The minister of power
and steel, Liyel Imoke
has disclosed that government is to carryout technical and financial auditing of the Ajaokuta Steel Rolling company, saying that the concession agree-ment with SOLGAS was a big mistake by the federal government.
Disclosing this at a news conference in Abuja yeste-rday, the minister said in ter-minating the contract of SOLGAS, the federal gover-nment was not liable for any agreements reached between the company and any third party.
He described the new company which recently took over Ajaokuta, Global Infrastructure (ISPAT) as a well grounded company in steel production and manag-ement that would execute the Ajaokuta project to the satisfaction of Nigerians.
“This is the type of com-pany government has sought over the years to complete Ajaokuta,” he said, adding that President Olusegun Obasanjo has approved the concession agreement with ISPAT.
The minister said the new agreement was more favou-rable to Nigeria in the sense that there are no blanket exem-ptions as in that of SOLGAS, just as it made references to performance, staff welfare and plant monitoring among other things.
The minister expressed happiness that ISPAT was chosen to join Nigeria in the challenge to revive Ajaokuta, adding that beyond the challenge, the real challenge is the infrastructure on gro-und and unless the real chall-enge is faced, success will not be achieved.
Global Infrastructure (ISPAT) chairman, Pramod Mittal said the target of his company is to complete the steel making capacity of Ajaokuta in 2005, just as the blast furnace would start in 19 months time.
According to Mittla, the Ajaokuta steel project is a challenging one and his company was confident it will meet the challenge.
“We will use all the available natural resources in the country. We will be careful not to waste Nigeria’s foreign exchange,” he said.
Addressing staff of the steel company at Ajaokuta on Monday, the power and steel minister, Senator Liyel Imoke, said one of the big-gest mistakes of the agree-ment was that it gave the embattled former manager absolute control of the steel company and Nigeria and Nigerians are today worse for it as the dream of Ajao-kuta Steel Company remained unrealised.
SOLGAS activities in the last 13 months, Senator Imo-ke noted, was a huge embarr-assment and vowed to probe all the company’s transa-ctions in the period under review.
“The federal government is embarrassed by the dismal performance and the various allegations of mismana-gement against SOLGAS and we would audit SOLGAS’ transactions and if they mis-managed our resources, they will be held totally accou-ntable for it,” Senator Imoke vowed.
While urging staffers of the steel company to call off the four-week old strike emb-arked to compel compliance with their demands, Senator Imoke promised that the federal government would revert to the status quo as far as issues of salaries and emoluments are concerned until next year when the seve-rance benefits would be paid.
He also urged the workers to cooperate with the new management, Global Infrastr-ucture, a subsidiary of ISPAT Group of India, who formally took over charge of the multi-billion naira steel company yesterday.
The new management, according to Imoke, is one of the largest steel outfits in the world with about a 30 billion dollar capital base.
The company, he empha-sised, is solely a steel manuf-acturing one and has the competence and financial ca-pability to handle the project.
However, the staff are worried over “the hurried” manner the new agreement was signed wondering whe-ther the new deal was not a replica of that of SOLGAS, warning that any agreement without inputs from the original handlers, the TPE of Russia could fail.
The minister who also briefed the House of Repres-entatives Standing Comm-ittee on Steel yesterday, said the audit exercise was in conformity with the termi-nated concession agreement between government and the firm, and that should SOLGAS be found wanting, government would invoke sanctions.
Imoke told the lawmakers that the cringing down clause in the agreement provided for stock-taking in the event the contract comes to an end and therefore, the gover-nment set up a committee to audit SOLGAS. “If we find that they have mismanaged government’s property, cert-ainly we will recommend sanctions,” he said.
The minister, who said the new concession agree-ment signed with ISPAT, an Indian steel company, was different, however, said it was a confidential document that must be kept away from public scrutiny.
Contrary to the deal with SOLGAS, Imoke explained, the new agreement has prov-isions for manpower develo-pment, training, skill develo-pment and penalty for default, and was not tax-free.
He conceded that the deal with SOLGAS had many loopholes and anomalies, but added that these have been taken care of while striking the new pact.
Government, he explained further, needed N99 billion to provide the necessary infras-tructure for the smooth take off of the steel company. Such provisions include rail lines, roads and power supply.
