Economic Confidential

Sometime in 2003, a World Bank expert observed that the bank experts had reviewed the status of ASCL and recommended among others that further investments on the steel complex could be wasteful. The country’s authority saw the World Bank’s statement as a ploy by the western world to fix the country in perpetual stagnation as regards technological developments. But in fairness, the World Bank did not totally discard the steel project without viable options for its usefulness.

It suggested that the project should be cultivated for power generations. As well, it is believed that the world powers have been working against technological breakthrough in Africa, especially Nigeria.

The Nigerian view of the concept is that if Ajaokuta should be encouraged to roll out steel, then the economy of the steel producing countries, largely in Europe, is collapsed. This international power play has informed the present deplorable status of the steel complex which was finally stalled after reaching about 98 percent completion status in 1994. It is important to explain that after the establishment of this integrated iron and steel project in 1979, the subsequent military regime had contributed immensely to its current pathetic status. The dream of the then General Olusegun Obasanjo’s administration, the Economic Confidential gathered, was to have a base for Nigeria’s industrialisation and the project was designed as an integral iron and steel complex based on the conventional blast furnace route for iron making and basic oxygen furnace for steel making. It was embarked upon as a strategic industry and a foreign exchange earner.

Apart from this, the project was conceived to generate a myriad of socio-economic benefits to Nigeria such as increase in the productive capacity of the nation through its linkage effects and supportive roles to industries. Owing to the green field location of the steel plant, the Federal Government of Nigeria in line with what obtains elsewhere in such situations considered it necessary to embark on extensive township development in Ajaokuta at the inception of the steel plant construction. Government acquired an area of land covering about 24,000 hectares, at the central portion of Kogi State (then part of Kwara State), as Ajaokuta Steel Territory. It was a virgin land before commencement of works on the project. There was no existing town within the Steel Territory hence, workers had to be commuting to and fro Okene, which is the nearest town and is more than 60 kilometres away.

As a result of the peculiarity of this situation, there was the fundamental objective to provide accommodation, infrastructural and social facilities for the employees of the steel project. Those of the new industries and commercial ventures that are expected to spring up as the outgrowth of the steel complex were also planned to be accommodated within the township. The township was planned to be developed in three phases with an eventual city population of about 600,000 persons occupying about 80,000 housing units.

The Federal Government of Nigeria is entirely responsible for the development of thee Steel Township including the associated infrastructural and social facilities. These facilities include roads and drainage network, sewage disposal system, power, water supply system, telecommunication network, schools, market, hospitals and community centres. The development of the first phase of the steel township commenced at about 1980. This phase was planned for about 10,000 housing units comprising two, three and four bedroom flats.

By the beginning of 1984, development of the steel township had virtually been brought to a grinding halt as a result of the national economic recession. Most of the outstanding works were suspended by the defunct Federal Ministry of Housing and Environment that was then responsible for the Ajaokuta Steel Township development. As of 2001, only 3,904 housing units were completed and occupied. The rest of the housing units have been abandoned at various stages of completion for more than a decade now.

Also, out of a total of about one hundred and thirty (130) Kilometres of road network and associated drainage systems planned for the first phase of the steel township development, ninety-six (96) kilometres length has been either completed or partially completed. Among the facilities in the steel township are 13,000 housing units with road networks and drainage systems, primary schools, a secondary school and a market. In addition, the Economic Confidential learnt, the project includes great magnitude of infrastructure such as the rail bridge across the River Niger, a river port, two number 330KV power lines from Benin, a dual carriage-way from Ajaokuta to Okene, gas pipelines from Oben, an airstrip at Adogo and a Metallurgical Training Centre in the project among other infrastructures. Having considered the huge amount of money expended on this project and the level of completion, the administration of Chief Olusegun Obasanjo reconsidered making the plant viable to roll out steel before 2006.

Activities on the project began with inspiration. Messrs TPE of Russia was commissioned to carry out a technical inspection of the steel plant at a total cost of $1.2 million for the purpose of ascertaining the status of the existing facilities, evaluation of the cost, implication of rehabilitating equipment, completing of the outstanding works, commissioning of the first phase of the steel plant and preparing proposals for the second third phase development of the steel plant. The technical evaluation was submitted on December 28, 2000 by TPE. Negotiation on the contract agreement and commercial offer for the completion; rehabilitation and commissioning of the first phase of the project were successfully concluded.

