Juliana Taiwo-Obalonye, Abuja
After four decades on inactiveness, the Federal Government Monday inaugurated the ‘Ajaokuta Presidential Project and Implementation Team’ (APPIT) to kick start the process of re-directing the activities of the Ajaokuta Steel plant with the aim of bringing the steel project back to life.
Nigeria and Russia had agreed to revived the project with Afreximbank pumping in $1 billion, with the Russian government pumping $460 million into the project with an interest payment of less than five per cent.
The construction of Ajaokuta Steel Company began in 1979 with assistance from the then Soviet Union, but the facility never started production and has sucked up $8 billion of public funds. Several attempts to revive the flagship project by transferring it to private investors failed and the government terminated the concessions.
The new committee is chaired by the Secretary to the Government of the Federation, Boss Mustapha, while the Minister of Mines and Steel Development is the alternate Chairman, Olamilekan Adegbite.
Other members of the committee are Permanent Secretary, Mines and Steel Development, Permanent Secretary, Ministry of Finance, Solicitor-General of the Federation/ Permanent Secretary Ministry of Justice, Gabriel Aduda, Sole Administrator, Ajaokuta Steel Company Ltd Member, Sole Administrator, National Iron Ore Mining Co. Member, Vincent Dogo (Industry Expert), Prof Elegba S B (Industry Expert), Dr Godwin Adeogba (Industry Expert), Director-General, ICRC and Director, Steel; MMSD.
Mustapha noted in his remark that preliminary work has commenced to determine the parameters for an effective and coordinated take-off of rehabilitation works on the Steel plant.
The terms of reference include: Engage in all bilateral negotiations as shall be necessary on behalf of the Federal Government of Nigeria leading to the execution of the Government-to-Government Agreement with the Russian Federation and the Afreximbank; Provide all relevant technical and other inputs necessary to close the Government-to-Government negotiations; and Ensure that the best extreme possible, all relevant raw materials are sourced locally, bearing in mind the local content provisions and the Presidential Executive Order 005.
Others are to: Scrutinize and assemble Nigerian Content Engineering, Procurement and Construction (EPC), Special Purpose Vehicle Contractors which will embody the Co-Concessionaire representing Nigeria’s interest in the Build-Operate-Transfer (BOT) Concession; Ensure the resuscitation of Ajaokuta Steel Plant (ASP) based on the original design; and Ensure timely commissioning of the Ajaokuta Steel Plant (ASP) within a reasonable period to be agreed upon by the parties to the agreement and recommend primary tenure of a Build-Operate-Transfer (BOT) Concession.
According to the SGF, the Ajaokuta Steel plant has languished for about four decades and previous efforts at reviving it had proved abortive. This, he said, has resulted in avoidable massive foreign exchange losses at an intolerable opportunity cost to the country.
“The pressing need to redress these avoidable challenges has necessitated this presidential intervention at this time. This is further underscored by difficulties being witnessed with present challenges in the global oil industry.
“Revamping the Ajaokuta Steel Plant, therefore, clearly presents a unique opportunity to make us West Africa’s largest fully integrated steel producer and most importantly accelerate our industrialisation especially in steel-related industries.
“Honourable Minister and distinguished Members of the Committee, this government places a lot of value on the diversification of the economy, hence, Mr. President’s participation at the Russia-Africa Summit last year in Sochi, to discuss the resuscitation of the Ajaokuta Steel Plant with his Russian counterpart, President Vladimir Putin.
“Following the bilateral discussions in Sochi, Russia, the Ajaokuta Steel Project is to be resuscitated on the basis of a Government-to-Government agreement with funding from the Afreximbank and the Russian Export Centre. However, one of the key issues discussed by the parties was the Technical Audit, Upgrade, Completion and Operation of the Ajaokuta Steel Company.
“Today’s inauguration of the “Ajaokuta Presidential Project and Implementation Team” (APPIT) is therefore meant to kick start the process of re-directing the activities of the Steel Plant with the aim of bringing the Steel Project back to life for the growth and economic development of our dear nation.
“I am happy to note that preliminary works have commenced to determine parameters for effective and coordinated take-off of rehabilitation works on the Steel plant.”
Adegbite in his remark said: “This has been long in coming but it’s better late than never. We intend to continue to push this even during this COVID time, so that all the groundwork to be done will be done. As soon as the COVID restrictions is lifted we will be able to move at faster pace.
“The SGF has been very instrumental in bribing this about. He is the chairman of this team, we will carry on most and report to him because he has very busy schedule even prior to this PTF that he is saddled with.”