: Sun News Publishing |
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Early this month, stakeholders in the iron and steel sectors
in Nigeria met in Abuja to examine the utter neglect of this
viable and most important sector of the nation’s economy
most especially in meeting the dreams of Vision 2020.
With the current development in the country, it is disheartening
and quite unreasonable that government is bent on retrenching
80 per cent of the workers of the Ajaokuta Steel Company Limited
and National Iron Ore Mining Company Project, Itakpe. This,
no doubt, will make the proposed government Vision 2020 a
mirage.
Federal Executive Council (FEC) had last year April approved
immediate cancellation of he concession agreements between
the Federal Government and Global Infrastructure Holdings
(Nigeria) Limited (GIHL) on the Ajaokuta Steel Company (ASCL),
the National Iron Ore Mining Company (NIOMCO() and the Delta
Steel Company (DSC) over non-compliance to concession agreements
by the investors.
The council presided over by President Umaru Musa Yar’Adua
with Vice President Goodluck Jonathan in attendance then ordered
the prosecution of indicted officials of the Federal Government
and promoters of GIHL for asset stripping based on the interim
report of the Economic and Financial Crimes Commission (EFCC).
The Federal Executive Council decided on the action then after
the discovery that instead of investing external funds on
the completion of the projects as expected GIHL embarked on
massive borrowing from local commercial banks.
The former President, Chief Olusegun Obasanjo Administration
had decided in August 2004 to sell Delta Steel Company and
concession Ajaokuta Steel Company and National Iron Ore Mining
Company, all to GIHL, put forward by a certain Indian, Mr
Promod Mittal. No effort was spared by stakeholders then to
make the authorities realise that the preferred company did
not have the technological and financial wherewithal to turn
around the fortunes of the plants, which are key to Nigeria’s
industrialisation.
The steel company it would be recalled was started in 1979
shortly before the former President Obasanjo handed over reigns
of government as military Head of State to an elected civilian
government of Alhaji Shehu Aliyu Shagari.
The meeting of the stakeholders attended by the iron and Steel
Senior Staff Association of Nigeria (ISSSAN), the Steel and
Engineering Workers Union of Nigeria (SEWUN). The Nigerian
Society of Engineers (NSE), the Nigerian Metallurgical Society
and the African Iron and Steel Association (AISA) had then
condemned the lukewarm attitude of the Federal Government
which has rendered both Ajaokuta Steel Company Limited and
the National Iron Ore Mining Project, Itakpe inoperative.
As far as the stakeholders were concerned, the recent decision
by the Power and Steel Ministry to completely retrench the
entire workers of the Ajaokuta and NIOMCO would be a national
disaster and aberration, considering the government’s
seven-prong agenda of employment generation and industrialisation.
One of the serious puzzle in he sector was non-implementation
of the budgetary allocation for the Technical Audit of the
two projects 11 months after it has been passed and signed
into law by the National Assembly and the President respectively.
The non-utilisation of the N3.6 billion earmarked for the
construction of super-concentrate four line in National Iron
Ore Mining Company, Itakpe, also left much to be desired.
The stakeholders, after due deliberations, called on the Federal
Government to immediately set machinery in motion for the
completion and commissioning of Ajaokuta Steel Plant by 2011
and the National Iron Ore Mining Company, Itakpe, by 2010
in relation to the economic blueprint for the realisation
of Vision 2020 recently adopted by the Federal Government.
The stakeholders also demanded removal of the iron and steel
sector from the Ministry of Mines and Steel Development, advising
that the sector should henceforth be supervised directly by
the President in order to avoid bureaucratic bottleneck being
experienced currently by the sector.
“Many developing economies like South Korea showed that
steel development is easier to achieve under the direct control
of the President,” they insisted.
The stakeholders also believed that there would be hedge way
if government through the National Infrastructural Regulatory
Agency (NIRA) could advertise for expression of interest for
the development of the required outstanding infrastructure
needed for the completion and commissioning of the two projects
as listed thus:
— Construction of Ajaokuta – Oturkpo Rail Line,
160 kilometres. Design and route alignment completed and a
rail bridge along the route already constructed.
— Construction of Eganyi-Jakura Rail Line (70 kilometres)
to link Itakpe – Ajaokuta Line awarded to Julius Berger
in2002 to be reactivated.
