podosci:

Setbacks/challenges that plagued the project from the onset have been highlighted below

- Non-development of the raw material site and Infrastructure.
One of the popular attributes of the Nigerian state is building a dam without a river. In 1973, when Iron ore of the required quantity and quality was discovered in Itakpe, a chain reaction that would lead to the development of the Ajaokuta steel company was set in motion. Even thou the Ajaokuta steel mill was started in 1979, the award of the contract for the construction of the rail line to bring the raw materials to the steel mill and to Warri, Delta state to serve the world market was not awarded until 1987. The rail line is still incomplete as of today and the contract for the completion has been awarded to the China Civil Engineering construction company.

- Non-availability of indigenous capacity to operate and manage the plant
The Ajaokuta steel plant has a highly sophisticated assemblage of 43 different plants out of which 40 are already completed. The complexity of the operations led to the involvement of foreign experts from the start.

In 1970, TYAZHPROMEXPORT (TPE), a Russian company were initially contracted to carry out a geological survey of the iron ore deposits and later to prepare the preliminary project report for the proposed Ajaokuta steel company.in 1979, TPE started the project and executed it to 98% completion in 1994.

In 2003, The Ajaokuta steel plant was conceded to Messrs SOLGAS ENERGY, an American firm on a 10-year tenure. The concession was terminated by the federal government of Nigerian due to Non-performance.

In 2005, Another concession was granted to Global Infrastructure Nigeria Limited (GINL), an India company. The contract was also revoked by the Federal Government due to Non- performance.

The history of Ajaokuta steel company is interwoven with management by foreign companies. Although the management and operation of the Ajaokuta steel plant is currently in the hands of the Nigerian Federal Government, there are already plans for another round of concessions to viable foreign companies.

- Corruption
Nigeria is plagued by a virus diagnosed as corruption. This virus as affected every sphere of the Nigeria state of which the Ajaokuta Steel company is not immune.

From an over bloated project sum to the concession of the steel company to non-viable actors. The Ajaokuta steel company has suffered heavily from the fatal illness called corruption.

Every now and then, the debate about the Ajaokuta steel debacle props up, the Nigerian National Assembly collects sitting allowance to discuss the issue, project vehicles are purchased to visit the steel company and money is allocated for the maintenance of the dilapidated steel company. All this adds to the cost of a project that as yet to be completed 40 years down the line.


Below are possible solutions to the debacle faced by the Ajaokuta steel company.

- Enter renegotiation with the original designer and builder of the steel plant (TYAZHPROMEXPORT) to complete the project.

- Critical evaluation of the state of assets in the steel company to identify those that need replacement.

- Critical Investment analysis of the Ajaokuta steel company.

- Development of indigenous capacity to operate and manage the steel plant.

- Political will to ensure completion of the project.

- Adopting the report by the Nigerian society of Engineers recommending the unbundling of the of the sector into an upstream sector
focused on raw materials and the downstream sector, a metallurgical company.


Despite consuming $10billion of public funds, it is estimated that the Ajaokuta steel company requires an additional $2billion to attain 100% completion and roll out its first sheet of steel. Until its operational, the Ajaokuta steel company would continue to be a drain in the government pockets through the allocation of funds for payment of salaries to the steelworkers and the maintenance of the non-operation steel plant. An operational Ajaokuta steel company would the backbone of the Nigerian diversification and industrialization drive, with a potential to boost the economy and provide employment opportunities for thousands of Nigerians.

WorldAmbassador:


@podosci. Thanks for your article on the Ajaokuta saga. An article by Kalu Aja regarding the Ajaokuta mess is also worth reading. After reading the article by Kalu Aja, you will weep at the corruption that bedevils our dear country. The article can be accessed here: https://nairametrics.com/why-ajaokuta-steel-company-cannot-produce-steel/