Global Infrastructure to return to Ajaokuta, Itakpe

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Global Infrastructure to return to Ajaokuta, Itakpe

The Federal Government seems to have made a U-turn and is planning to go back to the controversial concession agreement and reinstate Global Infrastructure Holdings Limited (GIHL), the Indian firm in Ajaokuta Steel Company and Iron Ore and Mining, Itakpe, both in Kogi State. This development, which seems to show Federal Government's confused state on how to resolve the lingering crisis on the revocation of the concession agreement with the Indian firm, BusinessDay learnt would have been effected if Michael Aondoakaa, special duties minister, still remained the attorney-general and justice minister.While in office as the AGF, correspondences to the effect has gone round to concerned parties informing that the Federal Government would revisit agreements with GIHL and fine tune the contract to favour both sides. The return of GIHL is part of the outcome of the out-of-court settlement adopted by the two parties owing to the huge judgement cost which was still high after arbitration. The Federal Government had in 2008 revoked the concession agreements with GIHL, citing asset stripping and failure of the group to comply with the major provisions of the agreement. This became subject of litigation at the instance of the group; with a judgement debt hanging over the Federal Government which sources informed is still outstanding. "The return of GIHL seems to be government's way out of the logjam because government cannot pay the judgement cost which runs into millions of dollars. Government cannot also sell both Ajaokuta Steel and the Iron Ore and Mining Company in Itakpe without settling the issue of GIHL. So this is the problem", said a source from the presidency. The government further faces a dilemma on what to do with the Ajaokuta staffers that have not been paid since last August. Since the cancellation of the concession agreement, the government is said to have so far spent about N5.6 billion on salaries alone. The Interim Monitoring Committee (IMC) for the management of the steel company and National Iron Ore Mining Company had last year requested from authorities N600 million to at least start running some equipment in the company which would mean the facility would be operational in some capacity and thus be able to raise some money to cover salaries. This sum was to be raised by selling some of the obsolete paraphernalia in the company. However, as at this March, the committee has been able to raise only about N40 million. The Federal Government revoked the GIHL concession agreements after reviewing them and noted that they "were largely skewed in favour of the concessionaire to the detriment of the Federal Government of Nigeria".  Ironically, inside sources informed that the former concessionaire's (SOLGAS) agreements, and that of the GIHL were identical and yet the monitoring committee set up to oversee the implementation of the SOLGAS concession never raised alarm over any loopholes when the same document was still used in the case of GIHL.

Source: Businessday :: News you can trust

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