Russian Builders Of Ajaokuta Steel Offer To Complete Project

The Russian company that designed and built the now moribund Ajaokuta Steel Company Ltd (ASCL) about two decades ago has recently written to the federal government, indicating its willingness to return and complete the project so that the multibillion naira investment can commence production.

But it seems the federal government, which has not responded to the letter yet, is not very keen about the Russian firm’s offer to return and make the rusted company work again.

Russian TyazhpromExport, a steel industry construction company established in the late 1950s, had after the June 4, 1976 bilateral agreements signed by Nigeria and Russia, on the development of the former’s iron deposit, sealed a contract (047/04100) for the construction of a steel plant with the capacity of producing 1.3 million tonnes of steel per year.

With the contract signed, the Russian company, as it could be recalled, deployed 1,000 Russian experts and 3,500 Nigerian workers to carry out the construction exercise that was completed up to 98 per cent by October 1993. Specifically, of the 482 Units that make up the entire ASCL, 476 of them were commissioned, including three rolling mills, TPS-TBS, repair and service shops that were all put into operation.

After that feat, the steel company was abandoned and left to rot away for years. And when the federal government made the move to revive the company in 2002, the same Russian company was invited to carry out an assessment audit of what needed to be done to revive it, but the effort was later stalled when government decided in 2005 to give the company on concession to one Global Infrastructure Holdings Ltd. That agreement, too, was later said to have been cancelled in 2008.

Since then, there has been no clear-cut direction for ASCL, and the prospective money-spinner continued to rot away.

With the coming of the new government and its obvious body language to diversify the economy, one of which is to revive ASCL, the original builders, TyazhPromExport, which happened to have kept an eye on the unfortunate development of its brainchild, has again written to the government of Nigeria through the Federal Ministry of Solid Minerals Development about its readiness to make the steel company functional.

In its letter dated December 12, 2015, a copy of which was made available to LEADERSHIP, the Russian company said it did not “want to believe that Ajaokuta cannot be viable if money is spent on it”.

The officials of the Russian company said if made to work again, Ajaokuta would play a major role in President Muhammadu Buhari’s agenda on poverty eradication.

However, the Federal Ministry of Solid Minerals Development had not responded to this letter at the time of filing this report.

When contacted by LEADERSHIP to comment on the letter written to his ministry by TPE, the minister of state for Solid Mineral Development, Abubakar Bawa Bwari, acknowledged the said missive but he quickly pointed out that the Russian company was not the only one interested in rehabilitating Ajaokouta.

He spoke to our reporter on phone: “In fact, more than seven companies have presented several proposals, letters and presentations, showing their interest to complete the Ajaokuta Steel Company Ltd.

“We are being very careful not to make any mistakes and are waiting till we are able to vet all proposals before the technical team and also involve the government of their countries to certify the companies before sitting down to discuss with the firms. This time around we want to be very careful but we are willing to associate and discuss with those interested in completing the steel complex.”

He lamented that “so much had been spent for the revival of plant with nothing commensurate coming out of it.”

“The federal government spends N4 billion annually to maintain the steel plants and its workers, but we cannot continue with that,” he said.

The minister said that it was the present administration’s intention that before the expiration of its tenure, half or the whole of Ajaokuta Steel firm will be working.

“It is our intention that if Ajaokuta won’t work, at least half of it will begin to work. It can generate power and it is our intention that before the end of our tenure, half or the whole of AJSC will be working.”

Reacting to this development, a non-governmental organisation with interest on investment, Builders Hub Impact Investment Programme, said it was aware of the letter by the Russian company to the Federal Ministry of Solid Mineral Development, because it (Builders Hub) reached out to TyazhPromExport (TPE) Russia in good faith when it discovered the firm’s genuine interest to work with Nigeria in completing Ajaokuta.

“They said that they wrote several times to the Nigerian government over the years but there was response,” said Natasha Akpoti, of Builders Hub Impact Investment Programme.

“TPE said that it would be its greatest desire to fulfil a dream it shared with Nigeria many years ago. TPE is a world giant in steel plant construction and has a lot of past and present projects all over the world. TPE built India’s largest steel plants on the same technology that Ajaokuta has, which is the blast furnace. TPE was recently contacted by the Indian government to undertake the reconstruction and modernization of Roulkella Steel, which is one of the country’s largest steel amongst others,” she said.