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Govt rejects out-of-court settlement with Ajaokuta Steel concessionaire

By on October 20, 2011

The Federal Government has rejected an out-of-court settlement of its dispute with Global Infrastructure Holdings Limited (GHIL) over the cancellation of the concession of Ajaokuta Steel Company Limited (ASCON).

The Minister of Mines and Steel Development, Musa Sada, said the government would see the case through, adding that it would not withdraw from a case with an investor who he alleged cannibalised the assets of the steel company and breached  the terms of the concession agreement.
He, however, said  the government and GHIL that was purported to have bought  the entity are in arbitration. He said both parties met last month and are to meet again in January next year.

The meeting, he explained, “will enable Nigeria to present its counter claim,” saying, “we have already articulated our position on the issues and hope that the matter will be amicably resolved soon.”

On  government’s plan for the firm and the Nigeria Iron Ore Mining Company (NIOMCO),  he said since the government does not want to repeat past mistakes, it has raised an economic team to carry out a study on what to do with the two entities.
He said, the team headed by the Co-ordinator of the Economy, Dr. Ngozi Okonjo- Iweala, is to study the possible scale of return from the plants.

His words: “The government wants to transform the place. As I am talking to you, there is a study of economic rate of return on the two facilities. I think it is about to be concluded very soon. It is being co-ordinated by the Minister of  the Economy because it is not a technical thing. It is strictly business.

“ All the factors will be put into consideration, as we don’t want a situation whereby a private investor will come and look at it and say I can operate it. No. We want professional managers to contact professional engineers, get the input from them and get their report so we know this is their direction. So, we will be able to advise the government on the various available options, between concession, outright sale or joint venture. This is where we are now.”

On the control of explosives, Sada said the ministry and stakeholders have agreed that explosive dealers and directors of user companies will be thoroughly screened before licences are issued.