A Review of the Nigerian Energy Industry

Nigeria: Govt to offer Ajaokuta Steel for sale again

Ajaokuta Steel complex
Ajaokuta Steel complex

12 April 2015, Abuja – Director General, Bureau of Public Enterprises (BPE), Mr. Benjamin Dikki, has hinted that a new process to either privatise or concession the moribund Ajaokuta Rolling Mill would soon be undertaken by the Federal Government.

However, the fresh privatisation efforts would be determined by the outcome of an ongoing litigation at the International Court of Arbitration instituted by Global International Nigeria Limited (GINL) against the Federal Government for unlawfully abrogating a sale agreement for the management of the Steel plant without due process.

In an interview with THISDAY, the BPE boss said the Attorney General of the Federation was “diligently prosecuting and pursuing the matter so that the issue can be resolved amicably.”

He said though Ajaokuta was supposed to provide raw steel to the rolling mills to be used in the construction sector and other industries, “it has still not come on stream” for obvious challenges.

Dikki noted that already, some terms of settlement had been negotiated by the attorney general adding that “they are in the process of filling those terms of settlement as judgement of the arbitrary court.”

He said the initial concessioning of the plant had been undertaken by government officials of “who concessioned the company without taking inventory of the assets” stressing that “When things became a little difficult, BPE was approached to convert the concession into a Share-Sale Agreement. So it was turned into purchase of shares.”

The DG also argued that 65 percent of privatised companies have been so far successful noting that the balance of the 35 percent have various reasons why they were not successful including hostile operating environment as well as policies.

He also hinted that the Federal Government would this year, develop a roadmap for what to do with the refineries, the pipeline products marketing company and other subsidiaries in the Nigerian National Petroleum Corporation (NNPC).

He said: “What that means is that we would engage advisers, who would conduct a due diligence on the oil and gas sector with particular reference to the refineries, PPMC and the Nigerian gas company and from the information and collaboration with the labour unions, we will sit down and agree on a framework and the options that would be viable to handle those national assets.”

According to him, the outcome of the proposed engagement with stakeholders is expected to shape the direction on whether to concession, privatise or appoint a management consultant for the NNPC subsidiaries including refineries.

“Whatever options we have will be looked at and we would come to a definite decision as to what to do.

It is after we have come to a resolution on what to do that we would now prescribe the necessary actions and a roadmap for those assets in the oil and gas sector,” he said.
*James Emejo – Thisday

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