Economy

‘Fraction of Ajaokuta Steel capacity capable of producing 600,000mtpa’

by OWEDE AGBAJILEKE, Abuja

June 18, 2016 | 8:41 am
  |     |     |   Start Conversation

Sole administrator, Ajaokuta Iron and Steel Complex, Joseph Isah, has said one of the 43 plants installed in the complex was capable of producing 600,000 metric tons of steel annually (mtpa), even as the quantity could cover a 10,000-kilometre of rail network across the country.

Isah, who stated this at a public hearing organised by the Senate Committee on Privatisation on Thursday, said the company required N80 billion to put the plant in use at full capacity.

The multi-billion dollar steel complex was initiated by the first civilian President of Nigeria, Shehu Shagari, but later abandoned by the past administrations for over two decades.

He said 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 Light Mill Section of the plant, which would require N43 billion to become functional, could produce 400,000 tons of steel per annum at full capacity, he said.

The administrator also said that with an investment of the N43 billion, the plant could generate an average annual income of N80 billion.

He added that the thermal plant of the firm, which has installed capacity of 110 megawatts of electricity, required N5 billion to become fully operational and would generate N18.7 billion yearly.

He also said 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 also debunked insinuations that the heavy equipment installed in the sprawling edifice was obsolete, insisting that they could never be outdated.

He 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.

His words: “About $513 million 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 N23 trillion worth of steel products had been imported into Nigeria in nine years whereas $513 million is needed to complete the project. Total investment for the entire project is $4.6 billion.”

Chairman of the Senate Committee on Privatisation, Ben Murray-Bruce, commended the former President Shehu Shagari 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 $80 billion.

He said 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 $40m to produce the raw materials it needed.

Bruce expressed disappointment that the successive governments could abandon the projects and blamed previous administrations and governments as being behind the rot and abandonment.

The lawmaker pledged that his committee would meet with Vice President Yemi Osinbajo to find lasting solution to the problem to ensure the company work again, since it could be operational even without subventions from the Federal Government.


by OWEDE AGBAJILEKE, Abuja

June 18, 2016 | 8:41 am
  |     |     |   Start Conversation

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