FG Okays N853m Contracts for Concessioning of Ajaokuta Steel Company, National Iron Ore Complex

•Approves N10.48bn, $27.09m to boost power supply nationwide

Deji Elumoye

The Federal Executive Council (FEC) has started the process of concessioning the Ajaokuta steel company and the Nation Iron Ore Mining Complex in Itakpe, both in Kogi State.

Owing to these, FEC approved contracts worth N853 million for the revitalisation and operation of both companies.

The Council also okayed contracts worth N10.48 billion and $27.09 million respectively for the Federal Ministry of Power, as part of the government’s effort at repositioning the nation’s power sector.

Briefing newsmen yesterday, after the weekly virtual FEC meeting, which was presided over by President Muhammadu Buhari at the State House, Abuja, the Minister of Information and Culture, Lai Mohammed, who reported the approval granted by Council for the Ajaokuta and Itakpe companies, said the contract, worth N853.25 million, were about appointing contractors that would run the process of concessionning the companies. 

Mohammed said Council’s decision was in response to one of the two memoranda presented by the Federal Ministry of Mines and Steel Development.

According to him: “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 favor of mrses CPCS Transform Consortium in the sum of N853,266, 644.4 inclusive of 7.5 per cent VAT. 

“I am sure we are all familiar with the story of the history of Ajaokuta Steel complex. The contract was awarded in 1979 to a Russian company called TPE. By the end of 1983, the contract had reached advanced stage, regrettably, since then it has been suffering and by 1994, TPE demobilised from site and 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 October 2019 and here it was resolved that Ajaokuta steel complex which the Federal Government has made 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 contract not just for Ajaokuta but for the iron ore in Itakpe. 

“We believe that with this development, we would have made 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 added: “The FEC also approved revised fees payable for Mining Engineering and Geoscientific Services, which set benchmarks for professionals in the mining sector to enable them get fair remuneration for their services.”  

FEC also approved contracts worth N10.48 billion and $27.09 million respectively for the Federal Ministry of Power for the power sector, in order to boost electricity supply across the country.

Minister of Power, Abubakar Aliyu, said the three memoranda presented to Council, including one seeking variation for an old contract, sailed through, explaining further that the approvals were for the purchase of major electricity transmission equipment.

“I presented three memos today, the first one was a variation of a subsisting contract for the Katampe to National Stadium, 132 direct circuit line which is about 90 per cent completed. 

“The contractor sought the variation because of some delays on the project. All the necessary due processes have been followed and the variation approved by FEC today is N201,949,811.00,” he added.

The Minister further disclosed that the council approved two contracts for the procurement of two sets of power transformers and the construction of a transmission line in Kebbi State.

“The second approval was for the design, manufacture and supply of two 60 MVA 132/33 KV power transformers. The cost has two components; the offshore is $1,294,447 then the onshore is N16,485,000.

“The third approval is a contract to also design, construction and installation of a 260 kilometre transmission line from Birnin-Kebbi, through Zuru to Yauri in Kebbi State. Also, the cost has two components; the offshore is $25.8 million and the onshore is N10.2 billion,” he explained.

Aliyu also expressed optimism that the Presidential Power Initiative (PPI) was on course to deliver on incremental power supply, despite the setbacks with the Siemens power deal and reported sabotage on power infrastructure.

Also briefing, Minister of Science and Technology, Ognonnaya Onu, announced FEC’s approval of Nigeria’s Revised Energy Policy (2022).

He explained that the revision of the policy became imperative to enable Nigeria take optimum advantage of all the available sources of energy in the country.

According to him, Nigeria has abundance of crude oil, fossil fuels, and variants of renewal energy (solar, hydro, wind, geothermal and biomass), in commercial quantities, and a good mix of all these will greatly improve energy supply in the country.