Business

Ajaokuta Steel Turn Around: Matters Arising

Published

8 years ago

January 22, 2016

The recent statement
from the Minister of Solid Minerals, Dr Kayode Fayemi, about the decision of the present administration to revamp the Ajaokuta Steel Company Ltd., is inspiring and promising.
Industrialists opine that the completion of the moribund plant will accelerate the desire of Nigeria to become one of the 20th economies of the world by 2020.
They recall that the idea behind a steel project in Nigeria started in 1958 when the colonial administration inaugurated a feasibility study on iron ore deposits in the country.
In 1967, a United Nations Industrial Development Organisation survey identified Nigeria as a potential steel market which led to the signing of a bilateral agreement between the defunct Soviet Union and Nigeria.
Further to this, in1971, an extra-ministerial agency — the Nigerian Steel Development Authority —was established by Decree No.9 to actualise the establishment of a steel plant in the country.
The actual work on the Ajaokuta Steel Company began in 1979 during the administration of Alhaji Shehu Shagari and as at 1983 the work on the plant had reached 95 per cent completion.
In spite of this level of completion, the plant had suffered years of neglect under successive administrations.
Although former President Olusegun Obasanjo’s conceded the plant to Global System Steel Holdings Ltd., an Indian firm, the concession failed to revive the company.
The present status of the plant notwithstanding, Fayemi said that the Buhari’s administration was passionate about the completion of the steel project.
He spoke after a fact finding tour of facilities at the company and the National Iron Ore Mining Company (NIOMCO), Itakpe, Kogi State, assuring the public that the Federal Government would soon unveil a comprehensive blueprint for the completion and rehabilitation of the two companies.
He said that the administration was taking a holistic look at the steel plant project to ensure its completion for the benefit of Nigerians.
“I want to let you know that the president is very passionate about the Ajaokuta Steel Company; we will take a look at the company holistically to make it work for the benefits of Nigerians.
“We are looking at the entire steel complex. We are not going to segment the plant. We are told that the captive power plant has been reactivated,’’ Fayemi said.
He said that government’s decision had become imperative due to dwindling fortunes of the oil sector.
According to him, the government will come up with realistic decision that will enable it to turn around as a foundation for future industrialisation of the country.
Fayemi said that government had obtained necessary information about the two companies from relevant stakeholders, noting that the facility tour was to authenticate the information.
The minister said that government was studying the experiences of steel producing countries to chart a way forward on Ajaokuta Steel Company.
“We are studying how these countries succeeded in building several plants many years after we have started our own.
“What did they do right and what we did wrong to find ourselves at the present situation; the plant will work, President Buhati is very passionate about it,’’ he said.
Irrespective of the minister’s speech, Mr Joseph Ononere, the Sole Administrator of Ajaokuta Steel Company Ltd., urged the government to call for expression of interest from experts for the rehabilitation, completion and inauguration of the steel plant.
He observed that no significant progress was made to turn around the fortunes of the company since 1994 when the Russians, being the original designers of the plant, pulled out of the project.
He pleaded with the Federal Government to ensure timely completion of the plant, saying that the minister’s visit after few months in office was a clear demonstration of government’s good intention to complete the project.
At Itakpe, NIOMCO Sole Administrator Yau Ibrahim solicited the support of the minister in the completion of some ongoing projects in the complex which he said were critical to the survival of the plant.
He stressed the need for the Federal Government to bring the case involving Ajaokuta Steel Company and NIOMCO at the Industrial Court of Arbitration in London to early conclusion.
He said that iron ore deposit at Itakpe was about 197 million tonnes which he observed would be sufficient to support production of steel at Ajaokuta Steel Company for 35 years.
“Beside the iron ore deposits at Itakpe, there is also iron ore reserve of about 60 million tonnes at Ajabanoko which is only six kilometres away from Itakpe,’’ he said.
Mr Bello Itopa, a representative of the Iron and Steel Senior Staff Association of Nigeria and Steel and Engineering Workers Union of Nigeria, pleaded with the Federal Government to act fast in revamping the company.
He said that no nation could attain economic stability and real industrial and technological advancement without massive investment in the steel sector.
To revamp the company, Mr Sanusi Mohammed, Secretary-General, African Iron and Steel Association, observed that about 1.1 billion dollars would be required.
“If the fund is released, Ajaokuta rehabilitation can be completed within three years including the external infrastructure.
“If 300 million dollars could be released from the amount required, it could be used to rehabilitate part of the company for mini production to begin,’’ he said.
He noted that 43 smaller companies with different areas of specialisation were located in Ajaokuta complex.
“If government can invest 300 million dollars for a start on Ajaokuta Steel Company, at least 25 out the 43 companies will begin operations on materials for producing cars.
“Some will produce railway steel, flat sheet and bitumen, among others. The fund generated by these 25 companies could be used to complete Ajaokuta Steel Company,’’ he said.
He recalled that the challenges facing Nigerian steel companies could be traced to lack of political will and mismanagement by the past administrations.
But Fayemi insisted that the Federal Government would not allow “international conspiracies to hinder the revamping of Ajaokuta and other steel industries in Nigeria.
“I do not want to believe that Ajaokuta cannot be viable if money is spent on it.
“International conspiracy did not stop China from becoming steel giant and India from advancing its steel industry; nothing can stop the revamping of Nigeria steel industries.
“We are the architect of our own misfortune; no international conspiracy can stop a determined nation from realising its visions and objectives’’.
He said the amount quoted to revive Ajaokuta Steel Company was exorbitant that Nigeria would need financial support to be able to produce liquid steel and other steel products.
He also said that if Nigeria began the production of steel, it would reduce foreign exchange being spent on steel importation and also create jobs locally.
He insisted that the president had saddled his ministry with the responsibility of reviving the steel industries in the country.
All in all, industrialists plead with the current administration to incorporate the original designers of the plant in its renewed efforts to revamp the company.
According to them, if the present administration revamps the steel plant, it will boost the country’s revenue.

