The Ministry of Mines and Steel Development advised Acting President Yemi Osinbajo against the recent concession of the Ajaokuta Steel Company and National Iron Ore Mining Company Limited, Itakpe to an Indian firm, Global Infrastructure Nigeria Limited, The PUNCH gathered on Monday.
In a memo dated October 13, 2015 obtained by our correspondent in Abuja on Monday, the former Permanent Secretary in the ministry, Baba Faruk, wrote Osinbajo urging the Federal Government to see through the arbitration instituted in the International Court of Arbitration in London by the GINL rather than give in to the company’s quest for out-of-court settlement.
The Permanent Secretary in the Ministry of Justice and Solicitor-General of the Federation had written Osinbajo to approve an out-of-court settlement in the legal contention for which the acting President sought the view of the Ministry of Mines and Steel Development as the supervisor of Ajaokuta and Itakpe.
In his reply with reference number MMSD/S.5/S.37/11/284, Faruk, who ran the ministry because ministers had not yet been appointed by President Muhammadu Buhari, advised the government not to deal with the Indian firm again given how it had handled Ajaokuta and Itakpe between 2004 and 2008 when the initial concession was terminated by the late President Umar Yar’Adua.
The permanent secretary said the steel industry was too important to be left in the hands of an incompetent operator. He also argued that both Ajaokuta and Itakpe should not be in the hands of separate managements as had been contemplated in the Modified Concession Agreement that had been prepared by the Ministry of Justice.
He also said that going with the MCA with the Indian firm had cost implications, which the Federal Government had not made any provision for.
In the letter, Faruk told the history of Ajaokuta and Itakpe, and detailed the reasons why the first concession agreement was terminated.
He said, “The steel industry is too strategic to be left completely in the hands of an incompetent investor to determine its fate.
“The ASCL and NIOMCO would be better managed by the same investor, public or private, in view of the strategic position of NIOMCO to the operation of the ASCL, which cannot be overemphasised as it is a captive mine to the ASCL. A situation where the companies are in separate hands will not augur well for the smooth operation of the Ajaokuta steel plant.
“NIOMCO should not be re-concessioned to the GINL as proposed in the modified NIOMCO concession agreement as this would amount to very long extension of the concession period as a result of the latter’s endless claims that may arise in view of sections 4A1(b) and (d) of the agreement.”
