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Ajaokuta’s Audit Report: End Of A Long Weary Journey?



The report of an audit carried out by a team of local experts to ascertain the state of The Ajaokuta Steel Complex (ASC) recently presented by the management of the company to the minister of state for mines and steel development, Abubakar Bawa-Bwari , indicated that the complex was 95 per cent ready and requires $653million to commence operations. ALEX ENEMANNA reports.

Much earlier this year, the ministry of mines and steel directed that the audit be carried out, leading to the setting up of an audit committee by the management of Ajaokuta Steel Company. The committee, according to the sole administrator/CEO of the company, Sumaila Abdul-Akaba, who presented the report to the minister, comprises experts and other stakeholders from critical sectors.
Having invested so heavily in the Ajaokuta Steel Complex project for roughly 40 years without result actually got some well-meaning Nigerians worried. Barely two months after the face-off between the national assembly and the federal government over the ownership status of the Ajaokuta Steel Mill, the report came, affirming that the complex still remains a property of the federal government.
Receiving the report of the audit which was carried out at the instance of the ministry to ascertain the state of the Ajaokuta Steel Complex at the ministry’s headquarters in Abuja, the minister described it as a milestone in the effort to complete and put the steel mill to work.
The minister, who expressed profound joy at the report put together largely by a team of local engineering experts said he was not only happy that this report was out, but that it was put together by local engineers instead of the usual practice of calling foreigners to come and do it, a trend he said the government was bent on changing.

“This is a milestone, considering the attention that has been generated by the Ajaokuta Steel Plant. Today, we now know where we are, what is missing and what need to be done. “Am happy to announce that our power plant in the complex that is being test run will soon add to the national grid of electricity, because what we need for Ajaokuta is just 40MW, while the plant is capable of producing 110mw. So is a milestone in our roadmap. We can now tell what Ajaokuta is worth. If we are going in for concessioning, partnership or whatever, we know the exact value.

“This time we want to avoid past mistakes. We will be observing due diligence in all our steps, and we have to involve transaction advisers, so that mistakes of the past is not repeated.
“When Ajaokuta was being built, most of our universities of technology were not there; and now we have them, some for over 20 years. So it saddens me when I hear professionals suggest that we call foreigners for something that can be done by locals. I believe today, we are setting a good example on how our own can be used,” he said.
According to the report, the Ajaokuta Steel Complex (ASC) which has generated a lot of concern in recent times was 95 per cent ready, while the fund required to complete and make it operational is estimated at $653 million.
The sole administrator/CEO, Sumaila Abdul-Akaba, made this known while presenting the report to the minister.
He said, “The level of readiness of Ajoakuta now as regards the internal infrastructure is 95.7 per cent, while the estimated cost of completing it has been put at $653 million. The amount did not cover external facilities, but the internal infrastructure-the steel equipment, rail and plants.
“What has happened differently is that a lot of vandalisation in terms of underground cables and some transformers has taken place in Ajaokuta. People want to steal some parts to go and sell.
“We also have the conveying belt that runs into kilometers, which are worn and bad due to long time exposure to adverse weather conditions.
“We also looked at the rail track internally and all the shoulders are wood which can last for just about 10years. What people use is concrete and not wood any more. So there is need to look into that.”
He said the leadership of the ministry commissioned the management of Ajaokuta in February with the mandate to carry out the audit to ascertain the state of the plants and the machineries.
“From our audit, the financial analysis made put the amount required to full revive the plant is $652million. It covers some essential upgrade as well as replacement of over 3, 000 rotten woods. That sum is not a contract some but an estimate to cover only the steel equipment and machineries; no external infrastructure.
Ajaokuta steel project, started in 1979 by the Soviet Union under a cooperation agreement with Nigeria, is located on 24,000 hectares of sprawling green-field land-mass. The plant itself is built on 800-hectares of land. The chosen technology for steel production is the time-tested Blast-Furnace – Basic Oxygen Furnace route for Steel Production.
The Ajaokuta integrated steel complex was conceived and steadily developed with the vision of erecting a Metallurgical Process Plant cum Engineering Complex with other auxiliaries and facilities.
The complex is meant to be used to generate important upstream and downstream industrial and economic activities that are critical to the diversification of Nigeria’s economy into an industrial one. However, it has never produced any steel, and it is non-operational to date.