Why Solgas Withdrew From N529b Ajaokuta Deal
From ALIFA DANIEL, Abuja
BEYOND bowing to pressure from staff of Ajaokuta Steel Company and a damning report from the Senate, it was learnt at the weekend, that Solgas Energy Limited also asked for the dissolution of the Concession Agreement it had with the Federal Government on the $4 billion (N529 billion) gigantic steel complex.
The company's request for the dissolution, made available to The Guardian in Abuja yesterday, showed that the energy company with American strings, admitted that since it signed the Concession Agreement with the FG over a year ago, it had been unable to raise the required capital.
In a letter to the Minister of Power and Steel, Senator Liyel Imoke, Solgas Executive Vice Chairman, Mr. Seun Oyefeso, wrote: "...we have not succeeded in securing this capital since mobilising to site after the execution of the contract in June last year".
In the agreement signed last year, Solgas had agreed to raise the sum of $3.6billion (about N529 billion) required to rehabilitate, complete, operate and manage the Ajaokuta Steel Plant.
Part of the funds was to be used to build a 2, 300 megawatt power station and a gas gathering facilities, among others.
Two weeks ago, staff of the steel plant went on violent protest to express their anger over continued retention of the energy company which they said did not have the required financial muscles to run the plant.
Last week too, the Senate Committees on Power, Steel and Metallurgy, and Judiciary and Legal Matters, in a report to the Senate called for the revocation of the agreement and investigation of the Solgas team. The Senate adopted the report wholesomely.
It was learnt on Friday that with the dissolution of the agreement, the Federal Government is favourably disposed to having an Indian Steel Company Group, ISPAT, take over the concession.
The letter written by Solgas and titled: 'Request For the Dissolution of the Concession Agreement Between the Federal Government of Nigeria, Ajaokuta Steel Company Limited, Solgas Energy Limited and Solgas Energy Nigeria Limited',
released to The Guardian by Ministry of Power and Steel sources reads in part:
"We have given serious consideration to the social, economic, and political implications of the non-implementation of this potentially wonderful project to Nigerians and the Federal Government. It will be abetting short of sabotage to stand obstinately in the way of success of the Ajaokuta Steel Project with the full knowledge that our constraints cannot be overcome in the timely manner required by the government and people of Nigeria to bring this project to fruition...
" On behalf of Solgas Energy Limited and Solgas Energy Nigeria Limited and the Board of Directors of Ajaokuta Steel Company Limited, we express our gratitude to the Federal Government and people of Nigeria for the opportunity to serve the nation."
The letter was signed by Segun A. Oyefeso.
