Ajaokuta Steel Company Swallows $6bn Tax Payers Money Without Operations

…MoU to revive company effective by end of January

By Chioma Obinagwam

The Federal Government (FG) has taken moves to resuscitate Ajaokuta Steel, having gulped over $6 billion tax payers money without result since it began in 1979.

Confiance News gathered that as part of efforts to reform the company, FG and Russia are bargaining to sign a Memorandum of Understanding (MoU) in a fresh attempt to revive the moribund Ajaokuta Steel Company.

It is on record that the facility never started production and various attempts to revive the flagship project by transferring it to private investors failed and the government terminated the concessions.

However, the Minister of Mines and Steel Development, Olamilekan Adegbite, during an interactive session with the media in Lagos Tuesday said the MoU would be signed before the end of January.

Adegbite said, the project would create employment for about 10,000 engineers and facilitate industrial transformation agenda of the government, if the arrangement works out.

The Minister said the Russian engineering and construction group Metprom will undertake the necessary work to bring the facility into operation, and the exercise will be financed by the state-owned development institution Russian Export Center and the Cairo-based African Export-Import Bank which is expected to commit about $1 billion.

He said Ajaokuta’s output would go some way to realizing Nigeria’s President Muhammadu Buhari’s plans to diversify the economy away from oil and encourage local production.

The two governments plan to conclude the deal by January, after which it should take a maximum of two years to complete the blast furnace, the key component of the facility that will turn domestic iron ore into liquid steel, Adegbite said.

Adegbite said funds for the resuscitation of the steel mill is already in place, adding that a committee has been set up to kick-start the project.

The Minister also noted that the revival of the National Iron Ore Mining Company, Itakpe, has been included in the deal signed between the Federal Government and Russia for the completion and operation of Ajaokuta Steel Company Limited.