The National Assembly is poised to investigate the $496 million payment made by the Federal Government to an Indian firm that fell short of revitalizing the Itakpe Iron Ore Company over a three-year period.
This matter surfaced during a session of the Joint Committee on Steel Development in the National Assembly yesterday
In 2016, Global Infrastructure Holding Ltd. (GIHL) assumed control of the National Iron Ore Mining Company (NIOMCO) in Itakpe, Kogi State. However, due to non-performance, GIHL had its agreement terminated in 2019.
Following the termination, GIHL pursued legal action against the Federal Government, alleging a breach of contract. Subsequently, the court awarded damages amounting to $496 million, which has already been disbursed.
The debacle surrounding the unsuccessful concession agreement took center stage on Thursday during a visit by the Minister of Steel Development, Shuaibu Abubakar Audu, and officials from his ministry to the National Assembly. They were there to present and defend the 2024 budget for the Ministry of Steel Development.
Audu told the panel that the concession was terminated because the concessionaire was not living up to expectations.
He said, “The firm was supposed to be producing iron ore and transfer it to Ajaokuta for steel development but it was busy exporting the commodity.
“Before the exit of the last administration, the Federal Government went through litigation and settlement was reached.
“The federal government paid $496m to the Indian firm for breach of agreement.”
He, however, said President Bola Tinubu had asked him to revive the two steel Firms in Itakpe and Ajaokuta.
Audu said, “Historically, iron ore used to be produced in Itakpe. They had a lot of staff that were producing iron ore. Some of the production lines in Ajaokuta were also working.
“We are still paying the staff there because the agreement has been terminated”
Audu’s submissions infuriated a member of the Committee, Senator Natasha Akpoti Uduaghan, who queried the rationale for paying N1.5bn annually to the staff of a firm that had been concessioned.
Akpoti Uduaghan also wondered why the termination of the agreement was done in private without the public being aware of it.
She also asked whether there was a penalty for the breach of agreement by the Indian firm, because it was on the wrong side of the law.
She demanded details of the litigation and urged the committee to probe the entire concessioned deal.
She said, “The Indian firm could not perform, they denied Nigerians access to the iron ore company for three years.
“Instead of them being penalised for depriving Nigeria, it’s social and economic growth, we compensated them further by paying them $469m.
“This committee would like to see the court papers that penalised Nigeria.
“Mr. Chairman (of the Committee) let us concentrate on the budget defence now and organise a public hearing on it later.
“This is because we cannot continue to enrich some people at the detriment of our dear country.”
Officials of the ministry, who accompanied the minister to the budget defence session, also confirmed that the salaries of the workers at the firms, amounting to about N1.5bn annually, were being paid by the federal government during the three years of the concession.
The co-chair of the committee, Dr. Zainab Gimba, agreed with the submission of Akpoti Uduaghan.
The committee there resolved to hold a public hearing to probe the concession agreement at a later date.
