Concessioning Of Itakpe, Ajaokuta: Mines Workers Warn Against Repeat Of Past Mistakes
The Nigeria Union of Mines Workers (NUMW) has queried the haste adopted by the outgoing administration in trying to concession Ajaokuta Steel Plant and National Iron Ore Mining Company, Itakpe, even it begged President Muhammadu Buhari to intervene fast before his good name is tarnished in the process.
The union warns that the two firms may end up worse off and become subject to another round of litigation which cost Nigeria N400 million in settlement fine.
In a statement signed by the national president of NUMW, Comrade Hamza Mohammad, and made available to journalists yesterday, the mines workers’ union expressed concern that the government is about to make the same mistake as in 2003 with a shoddy attempt to privatise the Ajaokuta Steel Plant, the consequences of which have dogged the firm since then.
NUMW is reacting to the recent newspaper advertorial by the federal government, through the Ministry of Mines and Steel Development and the Infrastructure Concession Regulatory Commission (ICRC), inviting bids from organisations interested in investing and managing the Ajaokuta Steel Plant and the National Iron Ore Mining Company, Itakpe, Kogi State, on a public, private, partnership model.
The union said: “While we are not in any way against private investments in the steel sector, we will not hesitate to draw the attention of the federal government and indeed Nigerians that the rush and speed of the process might end up putting the two companies back into the same mess that President Muhammadu Buhari tried hard to bring them out.”
NUMW recalled that in a rush to inject private hands in the Ajaokuta Steel Plant and National Iron Ore Mining Company, Itakpe, the federal government had in 2003 hurriedly signed a 10-year concession agreement with Solgas Energy of USA.
“This concession only lasted a little more than one year, with Solgas throwing in the towel due to lack of capacity.
“In 2005, another 10-year concession agreement was hurriedly entered into with Global Steel Holdings owned by Mr. Pramod Mittal without any due diligence by the relevant government agencies. The concession agreements were solely handled and messed up by the same Ministry of Mines and Steel Development with unverified claims that it was a directive from the then President Obasanjo.”
The Union recalled that, following a government enquiry, the late President Umaru Yar-Adua terminated the second concession agreement, with the triple actions of hurried privatisation, lack of due diligence and the actions of the Yar’Adua government resulting in Nigeria paying over $400 million to GINL as an out of court settlement through a process that lasted 15 years.
The mines workers’ union expressed worry that Nigeria seems to be treading the same path again with the current efforts, and this time around the processes are not only haphazard but against the laws of the Federal Republic of Nigeria.
Condemning the haste in the process, the union observed Section 68 of the Finance Act 2020 states that advertisements for parastatals and ministerial tenders should not be less than four weeks from the date of publication if the process is within the thresh-hold of the Ministry. If, however, it would require the consideration and approval of the Federal Executive Council, the timeline is six weeks.
It went on: “We want to put it on record that this very process falls within the threshold of the six weeks proviso and not four weeks contemplated in the advertisement. This violation of the extant rules and Laws of the Federation is therefore a recipe for future litigations.”
The union queried the rationale for the haste in the concessioning process.
The union also declared that the union members are critical stakeholders in the process and they would not accept for the concessioning process to be carried out without carrying them along.
“We have no objection to any privatisation or PPP arrangement the government will go into, but we are concerned and have objection to the haphazard way the process is being handled by the Ministry of Mines and Steel Development. What is worth doing is worth doing well,” it said, adding that due process must be observed in the process.