The Joint Committee of the Senate and the House of Representatives on Steel Development has resolved to probe the $496million paid by the Federal Government to Global Infrastructure Holding Ltd (GIHL).
GHL, an Indian firm, failed to revitalise the Itakpe Iron Ore Company after three years of signing the deal.
It had taken over the National Iron Ore Mining Company (NIOMCO), Itakpe, Kogi State, in 2016 and got its agreement terminated in 2019 due to alleged non-performance.
However, GIHL sued the government for not keeping to the terms of the contract and was awarded damages to the tune of $496 million, a sum which was paid.
The matter was revisited in Abuja on Thursday when the Minister of Steel Development, Shuaibu Audu, came before the joint committee to defend the 2024 budget of the ministry.
According to the minister, the concession was discontinued because the concessionaire was unable to execute the terms.
Audu stated, “The firm was supposed to be producing iron ore and transfer it to Ajaokuta for steel development but it was busy exporting the commodity.
“Before the exit of the last administration, the federal government went through litigation and settlement was reached.
“The federal government paid $496m to the Indian firm for breach of agreement.”
The minister further informed the committee that President Bola Tinubu had given him the mandate to revive the two steel firms in Itakpe and Ajaokuta.
“Historically, iron ore used to be produced in Itakpe. They have a lot of staff that were producing iron ore. Some of the production line in Ajaokuta were also working.
“We are still paying the staff there because the agreement has been terminated”, he added.
Reacting to the minister’s presentation, Senator Natasha Akpoti-Uduaghan (Kogi State), asked the justification for paying N1.5bn annually to the employees of a firm that had been concessioned by the government.
She sought to know why the termination of the agreement was done in private without the public being aware of the process..
The senator said, “The Indian firm could not perform, they denied Nigerians access to the iron ore company for three years.
“Instead of them being penalised, for depriving Nigeria its social and economic growth, we compensated them further by paying them $469m.
“This committee would like to see the court papers that penalised Nigeria.
“Mr Chairman, let us concentrate on the budget defence now and organise a public hearing on it later.
“This is because we cannot continue to enrich some people at the detriment of our dear country.”
Her motion was adopted at the session by the committee after other officials of the ministry also confirmed that the salaries of the workers at the firms, totalling about N1.5bn annually, were being paid by the federal government during the three-year period the concession lasted.
The co-Chairman of the committee, Dr Zainab Gimba, and other members adopted the resolution to probe the deal.
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