The Federal Government hinted on Thursday that it will investigate why the moribund Ajaokuta Steel Company Limited accumulated N33 billion in electricity debt, which caused the Transmission Company of Nigeria (TCN) to disconnect the company from the national grid.
This is because the government has stated that the revival of Ajaokuta Steel is not something that should be done overnight.
The Minister of Steel Development, Shuaibu Audu, disclosed this to State House correspondents after meeting with President Bola Tinubu at the Presidential Villa, Abuja.
Recall that the TCN recently made the decision to disconnect the steel company over the debt owed to the Nigerian Bulk Electricity Trading PLC (NBET) and service providers.
The debt is made up of N33,071,002,129.49, comprising N30,849,749,981.01 for energy and capacity delivered by NBET and N2,221,252,148.48 owed to service providers.
Fielding questions from journalists, the minister said that the issue will be looked at to get to the bottom of it.
He wondered why the company would accumulate such debt on electricity consumption when it had not been operating at full capacity.
According to him, “I mean, these are some of the things that need to be looked into. As you mentioned, One of the things I spoke to the MD of Ajaokuta today, and this was one of the questions I asked, and we’re going to get to the bottom of it: why consume so much electricity in a place that is not operating at full capacity?
“Part of what we also need to do is that we’re trying to revive Ajaokuta in a collegiate system, in piecemeal, and so we may not have the capacity to be able to pay all those outstanding amounts immediately.
“Part of what the MD of Ajaokuta told me is that most of the money is in interest payments. And NBET, the electricity company that has disconnected it, is also a government agency.”
Noting the role of NBET in the disconnection, Shuaibu hinted that the government will not allow its agency to hinder the effort to revive the steel company, which has not been in operation for about 45 years.
“So, if we, as a government ministry and government agency, are trying to revive Ajaokuta, working hard to do that, we should not have another hand within the same government, making things very difficult for us.
“And so, part of what we plan to do is sit down on the table in the next few days as quickly as possible to be able to come up with a plan so that they can put it back on the grid and put things back in order.
“It is a gradual process. Ajaokuta cannot be revived overnight. This is an institution; this is a plant that has not been working for 45 years. It is a difficult task to try and get it back on track.
“So, we need the support of the entire government apparatus; we need the support of stakeholders; we need the support of everyone to be able to do this difficult job.
“This job is not one that I and Mr. President can do alone. We need the support of everyone, including the electricity company, to be able to help us get this project back on track so that we can create the hundreds of thousands of jobs I want to create for Nigerians.”
The Steel Development Minister also revealed that his ministry has received President Tinubu’s go-ahead to raise a committee to look for an appropriate site to set up a new steel plant in the country.
He recalled that the decision to establish the $5 billion plant was reached between the President and Jindal Steel of India on the sidelines of the last G20 summit.
Shuaibu said that representatives of Jindal Steel will be in the country soon, adding: “So, I briefed Mr. President, and I’ve met with representatives of Jindal Steel, and they’re very serious about their commitment.
“And we’re currently looking for land that is close to a gas station that has a port and is close to natural or mineral resources such as, you know, iron ore and the likes to be able to get them the ideal location.
Either they set up a greenfield or they acquire an existing plant, such as, you know, the Delta steel plant.
“So, those are the things on the table. Mr. President has given us the go-ahead to set up a committee with some very critical stakeholders within the government, including the likes of the minister of finance, the CME, the Minister of Trade and Investments, the Minister of Defense, the Minister of Solid Minerals, and myself, to be able to get this thing running and get it off the ground.
“So, the Renewed Hope Agenda is here to stay. We think that if we’re able to complete all these projects that have been approved by Mr. President, we should be able to include the revival of Ajaokuta and create not less than 500,000 jobs, bringing billions of dollars into the economy.”