Not too long after this development, the World Bank advised the country against wasting resources on the project. International political intrigues and various interests threw out the Russians and a gas company, Sol Gas Energy Nigeria Limited came on board. The company was dropped as quickly as it was picked culminating in the emergence of Global Infrastructure Nigeria Limited. Despite these efforts, Ajaokuta have failed to roll out steel for the purpose of what it was established.

The drama Nigerians are watching on this seeming moribund plant keeps that suspicion alive that foreign powers are truly confronting Nigerians to stall any intended technological breakthrough in the country. No society in any clime can controvert the fact that for a nation to reckon with world record of industrialisation, such a nation should sustain pragmatic efforts at attaining technological advancement. Thus, it follows logically that developing nations such as Nigeria and other African countries should develop a strategy towards effective management of technology. More than three decades ago, Nigeria became conscious of this fact and an idea of establishing a steel manufacturing factory- the Ajaokuta Steel Company Limited (ASCL) was formed. ASCL is intended to serve as a veritable source of raw materials, spare parts and other relevant input for a host downstream sector.

It is also to promote a value chain which will put reliance on the available high grade raw materials in the country. It has the potential providing job opportunities to the teeming Nigerians youths. For instance, ASCL will require a minimum of 30,000 professionals, graduates on completion. The level of work on the steel project is estimated at more that 90per cent, which economists say forms a basis upon which Nigeria can be repositioned for the 21st century technological advancement. They observe that the project is a veritable mega foreign exchange earner, which will curb capital fight. Analysing the potentialities of the steel projects, the president of Iron and Steel Senior Staff Association of Nigeria (ISSSAN), Comrade Malik Otori, told the Economic Confidential in Lokoja that ASCL first phase was planned to produce1.3 million tonnes of steel. According to him, the first phase comprises raw materials preparation plant, coke oven and by product plants, blast furnace, steel making plant and four rolling mills. He said the auxiliary units of the steel plant included lime shop, manufacturing and repair shop complex, utility facilities such as thermal plants gas compressors and water plants. Otori therefore called on the Federal Government to act fast on how to make steel roll in ASCL to aid the nation's industrial development. “Let it be known to all Nigerians that ASCL is operated and managed largely by indigenous professionals who are trained in the art of steel making all over the world. “When the ASCL was concessioned, its operation, which generated a lot of revenue to the concessionaires, proved that the project has the potential to transform the economy of the country.

"Therefore, it is obvious that ASCL is profitable and can never be described as a white elephant project",Otori said. He urged the government to be convinced of the project's performance by which it had fabricated essential spare parts for the Nigeria National Petroleum Corporation of Nigeria which could have been imported with N2 billion but which cost ASCL to produce with N40 million. "In the same vein, ASCL also sealed an agreement with the Northern Nigerian Development Company Limited and recorded monumental success in the rehabilitation of its business outfits." “In our estimation, as the key stakeholders, the missing link is the gap that had hitherto existed in the real desire of the people of Nigeria to see the company operationalised", he noted. Otori also called on President Goodluck Jonathan and the Minister of Mines and Steel, Alhaji Musa Sada, to ensure that the aspirations of the people were met. He commended the Federal Government for the appointment of sole administrators for ASCL and the National Iron Ore Mining Company.

The union president said: “We support the government in its efforts at approving work plans that will ensure that the completed units are fully operationalised and turned to real cash serve rating venture. “We as well laud the government’s approach to appropriating fund from all legitimate and statutory means to support the accomplishment of the approved work plans". On the privatisation question, Otori said the union would not oppose a well-planned and transparent privatisation of ASCL for effectiveness. “But we firmly believe that the remaining two per cent technical portion and associated infrastructure must be completed before privatisation" he noted. He said developing the nation’s assets and promoting youth employment should be values which Nigeria should emulate in the case of ASCL, a veritable national project.