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FG moves to probe coy’s N33bn electricity debt
By Egena Sunday Ode
Resuscitating the moribund Ajaokuta Steel Company will cost between $2 to $5 billion, while restarting only the light steel section of the mill is estimated to cost N35 billion (about $80 million).
Minister of Steel Development, Shuaibu Audu, revealed this on Thursday after a closed-door meeting with President Bola Tinubu at the Aso Rock Presidential Villa, Abuja.
The minister also hinted of moves by the federal government to investigate accumulated N33 billion in electricity debt which caused the Transmission Company of Nigeria (TCN) to disconnect the moribund company from the national grid.
The TCN had announced its decision this week 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.
Reacting to the development in a chat with correspondents, the minister affirmed that the issue will be clearly looked at to get to the bottom of it.
He wondered why the company will accumulate such debt in electricity consumption when it had not been in operating in full capacity.
He said: “I mean these are some of the things that there needs to be clearly looked into. Like 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 consumption of 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.
Noting the role of NBET in the disconnection, Shuaibu hinted that government will that 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, 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 to 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.
“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 support of stakeholders, we need support of everyone to be able to do this difficult job.
“This job is not a job that myself and Mr. President can do alone. We need the support of everyone including the electricity company.”
The minister, however, provided updates on government’s plans to revive the long-abandoned Ajaokuta steel project.
According to Audu, President Tinubu had approved fundraising locally to restart and rebuild the light steel mill.
He said this mill can produce about 400,000 tons of iron rods out of the seven million tons needed for the federal roads construction project.
He said “The second agenda for discussion with Mr President was that Mr President gave me approval towards the end of last year to raise some money to restart and rebuild the light steel mill of the Ajaokuta Steel Plant to be able to produce iron rods, which iron rods would be taken by the Ministry of works.
“The Minister of Works, Senator David Umahi, has already written a letter to me through his ministry, guaranteeing that they will be off-takers in the iron rods that are being produced.
“The president under the Renewed Hope Agenda, which the Minister of Works is driving plans to construct about 30,000 kilometres of roads across Nigeria, where they will need about 7 million metric tons of iron road. We can produce about 400,000 tons of those iron rods in Ajaokuta if we’re able to restart the steel plant.”
The minister lamented that resolving the company’s problems overnight was impossible given that the plant had been dormant for 45 years.
