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Ajaokuta: Waiting for steel to roll



Ajaokuta: Waiting for steel to roll


Described as Nigeria’s bedrock of industrialisation, the Ajaokuta Steel Company Limited, located in Kogi State, is once again in the news for every good reason expected of a country undergoing industrial rebirth.

Having remained comatose for years, the steel mill built with all sophistications and expertise necessary for such a project, which suddenly became one of Nigeria’s dry jokes as far as investment is concerned, is being touted to roll out steel soon to meet local needs and possibly for export.

For the period it stopped operating, it has become more of a butt of shaggy-dog story and an easy source of siphoning funds from successive administrations by corrupt officials.

Known for its consistent failure in running businesses, Federal Government’s latest attempt at revamping the near moribund steel facility, rather than being seen as another plus to this administration’s diversification agenda and industrialisation pursuit, is being perceived in some quarters as another attempt to move funds into private pockets.

With the latest narrative already anticipating an expenditure of over $600 million to begin with, it is obvious that the excitement exuded by those close to the project may, as usual, derive from expected pecuniary gains than the perfection of the facility.

Already, an internal technical audit conducted on the facility between February and April this year, has confirmed the plant 95.7 per cent ready for take-off.

Good enough, money is already being saved as the audit was undertaken fully by the company’s engineers, technicians and other professionals in line with Federal Government’s policy on the utilisation of maximum local content possible in the execution of sundry public works in the country.

The story of the 37-year-old steel mill has been another demonstration of government’s lackadaisical approach to investment since oil was discovered in commercial quantity in the country.

Sadly, every attempt to revive the mill has never seen the light of the day even though not less than $8 billion has been sunk into the endeavour without the complex rolling out a pin.

While at the helm of affairs as Minister of Mines and Steel Development, Dr. Kayode Fayemi had anticipated that once the first phase of the agreement is accomplished, the Federal Government would quickly move into accomplishing the objectives of concessioning the plant to the most competent operator, who meets the requirements of credible track record, technical capacity and financial competence.

Considering the eagerness with which the Federal Government signed the first agreement with the defunct Soviet Union following a 1967 survey carried out by United Nations Industrial Development Organisation (UNIDO), which identified Nigeria as a potential steel market, the country, by now, should have been one of the biggest steel markets globally.

The reason for the failure is crystal clear. Successive administrations’ non-profitable and purely unpatriotic attitude towards projects established by their predecessors also permeated into Ajaokuta steel with leader after leader attempting to implant their names on the project.

Historically, although conceived in 1958 when the colonial administration commissioned a feasibility study on iron ore deposits in the country, actual work on the steel company commenced in 1979 during the administration of Alhaji Shehu Shagari. It, however, suffered setbacks when the Second Republic government was toppled by the military.

In 1985, General Ibrahim Babangida visited the complex and, in 1986, he signed another protocol agreement on the project with the same Tyajzhpromexport, a Soviet state-owned firm, for an integrated steel plant of 1.3 million tonnes of long products, rescheduling its completion date to 1989. The agreement suffered another setback as operations were halted in 1992, even though the Head of State’s renewed agreement was never necessary in the first place.

For a country with an embarrassingly high volume of unemployed youths, it is most disheartening that the steel mill conceived to offer direct employment to over 500,000 staff and indirect workers in their thousands, currently boasts of just 2,700 workers, who literally idle away within the premises.

Now that the Russian interest is still very much in the project, the eagerness with which Indians and Chinese are stepping into the race should arouse utmost caution for government.

The opportunities open for investors include conversion of billets to wire rods and steel bars, engagement as jobbing agents, oil reconditioning and reclaiming, mass production of jaw crusher machine and legal transaction in Ajaokuta’s products both within the country and for export.

To avoid further crisis of confidence, common sense dictates that with the eight-year dispute resolved and government anxiously upbeat to get the plant running as soon as possible, Tyajpromexport (TPE) of Russia, the firm that built it from the scratch to 98 per cent completion level should be invited to continue from where it stopped, provided the terms are not against the host country.

We also advise the Federal Government not to fail as far as this project is concerned as the massive waste has constituted an eyesore for too long a time.

It is also our opinion that whoever is taking over the management of the plant should make it a point of obligation to clear any form of liability so as to run the place under very smooth atmosphere.

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