A legislation that seeks to inject $1 billion for the completion of Ajaokuta Steel Company Limited from the Excess Crude Account (ECA) has scaled second reading on the floor of the House of Representatives.
The $1 billion, according to Section 2(a-c) of the proposed bill, is to be drawn from “Excess Crude Revenue and “all monies from time to time appropriated and authorised to be paid into the Fund,” as well as “all loans or grants from time to time made to Nigeria for the purposes of completing the Ajaokuta Steel company.”
According to one of the experts who spoke at the sectoral debate on Ajaokuta Steel project, Anthony Madagua, Nigeria has the capacity to produce 12.2mt/year of steel by year 2020 out of which Ajaokuta Steel is to produce 5.2mt yearly, as encapsulated in the Vision 2020 economic blueprint, which projects that Nigeria will join the league of industrialised nations by 2020 and reduce importation of $4 billion worth of steel on yearly basis.
Madagua also said about $1.4 billion was required for the completion of the first phase of Ajaokuta plant of 1.3 million tons of liquid steel per year, adding that the thermal power plant had the capacity of generating 110mw of electricity.
On his part, Hussaini Abdulrahaman, chairman, Total Steel Limited, expressed concerned over the $5.7 billion assets tied down for over 30 years.
According to Abdulrahaman, “The opportunity cost of the non performance of Ajaokuta Steel company is best imagined of we judge it against a similar plant that was commissioned in time, had a project cost and investment payback of 10 years and subsequently earned profits of 10% of investment every year for 20 years, for the investor (in our own case Federal Government of Nigeria) and cumulative and investible profits of $11.4 billion (enough to build 20 more steel plants of 1.5m TPA).”
The experts’ presentations and recent working visit of speaker Yakubu Dogara led to the House resolve to initiate the “bill for an Act to provide for the Ajaokuta steel company completion fund for the speedy completion of the project and for other related matters,” sponsored by Uzoma Nkem-Abonta and 300 other lawmakers.
Section 3 of the bill also provides that the monies in the Fund shall be applied by the Minister only for the purpose of: construction, improvement, extension, enlargement and replacement of infrastructure and works, including the provision, acquisition, improvement and replacement of other capital assets (like vehicles, vessels, machinery, instruments and equipment) required in respect of or in connection with the completion of the Ajaokuta Steel company project; the acquisition of land and of any right or interest in or over land and in respect of the use of invention; carry on of any survey,” among others.
Section 4 of the bill also stipulates that the disbursement of the fund shall be applied by the Minister in accordance with rules made under section 23 of the Finance (Control & Management) Act.
Section 5 further provides that “the proceeds of any loans which have been raised under any written law which have not been spent before the commencement of this bill, may, notwithstanding any provision to the contrary in any such law, be directed by a resolution of National Assembly to be paid into the Fund and to be applicable only to all or any of the purpose of the Fund in accordance with the provisions of this bill.”
The proponent of the bill however provided for window through which the company can be concessioned in section 7: “the Ajaokuta Steel Company shall be concessioned under the provisions of the policy on privatisation or any written law provided that the project is completed and is seen to have begun production at a very significant stage (50%).
In the bid to ensure compliance, the lawmakers provides sanction for any public or political office holders who breached the provisions of the bill in section 8: “Except as otherwise provided in this bill, a person who contravenes the provisions under this bill shall commit an offence and on conviction be liable to imprisonment for a term of six months or to a fine of up to N1 million or both.
Section 9 of the bill also provides that the “bill shall remain in force up until the completion of the Ajaokuta Steel company project, on such a date so declared by the President.”
Also at plenary, the House passed a “bill for an Act to amend the Public Enterprise (Privatisation and Commercialisation) Act to review the list of enterprises to be privatised,” through second reading.
The bill, which was sponsored by Nkem Abonta (Abuja-PDP) and 300 others, seeks to delete the Ajaokuta Steel Company from the list of enterprises to be commercialised.
Leading the debate, Abonta said the amendment was necessary because a bill seeking to provide funds for the completion of the steel company was already on the floor of the house.
He explained that for the bill to seeking the completion of the company to achieve its aim, there was need to prevent the company commercialisation.
In his contribution, Aminu Shagari (APC-Sokoto) argued that Nigerian citizens have the right to decide which public asset should be commercialised or privatised.
He said as representatives of the people, “we want the steel company completed and not commercialised or privatised.”
After concluding the debate, Dogara referred the bill to the Committee of the Whole for further legislative actions.
