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FG terminates concessioning of Ajaokuta Steel Coy, NIOMP

Posted by By LUCKY NWANKWERE, Abuja on 2008/04/05 | Views: 546 |

FG terminates concessioning of Ajaokuta Steel Coy, NIOMP


The Federal Government has cancelled with immediate effect the concessioning of the Ajaokuta Steel Company and the National Iron Ore Mining Company, Itakpe, both in Kogi State, to Global Infrastructure Holdings (Nigeria) Limited (GIHL), citing breaches of the concessionary agreements by the Indian firm.

…As Yar’Adua orders prosecution of indicted officials, others

The Federal Government has cancelled with immediate effect the concessioning of the Ajaokuta Steel Company and the National Iron Ore Mining Company, Itakpe, both in Kogi State, to Global Infrastructure Holdings (Nigeria) Limited (GIHL), citing breaches of the concessionary agreements by the Indian firm.

The Federal Executive Council which met in Abuja yesterday under the chairmanship of President Umaru Yar’Adua, took the decision after considering the report of the administrative panel of inquiry, established by the Yar’Adua administration, to review the concession agreements.

In a statement at the end of the meeting, signed by presidential spokesman, Mr. Olusegun Adeniyi, government said the concessionary agreements, which the firm entered into with the Obasanjo administration, “were largely skewed in favour of the concessionaire to the detriment of the Federal Government of Nigeria.”

It accused the GIHL of non- compliance with the agreements, agreeing with the panel that whatever benefits that might have accrued to the government and people of Nigeria from the implementation of the agreements were thwarted by breaches and ‘unwholesome’ practices by the firm.
Accordingly, President Yar’Adua, after reviewing the Economic and Financial Crimes Commission’s (EFCC) interim report on the concessioning/sale of ASCL, NIOMCO and the Delta Steel Company, immediately ordered the criminal prosecution of indicted Federal Government’s officials and promoters of GIHL for asset stripping.

The administrative panel of inquiry, according to Adeniyi, had indicted GIHL for breaches of the concessionary agreements, including failure to submit a workable business plan within the specified timeframe, non-payment of concessionary fees, as well as the cannibalization and exportation of plants and equipment.

In deciding to rescind the agreements, government, he explained, also noted that the purported Share Sales Purchase Agreement (SSPA) between it and GIHL in respect of ASCL was technically not in force because the transfer of shares to the purchase was never effected.
Putting the summary of statutory obligations outstanding against GIHL at N350 million, he said the panel also discovered that instead of investing external funds on the completion of both projects as expected, GIHL embarked on massive borrowing from local commercial banks, pledging the assets of the Delta Steel Company as collateral.

“The panel reported that GIHL currently owes the banks about $192 million. The general impression is that GIHL has been diminishing the values of ASCL and NIOMCO to buoy up their fortunes,” the presidential spokesman said.
Meanwhile, interim managements will be established by the Federal Government for the Ajaokuta Steel Company and the National Iron Ore Mining Company pending the determination of all issues arising from the termination of the concession agreements with GIHL.

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Comments (3)

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Okfold(Sobe, Edo, Nigeria)says...

I want the meaning of female owan name Ekeke (Edo state)

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Toluwalase Samuel Olufemi(Ijebu, Ogun, Nigeria)says...

Authority belongs to God, once He decrees it is final and binding

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Ikponmwosa Osamede(Edo, Nigeria)says...

Your meaning of Osamede is wrong. Osamede means God has given me a crown