The Federal Government has moved to 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.
The Minister of Minister of Steel Development, Shuaibu Audu, gave this position after a meeting with President Bola Tinubu at the Presidential Villa, Abuja on Thursday.
The TCN announced the 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 would accumulate such debt in electricity consumption when it had not been operating in full capacity.
He said: “I mean these are some of the things that need to be 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.
“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, government agency are trying to revive Ajaokuta and 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 the support of stakeholders, we need the 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 to be able to help us to 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 at 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 a land that is close to a gas station that has a port and is close to the 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 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, including the likes of the Minister of trade and investments, the Minister of Defense, 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 has been approved by Mr President, we should be able to include the revival of Ajaokuta we should be able to create not less than 500,000 jobs and bring billions of dollars into the economy.”
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