The National Assembly is poised to investigate the $496 million disbursed by the federal government to an Indian company, which, over three years, failed to rejuvenate the Itakpe Iron Ore Company. The inquiry surfaced during a session of the Joint Committee on Steel Development at the National Assembly.
In 2016, Global Infrastructure Holding Ltd. (GIHL) took charge of the National Iron Ore Mining Company (NIOMCO) in Itakpe, Kogi State. However, due to non-performance, the agreement was terminated in 2019. Subsequently, GIHL pursued legal action against the federal government for contract breach, leading to a $496 million damages award, which has been paid.
The Minister of Steel Development, Shuaibu Abubakar Audu, addressed the committee, stating that the concession was terminated due to the concessionaire’s failure to meet expectations. President Bola Tinubu has instructed him to revive the two steel firms in Itakpe and Ajaokuta.
Audu revealed, “Historically, iron ore used to be produced in Itakpe. They had a lot of staff producing iron ore, and some production lines in Ajaokuta were operational. We are still paying the staff because the agreement has been terminated.”
This revelation irked Senator Natasha Akpoti-Uduaghan, a committee member, who questioned the rationale behind annually paying N1.5 billion to the staff of a concessioned firm. She also criticized the private termination of the agreement and demanded details of any penalties imposed on the Indian firm for breaching the agreement.
Akpoti-Uduaghan emphasised, “The Indian firm could not perform, denying Nigerians access to the iron ore company for three years. Instead of penalizing them, we compensated them further by paying $469 million.”
Officials confirmed that the federal government covered the salaries of the firms’ workers, amounting to about N1.5 billion annually, during the three-year concession period.
Committee co-chair Dr. Zainab Gimba agreed with Akpoti-Uduaghan’s concerns. Consequently, the committee resolved to conduct a public hearing at a later date to scrutinise the concession agreement.