Abuja – Sumaila Abdul-Akaba, the Sole Administrator of the Ajaokuta Steel Company, said privatisation is the best option to revamp the moribund steel complex in Kogi State, North Central of Nigeria.
He said this has become inevitable because government doesn’t have the resources to complete the outstanding phases for its full operationalisation.
Abdul-Akaba spoke while defending the 2023 budget of the company before the House of Representatives committee on Mines and Steel, in Abuja.
He said the size of the asset and quality of equipment installed at the company can generate up to $6 billion should Nigeria decide to liquidate the company by selling it as scrap.
He disclosed that the steel complex is a “massive infrastructure and the Russians who built it gave us the best of technology and enough spare parts to maintain it for many years.
“Privatisation of the asset is the best way to go if done the right way. Government doesn’t have the resources to complete it and run it as required, which is why private sector participation either through consessioning or partnership agreement would be a good development.”
He said while the complex generates its own power which is sustainable, it hasn’t explored the idea of selling the same to the national grid because it’s a management decision that requires board approvals.
Lawmakers had asked the Sole Administrator why the company is not maximising its electricity generation potential, as well as other products despite posting huge wage bills on personnel, security and maintenance activities.
Responding, Abdul-Akaba said the amount spent on personnel for security and maintenance of equipment was justifiable.
He stated that before the engagement of the security personnel, equipment worth billions of naira were stolen from the facility.
According to him, the amount utilised for the payment of some staff who are not on the Integrated Personnel Payroll Information System was meaningful owing to the services they offer.
“Anytime you look at the personnel cost, most of the questions people ask is why you are keeping these personnel. Ajaokuta investment is within six billion to eight billion dollars and if you look at the amount we are spending to keep the plants, I don’t think that is too much.
“Aside from that, one of the basic things we should go to later, if I finish the details of this performance, is the security issues.
“We have also spent a lot of money on security. As of today, we have over two hundred and twenty security guards that are officially not on the payroll of IPPIS,” he said.
The Sole Administrator also said the company engaged the Federal Fire Service and the Military, Department of State Services and that the company sees to their welfare.
He, therefore, called for the removal of bureaucracies for the company to commence immediately.
“If Ajaokuta project is initiated and completed, funds won’t be a problem but one of the problems is bureaucracy.
“I can assure you that if that company becomes fully operational today, it will pay itself and recoup money invested within 10 years,” Akaba said.
He maintained that Nigeria is not doing enough to utilise the Ajaokuta Steel to change the fortunes of the country.
Earlier, the Chairman of the Committee, Abdullahi Ibrahim Halims, stressed that the place of steel industry in the development and industrialisation plans of the country is non-existent, adding that Nigeria must be proactive to revive the mines and steel industry.
Some members of the committee raised key questions on how long Nigeria will continue to play around the issue of industrialisation without making serious efforts to revamp the Ajaokuta Steel Complex.
Hon. Bem Mzondu alleged that there are a lot of “international conspiracies” militating against the realisation of the Ajaokuta dream, which, according to him, stakeholders were not ready to look in that direction.
Also, during the session, the Executive Director of the National Metallurgical Development Centre, Jos, Professor Linus Asuquo, said the sum of N718. 3 million has been proposed for capital as seven projects have been earmarked for execution.
Professor Asuquo solicited more funds to address some shortfalls, outsourcing of some services, as well as carry out its key objective of research and development.
Similarly, the Sole Administrator of the National Iron Ore Mining Company Limited, Itakpe, Kogi State, Mr Augustus Nkechika, decried the N60 million allocation to the company for overhead expenditure.
He said the company sits on tens of thousands of acres of land, does a lot of mining prospecting with a view to discovering more areas of mineral deposits for explorations.
The committee, however, adopted his presentation and asked him to expect its feedback.