House to Remove Ajaokuta Plant from Schedule of Privatisation Act

• We have not contracted transaction adviser, says Fayemi

Iyobosa Uwugiaren and James Emejo in Abuja

The House of Representatives thursday overwhelmingly passed a motion to initiate a bill to amend the Privatisation Act and delete Ajaokuta Steel Company from the schedule of the Act as well as remove the powers of the National Council on Privatisation to amend an Act passed by the National Assembly.

It further declared the steel sector a major sector of the economy and urged the Senate to concur in line with Section 16 of the Constitution.

The resolution of the lower chamber followed a motion sponsored by Hon. Ahmed Yerima and 24 other members of the House on the urgent need to investigate the circumstances under which the Federal Ministry of Mines and Steel engaged the globally discredited PricewaterhouseCoopers (PwC) to Audit Ajaokuta Steel Complex for purposes of concessioning.

The House further expanded the mandate of its Ad-hoc Committee on Ajaokuta to determine whether or not there is peculiar interest of the Minister of Mines and Steel, Mr. Kayode Fayemi, in the appointment of Greenwhich Trust Limited headed by the wife of his political mentor to serve as Transaction Adviser for the Steel complex without due process.

Also, for the umpteenth time, the green chamber urged President Muhammadu Buhari to stop Fayemi from proceeding further with the concessioning processes of Ajaokuta pending a review ordered by a resolution of the House in the interest of the national economy and the anti- corruption fight of the present administration.

The development indicated an escalation of the feud between the minister and the lower chamber over the former’s planned concessioning of Ajaokuta, a move which lawmakers oppose- preferring that government completes the plant instead, given that past concessioning arrangements had failed.

Fayemi in a recent interview, vowed to proceed with the concessioning programme, claiming that the House has been carried along from the onset and even approved appropriations for the concessioning.

The classification of the steel sector as a critical economic sector followed arguments that key sectors of the economy including power, petroleum among others must be controlled by the federal government rather than individuals as the constitution stipulates.

The lawmakers said given the security concerns around the steel industry- capability to manufacture weapons among others- the sector should be managed by government.

The declaration would in effect, forbid any form of privatisation as it is in the current instance with Ajaokuta.
However, Yerima, while leading the debate on the subject matter noted that Fayemi had recently announced that Ajaokuta would be concessioned after an ongoing audit.

He raised concern that the steel plant was being audited by PricewaterhouseCoopers (PwC), which he described as a globally discredited firm having been sanctioned in India, with a two-year audit ban for infractions of over $1 billion and sanctioned in Brazil for which it paid $50million as fine.

He added that the audit firm had also been fined in the United Kingdom for £5.1 million, the largest ever sanction imposed by the UK regulator; Paid $225 million and $25 million respectively as fines to TYCO shareholders in the US and Bank of Tokyo – Mitsubishi, where it was implicated for money laundering for Iran, Sudan, and Myanmar as well as blacklisted for roles in terrorism and human rights abuses; among other infractions and irregularities in their operations, which has left its reputation in tatters.

Yerima further expressed worry over the allegation that PricewaterhouseCoopers was informally engaged by Global Steel to assist and advise them on how to recover Ajaokuta and National Iron Ore Company, (NIOMCO) Itakpe from the federal government in 2012 at the onset of negotiations.

He noted that the apparent actions of the Minister of Mines and Steel Development in engaging a company whose antecedents might suggest that they are being engaged to audit and prepare reports which might skew the outcome thereof in a preconceived manner in favour of parties which the minister might have lined up or which may represent the interests of their former clients (GINL) raised further concerns.

Among other things, he raised concerns that the Bureau of Public Enterprises (BPE) and the Infrastructure Concession Regulatory Commission (ICRC) both mandated by law under the Infrastructure Concession Regulatory Commission (Establishment, etc.) Act, 2005 and the Public Enterprises (Privatisation and Commercialisation) Act 2004, respectively had not been involved or engaged in the audit and concessioning process adopted by the minister.
However, Fayemi has said the ministry has not contracted any transaction adviser for the concession of the Ajaokuta Steel Company as wrongly asserted by the House.

Reacting to the House’s debate yesterday in a statement signed by his Media Adviser, Mr. Olayinka Oyebode, the minister said the process for the appointment of a transaction adviser was on, but cannot be completed until it gets the approval of the Federal Executive Council (FEC).

According to the statement, “The attention of Fayemi, and the Minister of State for Mines and Steel Development, Hon. Abubakar Bawa Bwari, has been drawn to the debate by members of the House on the Ajaokuta Steel Complex, where the House adopted a resolution to stop the planned concession of the steel company.
“While the ministers are convinced the honourabe members mean well as patriots concerned about an important national asset, it is also a fact that they have grossly misunderstood the ministers and other stakeholders working with the Ministry on this exercise.

‘“In view of this and the need to set the record straight for the sake of the public and the investing community, it is important to state as follows: The ministry has not spent a dime from the N2,096,500 appropriated by the House for the concession of Ajaokuta Steel Company (in the 2017 Appropriation Law).’’