Leke Salaudeen: The Nation
The Ajaokuta Steel Company
has refused to fly, despite the billions sunk into it by the Federal government
no thanks to policy’s inconsistency, writes Assistant Editor (Investigation)
LEKE SALAUDEEN
DESPITE
the several billions of the tax payers, money sunk into the Ajaokuta Steel
Company Limited (ASCL), the the multi-billion naira investment remains a white
elephant project till date; no thanks to the inconsistency in government
policies.
All
efforts made at resuscitating the steel complex ended up breeding new problems.
If there is anything working in the firm, it is corruption, either in the form
of graft, or outright looting by individuals. Any company and government
officials that ever had anything to do with the mill have sour tales to
tell.
Today,
the complex is like a graveyard. Everything is at a standstill. The premises of
the company is a shadow of its old self as the few employees left behind render
only skeletal administrative services.
The
factory is at best moribund.
In
2008, an Interim Management Committee (IMC) was set up to oversee it. The panel
came into being after a committee set up by the former President, the late
Alhaji Umaru Yar'Adua indicted the technical partner - Messrs Global
Infrastructure Limited of incompetence and withdrew the concession given to
them by the former President Olusegun Obasanjo to operate was subsequently
withdrawn.
But
four years into its operations, the IMC remained a lame duck, with nothing to
show since it was established.
It
was learnt that an attempt by the IMC to stamp its authority was rebuffed when
its request for N650 million to run the mill was allegedly turned down by the
supervising Ministry of Miners and Steel Development, a move that dampened the
morale and enthusiasm of committee members.
The ministry
allegedly distanced itself from the committee because it did not have an input
to its constitution.
A
ministry source said: "Their function is not clear. At one time, the
committee requested for grants to run the mill which never materialised."
It
was alleged that the N650 million released by the presidency to resuscitate the
refurbished units of both ASCL and National Iron Ore Mining Company (NIOCO) was
never received by the IMC. But the management denied recieving such
funds.
The
source recalled the former minister of Mines and Steel Development, Mrs.
Diezani Alison-Madueke was specific on how to disburse the fund, when she
announced its release by the presidency in 2010.
Mrs.Alison-Madueke
allegedly said the resuscitation exercise would cover a portion of the Thermal
Power Plant, the Light Section rolling Mill, the Wire Rod Mill, the Engineering
Workshops at ASCL and the Bergeud Plant as well as minimal mining operations and
processing at the NIOMCO.
At
the receiving end of the bureaucracy, the employees have been crying foul,
alleging the IMC of incompetence, misappropriation and embezzlement of their
salaries and allowances by using the old salary structure as against the
Consolidated Research and Allied Institute Salary Structure (CONRAISS), approved
by the Federal Government as the new salary structure for steel workers with
effect from January 2010.
The
National Vice President of the Steel and Engineering Workers Union (SEWU) Mr
Salami Jimoh said despite the approval, the IMC continued to pay the workers
with the old scale.
The
source said: "The monthly salary of ASCL and NIOMCO workers are being
computed and released on monthly basis from the Budget Office as approved by
the government.
"But
in defiance to this provision, the IMC insisted on paying with the old salary
structure, leaving a monthly balance of N100 million in the kitty of the
management in Ajaokuta alone, while NIOMCO is over N30 million monthly. This
means that a total of over N2.5 billion has been diverted in the two companies
from January 2010 till date.”
The
workers also complained of non-payment of medical allowances, cancellation of
five per cent leave grant, double deduction and non-remittance of contributory
pension scheme and non-remittance of over N5 million cooperative deductions.
The
bubble burst recently when some workers held hostage IMC Chairman Mr. Philip
Umunakwe and the coordinator of administration for 12 hours.
But
the management in turn accused the workers of trying to coerce it to pay the
enhanced salary scale, noting the action was traumatic experience for the two
IMC top shots.
Reacting
to the allegation, Umunakwe dismissed the workers claims.
He
told The Nation "The allegations are baseless and made out of ignorance
of the realities on ground".
The
management in a statement explained its frustrations in its crusade for
budgetary allocation for the mills.
It
said: "In 2009, a proposal for the operation of the mills was submitted to
the ministry by the IMC. The ministry after thorough examinations of the submission
engaged the services of Messers Accenture who certified that with N650 million,
the Wire Rod Mill, Light Section Mill, Engineering works and Metallurgical
Training Centre could be put into operation.
"This
position was an interim plan to engage the over 5,000 workforce in ASCL/NIOMCO
pending the Federal Government's decision on the way forward.
"The
then minister of Mines and Steel Development informed Nigerians that Mr.
President had graciously approved N650 million to ASCL. Till date, no kobo has
been released out of this sum to the IMC.
"The
IMC has struggled to reverse the zero budgetary allocations to the companies
since 2008 except for personnel cost.
"It
has prepared, submitted and defended budgetary proposals for ASCL/NIOMCO both
at the Senate and House of Representatives Committees on Steel for 2009, 2010
and 2011 financial years without success.
"It
is important to state categorically that the IMC flatly refutes any allegation
of fraud, misappropriation and misdemeanour as alleged."
Despite
the government's refusal to provide the N650 million lifeline, it has allocated
N4.6 billion in this year's budget for salaries of over 5,000 employees on the
payroll of the comatose Ajaokuta Steel Company. Similarly, the National Iron
Ore Mining Company was allocated N1.9 billion to be expended on payment of
wincers’ salaries.
Minister
of Mines and Steel Development Mohammed Sada explained why the company has not
been reactivated. He said even if it was reactivated, it could not run without
raw materials.
"If
we are talking of reacting to Ajaokuta Steel Company, we have to start from the
mines. This is why the iron ore mining by the Nigerian Iron Ore Mining Company,
Itakpe is crucial, it is the starting point. We have to make sure that they are
working and that the equipments are there to produce iron ore.
"But
if you say every machine, every switch is fit and fiddle and ready to start
production in Ajaokuta and you don't have the raw materials to run it, then it
won't work. Some of the major problems of the complex have to do with raw
materials.
"If
we are talking about steel production, mines department has an input to make
and they must tell us the condition of the mines.
"Those
are the issues we have to solve. I know that sometime this year, we made effort
to see that at least the raw materials for the production of steel are
acquired. We have started doing something to make sure we are not confronted
with problems of importation and funding.”
According
to the minister, the management has been directed to begin the process of
developing a road map that would take the mining sector to the next level.
Stressing
government's determination to develop the mining sector, Sada said henceforth,
there would be no discriminatory policies in the sector because regulations had
been put in place to guide it.
A
member of the House of Representatives Committee on Steel Development, Mr.
Austin Ogbaburhon, said about N80 billion would be required to
resuscitate the ailing steel complex if Nigeria is determined to emerge as one
of the world's best economies by the year 2020.
Ogbaburhon
said the issue was discussed exhaustively when the House Committee was
considering appropriation for the steel sector.
He
said: “It's quite good that we have a workable steel complex in this
country; any developing country like Nigeria that tries to be in the league of
world's best economies by the year 2020 needs the steel industry to achieve
such feat; the importance of steel development cannot be over-emphasised.
"Ajaokuta
is not dead but there is no activity going on there right now. To put Ajaokuta
on stream, the money is huge-close to N80 billion. A major part of the steel
complex is completed. Less than 20 per cent is yet to be fixed; most of the
parts are obsolete.
"Being the only
surviving steel complex owned by the government in the country, Ajaokuta
deserves all the attention and all hands should be on deck to bring it back on stream"