— Construction of link access road to Osara Dolomite
deposits – 10 kilometres each.
— Rail sidings to Burum, Ikpeshi Dotomite deposits.
The issue of non-payment of salary and arrears of workers
of the two companies has always being a major problem which
the two unions in the sector has made several agitations on
behalf of the workers.
As a result, the stakeholders advised the government to capture
the recurrent expenditure of both the Ajaokuta and NIOMCO,
including arrears of salaries and allowances and make adequate
provision for the completion of the two projects in the 2010
budget.
Part of other far-reaching decisions also resolved at the
meeting is the fact that government should undertake the technical
audit of the two companies that have since been appropriated
since January 2009.
Likewise, to avoid further decay of the assets of the companies,
the meeting urged the government to adequately fund the operation
of the completed units of the two companies in order to maintain
the quality of the assets and generate revenue for the government
whilst at the same time paying salaries of staff as a self-sustaining
strategies.
It is evident at the meeting that the proposed retrenchment
of the entire workers of the companies will spell doom for
the realisation of the Vision 2020, but rather is to keep
existing staff fully engaged.
The existing staff trained at high cost in various steel plants
all over the world, no doubt will help sustain the operations
of the commissioned units at the maintenance, upgrading and
rehabilitation of the remaining plant units.
The stakeholders tasked the government to involve the two
registered unions in the sector ISSAN and SEWUN, and other
relevant stakeholders in the sector on the action s the government
may have intention of taking for fruitful discussions and
decisions making to avoid negative consequences on the sector.
It is also resolved thus: “That the government should
take a queue from the developed nations like Japan, China,
UK, France, Germany and Russia that have seriously invested
and developed their steel industries for the current industrial
revolutions the countries are enjoying today, and equally
African countries like South Africa, Egypt, and of recent
Libya who have all surpassed the hurdles of industrialisation.
“It is of note and interest to inform the government
that Emirate Steel in the United Arab Emirates (UAE) that
was set up in 2001 as a rolling mill of 740,000 tonnes per
anum have since become an integrated steel plant of 1.3 million
tonnes with further expansions to 3 million tones by year
2011 and 6 million tonnes by year 2014 within this short period
of establishment.
“We believe that our own government can urgently take
the political will and emulate this great and give the necessary
attention needed to lift our steel sector especially Ajaokuta
and NIOMCO out of the doldrums.”
The stakeholder queried the justification between the disparity
in the sales of Delta Steel Company, which was brought for
the sum of US$30 million by GIHL while the same company has
pauperised Nigerian banks to the tune of several billions
of naira.
The company, I was revealed during the period rather than
revolving the million for the turn-around of the companies
had engaged in capital flights.
They, however, urged the Federal Government and the Bureau
of Public Enterprise (BPE) to urgently revoke the sales agreement
of Oshogbo Steel Rolling Mill and the Nigerian Machine Tools,
Oshogbo, since the core investors have since abandoned the
original plans of making steels and turned the complex and
the plant into warehouses where cements are stored, by the
owners.
But in case of Jos Rolling Mill, the meeting appealed to the
government to allow the core investor, Messrs Jaden of Ukraine
to completely take over the Mill and perform the Turn Around
Maintenance (TAM) for production.
Government is likewise charged to provide adequate funding
for the National Steel Raw Materials Exploration Agency (NSREA)
and National Metallurgical Development (NMDC), Jos, which
are main agencies with core responsibilities of sourcing and
developing raw materials need in the sector.
“The agencies have since been under-funded and the government
needs to urgently fund the agencies especially in replacing
the obsolete equipment like drilling rigs that have been purchased
as far back as 1971, the stakeholder charged.
While the stakeholders made a case for the accreditation of
the metallurgical Training Institute, Onitsha, they similarly
appealed to the Federal Government to source for the outstanding
balance of pension liabilities to the workers of Delta Steel
Company (DSC).
For the survival of the local industries, the stakeholders
called on the Federal Government to increase the tariff on
imported finished steel products to 75 per cent or outright
banning of importation of finished products while they also
made case, urgent provision of a dedicated stable power lines
to the industries to mitigate the erratic power supplies.
As the stakeholders insisted, the government must take holistic
approach towards the development of the country’s enormous
resources in terms of steel development for the achievement
of the Vision 2020, which unequivocally is the surest way
of industrialising the nation.
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