Senate asks EFCC to probe N529b Ajaokuta Steel contract
From Alifa Daniel,
Abuja
THE Ajaokuta Steel Company Limited (ASCL) concession agreement between the Federal Government and Solgas Energy Limited is worth N220.5 billion ($1.5 billion) and not N529.2 billion ($3.6 billion), the Senate has said.
This is contained in a report by the upper house committee, which probed the deal.
Nigeria, according to the report, is being short-changed about N298.7 billion through the contract. While adopting the report yesterday, the Senate urged the Economic and Financial Crimes Commission (EFCC) to investigate the transaction.
The probe was done by the Senate committees on Power and Steel and, Judiciary and Legal Matters.
Headed by Senator Arthur Nzeribe, the panel said that the actual amount required for the completion of Ajaokuta project was $1.5 billion and not $3.6 billion as agreed in the agreement.
Nzeribe is the chairman of the Senate Committee on Power and Steel.
But in a statement yesterday, the company okayed the Senate call on the EFCC to wade into the deal. The Executive Vice Chairman of Solgas, Mr. Seun Oyefeso, said: "I am not surprised at the report, they are welcome to investigate our activities in Ajaokuta. The beauty of this for Nigeria is that at last people have seen that Ajaokuta is feasible. If those complaining thought it was not workable, they wouldn't be fighting hard for other companies to take over".
The findings of the committee include the followings:
- that Solgas Energy Nigeria Ltd is not capable and does not possess the financial strength, managerial and technical capacities to handle the concession agreement in any of its ramifications;
- the project cost of $3.6 billion as claimed in the estimate is well above the ambit of Solgas. It is in excess of what is required to execute the project. Besides, the amount required for the job is less than $3.6 billion. The estimated project cost is in the magnitude of $1.5 billion;
- that Solgas Energy Nigeria Ltd was incorporated in 2001 with a capital of only N1 million, the parent company Solgas Energy Ltd was registered in the Isle of Man in the United Kingdom (UK) in 2000, with a net worth asset of $60 million".
The Senate, therefore, recommended that the executive should terminate the contract and engage a viable partner with proven financial capacity to execute the project with Solgas having no stake whatsoever in the new arrangement.
It added that the contract should be subjected to further due process test in order to redefine most areas.
After serious debate, senators were of the view that the role played by all government officials involved in the arrangement should be investigated with a view to punishing any identified defaulter.
Senate President, Chief Adolphus Wabara was quick in suggesting that the EFCC should take over the matter and it was adopted by the house. Senate Chief Whip, Victor Oyofo lamented that what happened in the Ajaokuta contract had grossly violated the principle of transparency, which this government was known for.
Relatedly, the management of Solgas has described as unfortunate the recent protests by some workers of the plant.
It called on them to remain calm and go about their normal duties so that the Federal Government can address the problem of their being paid half salaries.
Oyefeso said though he sympathised with the workers over the cut in their wages by the government, the workers ought not to have threatened to down tools.
The concession agreement signed between the government and Solgas on ASCL states that the government would continue to pay salaries and allowances of workers while the firm provides funding for equipment and expertise needed to rehabilitate, complete and manage the steel complex within the next 10 years.
