FG needs $513m to complete Ajaokuta Steel - Sole Administrator

The Sole Administrator of Ajaokuta Steel Company Limited, Isah Onobe­re, yesterday, disclosed that the Feder­al Government would require an estimated sum of $513 million to complete the multi-billion naira project that has suffered de­cades of abandonment.
He specifically pointed out that one of the 43 plants installed in the complex was ca­pable of producing 600, 000 tonnes of steel annually and that the quantity could cover a 10, 000 kilometres of rail network across the country.

Onobere, who made this revelation yes­terday at a public hearing organised by the Senate Committee on Privatisation, noted that the company requires N80bn to put the plant in use at full capacity.
He explained that the firm would put to­gether a business plan to the Federal Gov­ernment to accommodate it in the Memo­randum of Understanding recently signed with the Chinese government on the con­struction of two major rail tracks across the country.
The Sole Administrator noted that the light mill section of the plant, which would require N43bn to become functional, could produce 400, 000 tonnes of steel per annum at full capacity.
He also said that with an investment of the N43bn, the plant could generate an average annual income of N80bn.
He added that the thermal plant of the firm which has installed capacity of 110 megawatts of electricity, requires N5bn to become fully operational and would gener­ate N18.7bn annually.
Onobere further noted that the electrici­ty that would be produced by the firm could power the entire 43 plants in the complex when fully operational and also supply pow­er to three states including Kogi.
He debunked Insinuations that the heavy equipment installed in the sprawling edifice was obsolete, insisting that they can never be outdated.
Onobere described the complex as the bedrock of Nigeria’s development, and that the government must be careful in con­cessioning it because any attempt to do so, would amount to selling out scraps.
He said: “About $ 513m was required to complete Ajaokuta project. This place is the bedrock of Nigeria’s development. The first phase of the project has reached 98 percent completion but was abandoned in 1994.

 “For 22 years, there was no new inputs, and N23trn worth of steel products had been imported into Nigeria in nine years whereas $513m is needed to complete the project. Total investment for the entire project is $4.6bn.”
Responding, the Chairman, Senate Committee on Privatisa­tion, Senator Ben Murray - Bruce, applauded former President She­hu Shagari’s administration for the foresight in establishing the sprawling complex, which accord­ing to him, could industrialise Ni­geria, overnight.
He advised the Federal Govern­ment to involve the Ajaokuta Steel firm in its negotiations with the Chinese government which was expected to construct 8, 000 kilo­metres of rail network in the coun­try, at the cost of $80bn.
The lawmaker noted what the government needed to do was to tell the Chinese government that the steel needed for the entire proj­ect could be produced in Ajaoku­ta and that the firm require about $40million to produce the raw ma­terials it needed.
Bruce expressed disappoint­ment with successive governments for abandoning the projects and blamed previous administrations as being behind the rot in the steel industry.
The chairman disclosed that his committee would meet with Vice President, Yomi Osinbajo to find lasting solution to the problem to ensure that the company comes alive again since it could be oper­ational even without subventions from the federal government.
He added, “After spending about $5bn, it does not make any sense to abandon the plant. The govern­ment should have had a plan. We are disappointed that successive governments after Shagari aban­doned the project.”