The National Assembly Joint Committee on Steel Development on Thursday resolved to investigate the payment of $496m by the federal government to an Indian firm, which failed to revitalize the Itakpe Iron Ore Company after three years.
The Global Infrastructure Holding Ltd. (GIHL) took over the National Iron Ore Mining Company (NIOMCO), Itakpe, Kogi State in 2016 and got its agreement terminated in 2019 due to non-performance.
GIHL dragged the federal government to court over breach of contract and it was awarded damages to the tune of $496m which had been paid.
The Minister of Steel Development, Shuaibu Abubakar Audu, told lawmakers that the concession was terminated because the concessionaire was not living up to expectations.
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The minister spoke during the ministry’s 2024 budget defence session at the National Assembly.
He said, “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 a settlement was reached.
“The federal government paid $496m to the Indian firm for breach of agreement.”
He, however, said President Bola Tinubu had asked him to revive the two steel firms in Itakpe and Ajaokuta.
Audu’s submissions infuriated a member of the Committee, Senator Natasha Akpoti Uduaghan who queried the rationale for paying N1.5bn annually to the staff of a firm that had been concessioned.
Akpoti Uduaghan also wondered why the termination of the agreement was done in private without the public being aware of it.
The committee there resolved to hold a public hearing to probe the concession agreement at a later date.
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