Adamu writes for News Agency of Nigeria.

Sani Adamu

Business

Fuel Scarcity: IPMAN threatens shutdown over bridging claims

Published

23 hours ago

May 3, 2024

The Tide

The Independent Petroleum Marketers Association of Nigeria (IPMAN) Depot Chairmen Forum, has exonerated its members from the current fuel scarcity in the country.

According to IPMAN, this is caused by its inability to source petroleum products.

The IPMAN Depot Chairmen Forum also threatened to withdraw its services over non-payment of N200 billion bridging claims by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to its members, since 2022.

Alhaji Yahaya Alhassan, the Chairman, of the Forum said this while briefing newsmen in Abuja, yesterday.

Alhassan said the Nigerian National Petroleum Company Limited (NNPC Ltd.) was the sole importer of the product, but the marketers could not source products from NNPC Ltd. deport, rather from the private depots at high rate.

“We cannot buy fuel from the private depots at N950 and transport the product from Lagos to the North and other parts of the country with N2 million and still sell it at N900 or N1, 000.

“It is expedient for us to state that we are more pained by the non-availability of petroleum products in the country, which has given rise to another round of untold hardship for Nigerians.

“Contrary to claims that IPMAN members are hoarding Premium Motor Spirit (PMS) known as fuel, we would like to categorically state that PMS scarcity is wholly triggered by inability to get fuel from NNPC and not IPMAN,’’ he said.

Meanwhile, the NNPC Ltd. Chief Corporate Communications Officer, Olufemi Soneye said the disruption was due to logistical issues which had since been resolved.

“We currently have an availability of products exceeding 1.5 billion litres, which can last for at least 30 days. Unfortunately, we experienced a three-day disruption in distribution due to logistical issues, which has since been resolved.

“However, as you know, overcoming such disruptions typically requires double the amount of time to return to normal operations.

“Some folks are taking advantage of this situation to maximise profits. Thankfully, product scarcity has been minimal lately, but these folks might be exploiting the situation for unwarranted gain,’’ Soneye said.

He however, said the lines would clear out soon.

On the non-payment of bridging claims, the IPMAN forum said it was distressed and depressed by the laidback attitude of the NMDPRA towards the survival its member’s businesses, arising from its refusal in paying the claims.

“It is with deep frustration that we have assembled here today as the IPMAN Depot Chairmen Forum. It is also disheartening to note that some of our members have completely shut down businesses and retrenched employees.

