• Thursday, March 28, 2024
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Reps halt planned audit, concessioning of Ajaokuta Steel complex

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Nigeria’s House of Representatives has called on President Muhammadu Buhari to stop Kayode Fayemi, Minister of Mines and Steel, from proceeding further with concessioning processes of Ajaokuta Steel Complex, pending a review ordered by the House of Representatives.

The lawmakers accused the Minister of Steel of breaching due process in the appointment of auditor for the Ajaokuta Steel Company Limited.

The Lower Chamber via a resolution passed during Thursday’s plenary, resolved to set up an Ad-hoc Committee to inquire into the nature of the conflict of interest that may have arisen on account of the Minister of Mines and Steel “appointing a firm, Greenwhich Trust Ltd, headed by wife of his political mentor to serve as Transaction Adviser for Ajaokuta, without due process.”

The resolution was passed following the adoption of a motion titled: ‘Urgent need to investigate the circumstances under which the Federal Ministry of Mines and Steel engaged the globally discredited PricewaterhouseCoopers (PwC) to audit Ajaokuta Steel Complex for purposes of concessioning,’ sponsored by Ahmed Yerima and 24 other lawmakers, emphasised the need for President Buhari to act in the “interest of the national economy and the anti-corruption fight of the Buhari Government.”

Yerima, chairman, House Committee on Privatisation and Commercialisation who led the debate, frowned at the process leading to the proposed concessioning of the facility after an ongoing audit, queried the rationale behind the appointment of PricewaterhouseCoopers which was sanctioned for various audit infractions in UK, Brazil, India and other countries.

“The House is aware that the Minister of Mines and Steel Development,  Kayode Fayemi recently announced, and it was widely published, that Ajaokuta Steel Company will be concessioned after an ongoing audit.

“The House is further aware that the audit of Ajaokuta Steel Company is being undertaken by PricewaterhouseCoopers, a globally discredited firm, having been sanctioned in India, with a 2 year audit ban for infractions of over $1 billion USD; sanctioned in Brazil for which it paid $50 million USD as fine; fined in the United Kingdom for £5.1 million, the largest ever sanction imposed by the UK Regulator; paid $225 million USD and $25 million USD respectively as fines to TYCO shareholders in the U.S and Bank of Tokyo – Mitsubishi, where it was implicated for money laundering for Iran, Sudan, and Myanmar, blacklisted for roles in terrorism and human rights abuses; among other infractions and irregularities in their operations, which has left its reputation in tatters.

“The House is concerned by the allegation that PricewaterhouseCoopers was informally engaged by Global Steel to assist and advise them on how to recover Ajaokuta Steel Company and National Iron Ore Company, (NIOMCO) Itakpe from the Federal Government of Nigeria in 2012 at the onset of negotiations.

“The House is worried by the apparent actions of the Minister of Mines and Steel Development in engaging a company whose antecedents may suggest that they are being engaged to audit and prepare reports which may skew the outcome thereof in a preconceived manner, in favour of parties which the Minister may have lined up or which may represent the interests of their former clients (GINL).

“The House is also concerned that the Bureau of Public Enterprises and the Infrastructure Concession Regulatory Commission, both mandated by law under the Infrastructure Concession Regulatory Commission (Establishment, etc.) Act, 2005 and the Public Enterprises (Privatisation and Commercialisation) Act 2004, respectively, has not been involved or engaged in the audit and concessioning process adopted by the Minister of Mines and Steel Development.

“The House is outraged that the Hon Minister of Mines and Steel, Kayode Fayemi, also appointed as Ajaokuta transaction Adviser, Greenwich Trust Ltd, headed by the wife of his political mentor, without the input of BPE and ICRC, and turned around to discard other options suggested by the company other than concessioning.

“The House is disturbed by the insistence and presumptive posture of the Minister of Mines and Steel Development, Hon Kayode Fayemi, to concession Ajaokuta Steel Company to an apparently pre-determined Company, because of his claim that reputable Companies have lined up as Concessionnaires, despite the failure of two previous concession attempts in 2003 to SOLGAS Energy of USA and in 2004 to Global Infrastructure Nigeria Ltd (GINL), an Indian Company.

“The House is alarmed that the Hon. Minister, Mines and Steel claimed that government cannot spend a kobo more on Ajaokuta Steel Complex when he is already spending N2 billion for the Concessioning process and in the context of a situation where Nigeria spends over $3.5 billion USD on importation of steel related products annually.

“The House is also worried that almost two years since NIOMCO, Itakpe was again handed over to Global Steel in the so called modified concession agreement for a 7 year period with an option of a further 10 years, the plant which is integrated with Ajaokuta Steel Complex has remained moribund, which signposts the likely failure of yet another Concession,” he said.

To this end, the House mandated the Ad-hoc Committee on Ajaokuta Steel Complex to include the urgent consideration of the possibility of a Bill for an Act to provide for the completion of Ajaokuta Steel Company and prohibit the concessioning thereof prior to its completion.