FEC: FG to rehabilitate Ajaokuta steel company with N853mn ahead of concession process

The Federal Executive Council (FEC) meeting presided by President Muhammadu Buhari on Wednesday, approved a contract sum of N853 million to effect major repairs and operation of the Ajaokuta Steel Company and the National Iron Ore Complex, Itakpe, both in Kogi State.

Beyond the Itakpe steel, FEC also approved contracts worth N10.48 billion and $27.09 million respectively for the Federal Ministry of Power, as part of efforts to boost the nation’s power sector.

Minister of Information and Culture, Lai Mohammed, who reported on the approval granted by the Council for the Ajaokuta and Itakpe companies, said the contract, worth N853.25 million, is meant to appoint contractors that would run the process of concessionning the companies.

Mohammed, who spoke on behalf of his colleague in charge of the Ministry of Mines and Steel Development, Olamilekan Adegbite, said the Council’s decision was in response to one of the two memoranda presented by the Federal Ministry of Mines and Steel Development.

“Council approved the engagement of transaction advisors for consultancy services for the concession of Ajaokuta Steel Company Limited and also the National Iron ore mining complex in Itakpe in favour of MSRS CPCS Transform Consortium in the sum of N853,266, 644.4 inclusive of 7.5percent VAT.

“I am sure we are all familiar with the story of the history of the Ajaokuta Steel complex. The contract was awarded in 1979 to a Russian company called TPE. By the end of 1983, the contract had reached an advanced stage, regrettably, since then it has been suffering and by 1994, TPE demobilized from the site and in 1996, the contract was determined.

“Subsequently, various administrations have tried to revive the Ajaokuta steel complex without much success. However, you will recall that Mr. President was on a state visit to Russia on the 22nd and 24th of October 2019 and here it was resolved that the Ajaokuta steel complex which the Federal Government has made a massive investment must be resuscitated.

“Regrettably COVID-19 has slowed down the efforts of the ministry of mines to bring this to fruition. However, today, the council has approved the award of the contract not just for Ajaokuta but for the iron ore in Itakpe.

“We believe that with this development, we would have made a significant step in bringing back to life both the Ajaokuta and the iron ore company in Etakpe and move forward the industrial revolution of Nigeria because when these two complexes begin to function, then, not only are we going to save money in terms of foreign exchange, but we are going to see a lot of industrial development and also technology transfer”, he said.