“As businessmen and women, our members acquired bank loans to keep their fuel retail outlets running on a daily basis across the nooks and crannies of Nigeria in order to serve the teeming population of Nigerians,’’ Alhassan said.

He recalled that Sen. Heineken Lokpobiri, Minister of State Petroleum Resources (Oil), at a stakeholders meeting in February mandated the NMDPRA management to clear the entire debt in 40 days.

“However, today, we have crossed the 40 days’ time lapse given to the NMDPRA to clear the debt, and it is shameful to state that only the paltry sum of N13 billion has been paid, ignoring minister’s directive.

“We are not happy with the indiscriminate increment in the issuance and renewal of Sales and Storage Licence, by the NMDPRA, and the subsequent delays in acquiring the licence, which our members are recently subjected to.

“We are also calling on President Bola Tinubu to look into this unwholesome figure which is highly detrimental to our business and reverse it forthwith, as it is bound to impact negatively on the masses.

“We are poised to take far reaching decisions that may cripple the supply and sales of petroleum products across Nigeria if our demands are not met within the shortest period of time.

“We are collectively prepared to withdraw our services, shut down every single outlet, and suspend lifting of products forthwith till our demands are fully met, and the consequences will be terrible.

“We call on our members to however remain resolute and law abiding, even as we draw close to the immediate ultimatum for our demands to be met by the NMDPRA,’’ the chairman said.

Reacting to the IPMAN’s claims, the Acting Head, Corporate Communications, NMDPRA, Seiyefa Osanebi said the bridging claims payment was ongoing.

“The bridging claims payment is always an ongoing process,” she said.

Maritime

Shippers’ Council Registers 160 Port Operators

Published

5 days ago

April 29, 2024

The Tide

The Nigerian Shippers Council (NSC) says it has registered 160 Port stakeholders into its Regulated Port Service Provider and Users platform since the initiative began in 2023.
Executive Secretary, NSC, Mr Pius Akutah, made the disclosure on the sideline of a sensitisation programme by the commission for port operators in Lagos, with the theme, “Regulated Port Service Provider and Users”.
Represented by the Director, Consumer Affairs, Chief Cajetan Agu, Akutah emphasised the significance of the programme for stakeholders.
He said the sensitisation programme was the second edition after its commencement during the last quarter of 2023.
The Secretary said the 160 registered port operators consist of agencies, terminal operators, shipping companies, individual port users as well as service providers.
“We invited the ports stakeholders for enlightening them on the processes for online registration of Regulated Port Service Provider and Users.
“We have demonstrated to them how to register and how to make payment and we were able to present before them the various categories of the registration.
“The rate of payment is also in the registration. The payment of each group depends on the operation. A shipper pays N30,000, terminal operators and shipping companies pay N300,000, truckers also pay N30,000, while some pay N50,000 and N100,000.
“The Council was able to intimate them on the benefits, because port users benefit more as we help to interface on reducing port charges from time to time”, Akutah said.
He said that there was a need to continue to work with port operators to stop delays and eliminate high costs to make the port efficient.
Also speaking, the Deputy Director, Stakeholders, Service, NSC, Mr Celestine Akujobi, said “the sensitisation exercise was important for the council to enable us bring all the port stakeholders together”.
According to him, this is to avoid challenges during the implementation of the council’s responsibilities.
“By the time we introduce sanctions on defaulters, no operators will complain that he or she is not aware of the registration.
“I’m happy with the turnout of this sensitisation. This shows that the operators are well informed of the statutory friction of the council as the port regulator.
“The final implementation will commence as soon as we discover that all the operators have keyed into the portal.
“We are engaging other ports across the country and we’re hopeful that before the last quater of 2024, the council will implement sanctions on defaulting operators”, Akujobi said.
Earlier, Vice Chairman, National Association of Government Approved Freight Forwards (NAGAFF), Dr Ifeanyi Emoh, said port challenges were enormous, adding that they originated from some of the government agencies.

Emoh urged the council to look into regulating other government agencies, so that there could be a window through which they can collect port charges collectively instead of indiscriminately.

By: Chinedu Wosu