Nigeria’s waste pipe called Ajaokuta Steel: Govt spends N3.6bn yearly on idle workers

The expected growth in the iron and steel sub section of Nigeria is continuously dragged down by political intrigues, yet the country incurs more wastes meeting huge financial obligations.

The wastes includes having to spend more than N3.6 billion yearly, as emoluments for sustaining the workforce of the Ajaokuta Steel Complex, numbering about 2,700, to keep the plant going without rolling out any product.

Also, over $5.6 billion has already gone down the drain in building and maintaining staff quarters, as well as bridges and road network within the complex, which are essential for the rolling out of products from the company.

But for the industry to go into real production, government is currently expected to bear another bill of about $1.21bn in 2017, for turning it around before its new investors can take it up.

Disclosing this to journalists, at the headquarters of the complex over the weekend, the Sole Administrator, Mr. Isah Onobere, reviewed the situation facing the 38-year-old company as needing urgent refocusing.

He gave a breakdown of the amount needed to be spent to get the complex back on line to include, $403 million to be added to the earlier $400 million proposed for total turn around maintenance of the steel complex which audit report has been ready for years, but not released.

“The over 100 per cent increase in the cost of the renovation of the complex came around because of the delay in providing the fund in the past 17 years when condition at the complex was not complicated.

“Today, new funds of $513 million will be required to complete the furnace construction of the steel plant, while $700 million will be needed for external infrastructure,” Onobere stated.

He confirmed that Ajaokuta project has so far consumed about $5.66bn, which went mainly for what he described as maintenance of the extensive estate, known as the Steel Township; as well as having a rail bridge across the River Niger.

According to him, the Vision 20:2020 economic blueprint document has projected that the rolling plant is envisaged to roll out about 5.2 million metric-tonne/per annum of liquid steel production.

But investigations into why the complex, expected to be the base of Nigeria’s industrial leap remains a waste pipe, reveals that political intrigues have been at play in the past 18 years, which has eventually taken a toll on the complex.

The chairman, Iron, Steel and Allied Workers Union, Comrade Yinka Aderigbagbe, said the Ajaokuta Steel Complex and its counterpart, the National Iron Ore Mining Company (NIOMCO), Itakpe, were being run with lack of vision and interest by government.

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“This is despite the fact that all the raw materials for steel products, including the iron ore, are in abundance in the country, with iron ore deposits in Kogi, Plateau and Kwara states.

“However, the vision has since gone out of reality with successive governments refusing to take a leading action on the face-off between ASCL and NIOMCO, which got worse due to politics.”

He said within four years that the construction of Ajaokuta Steel Complex began, the plant had reached 84 per cent completion rate as the government of President Shehu Shagari counted it as the bedrock of Nigeria’s industrialisation.

Also most workers at the complex, who joined the company at inception blame the military take over of government as a factor that stalled the vision, which was that Nigeria would be self sufficient in steel production before the year 2000.

The workers said they were not comfortable drawing monthly salaries without producung, and blame that on the wrong process of not completing the plant, by the Federal Government as envisaged, before handing its management to ASCL, an affiliate of an American firm, Solgas, as concessionnaire under the administration of Chief Olusegun Obasanjo.

They recalled how legal battles over the concession exercise had dragged on until August 2016, when the Federal Government reached an out-of-court settlement with the Indian firm, Global Infrastructure Holding Limited, which is expected to operate NIOMCO for a period of seven years as a settlement for renouncing any claim on the ASCL.

The workers regret the failure of the complex to have attracted huge foreign investment that could have created about 500,000 jobs in the upstream, midstream and downstream industries as has been the case in other countries with less the resources of Nigeria for the sector.

But the workers are still entertaining fear that the private company might sack most of them when it eventually takes cover the complex.

 

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