Govt considers three options for Ajaokuta Steel privatisation

Published by PUNCH, May 8, 2017.

Everest Amaefule, Abuja

The Federal Government is considering three options for the privatisation of the Ajaokuta Steel Company Limited.

This follows the submission of a report on the possible transaction routes that could be taken by the Federal Government to rehabilitate the steel complex by the transaction advisers and consultants, Greenwich Trust Limited.

The three options being considered by the government to bring back the plant to life are outright sale, concession and joint venture partnership.

The Sole Administrator, ASCL, Mr. Joseph Isah, gave the indication while speaking with journalists in Ajaokuta on Friday.

He said that it would cost about $700m to complete the plant and put it to good use; and another $663m in external infrastructure financing for the transportation of the plant’s raw materials and final products.

He said it was lamentable that Nigeria was spending about N6tn per annum on the importation of steel products, while successive governments had insisted that it could not afford the resources to rehabilitate and put the steel complex to good use.

Isah stated, “Recently, even though not adequate, government has begun to commit resources towards the maintenance and preservation of the equipment and facilities of the plant. This is pending the decision on the appropriate way forward regarding the completion, inauguration and continuous operation of the steel plant.

“To this end, the government is currently considering the report on various options on the way forward as advanced by a nominated transaction adviser concerning outright sale, concession and joint ventures.”

According to the sole administrator, at the time the Federal Government stopped funding the complex in 1994, the first phase of the project had attained 98 per cent completion.

He also state that in the year 2000, when the original contractor, TPE of Russia, audited the complex, only $400m was required to put it to good use within 24 months, but the Federal Government again failed to implement the proposal.