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ISPAT, LIKE SOLGAS? By Emeka Oraetoka With the current Macabre dance between Federal Government and SOLGAS, at the international chamber of commerce, London, Nigerians should not be surprised if at the end of the day, we are told that government has paid N414 billion to SOLGAS as penalty or compensation for the termination of the concession agreement, or that government spent the same amount as legal fee because ISPAT appears to be an extension of SOLGAS as it appears there was no fresh agreement between ISPAT and Federal Government - lamentation of a Nigerian who felt that due process was not followed in the new concession agreement if any, between Federal Government and ISPAT. When in the year 2003, the Federal Government signed an agreement with SOLGAS, an American Energy Company to resuscitate, complete, commission and operate the Ajeokuta Steel Company, on what could be termed ‘Complete Operate and Transfer [COT]’ basis, for 10 years, Nigerians heaved a sigh of relief that the much sought after technological breakthrough was in the offing. Report had it that SOLGAS as it were then, claimed it had about three billion dollars [3B] it hoped to invest into Ajeokuta, which is about ninety percent (90%) completion. The concession agreement between Federal Government and SOLGAS attracted wide condemnation in Nigeria, particularly from experts in steel sector. They claimed that SOLGAS has no technical and financial base to finance and manage Ajeokuta. Many thought that critics of SOLGAS were just out to rubbish government efforts at ensuring the sanitization of the economy. Distinguished Senator Kanti Bello came down heavily on SOLGAS as mediocre. In the end, energy experts openly commended his forthrightness. With allegations of theft of government properties in Ajaokuta almost becoming an embarrassment to Nigeria, National Assembly, constitutionally empowered to carry out oversight functions, decided to probe the activities of SOLGAS. The power and steel committee in the senate, led by Distinguished Senator Arthur Nzeribe, and other relevant committees swung into action as regards the probe of SOLGAS in Ajaokuta. Report had it that these committees in their determined e fforts at ensuring a comprehensive investigation, went as far as Europe, America and to confirm the claims of SOLGAS. In the final analysis, these committees discovered that the claims of SOLGAS were both fraudulent and misleading. In the end, the senate promptly indicted SOLGAS, and recommended that Federal Government should take steps to bring those responsible for the looting of government properties in Ajaokuta to book. Till date, Federal Government has not convicted anybody in connection with Ajaokuta fraud.. Although government revoked it contract agreement with SOLGAS. Government however, entered into fresh agreement with ISPAT, an Indian company, said to be expert in steel sector. With the current legal battle in London court between Federal Government and SOLGAS over the termination of concession agreement, the stage appears set for either loss of scarce financial resources through legal fees or payment of compensation arising from the termination of the contract by Federal Government should SOLGAS wins. Experts are of the view that some government officials may have encouraged SOLGAS to seek this legal redress. They argued that the curious introduction of ISPAT by the executive Vice Chairman, Mr Seun Oyefeso of SOLGAS to government and probably without new concession agreement smacked of shady deal. Experts are further surprised at the manner in which Global Infrastructure Nigerian Limited, a subsidiary of ISPAT, said to belong to a gilded Nigerian(s), bought up Delta Steel Company Plc. It may be recalled that BUA International Limited had emerged as the highest bidder when the bids were officially opened on Friday, June 18, 2004, on ly to see their efforts evaporated when National Council of Privatization (NCP), the body that oversees the activities of BPE withheld its approval of the bid on the excuse that what was offered was too low, and sought to review the bid offer upwards. Reports had it that in the end, approval was finally granted to BUA, upon upward review of its bid from 20.5 to 25 million dollars. In a rather surprising manner, Global Infrastructure appeared from the blues and offered the BPE 30 million dollars to take over the Delta Steel plant, with only 10% of the sum which amounted to 3 million dollars to be paid immediately. According to the agreement, the remaining balance of 27 million dollars was to be spread over a period of 2 - 5 years. It therefore follows that though Global Infrastructure offered more than BUA, over a long term, it was offering significantly less in the short run because while BUA was to pay 10% now, it must pay the balance sum in 90 days. The questions now are: will, would be investors and the whole world by these extremely favourable terms granted to ISPAT not feel sufficiently unsecured that the privatization exercise can easily be compromised whimsically in favour of a particular investor? Could due process and level playing field for everyone be ever guaranteed in view of this obviously not too clean transaction? The claim by government as reported in the Guardian of Monday, March 28, 2005 in the ongoing legal tussle that "it was embarrassed by SOLGAS, action because it was executive Vice-Chairman, Mr. Seun Oyefeso that introduced ISPAT of India to it", appeared to have lent credence to the belief by experts that indeed, ISPAT is owned by gilded Nigerian(s), probably in Government. Another vexed problem associated with ISPAT agreement with Federal Government, according to experts is lack of information concerning the quantum of money this company is ready to invest into Ajaokuta steel company limited (ASCL). If it is still the original sum SOLGAS promised to inject, how much of it has been brought in, so far. It has been reasoned that very soon, the story of ISPAT and Global Infrastructure could just be like that of SOLGAS, time will tell. Emeka Oraetoka Information Management & Media Relation Consultant Wrote in from Garki - Abuja. Send instant messages to your online friends
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