Home / Business / Itakpe Iron Ore Concession: NASS to Probe $496m Payment to Indian Firm

Itakpe Iron Ore Concession: NASS to Probe $496m Payment to Indian Firm

Sunday Aborisade in Abuja

The National Assembly Joint Committee on Steel Development on Thursday passed a resolution to probe the $496m paid by the federal government to an Indian firm that 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 for breach of contract and it was awarded damages to the tune of $496m which had been paid.

The failed concession agreement came to the fore on Thursday when the Minister of Steel Development, Shuaibu Abubakar Audu, led officials of his ministry to the National Assembly to defend his 2024 budget.

Audu told the panel that the concession was terminated because the concessionaire was not living up to expectations.

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 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 said: “Historically, iron ore used to be produced in Itakpe. They have a lot of staff that are producing iron ore. Some of the production lines in Ajaokuta were also working.

“We are still paying the staff there because the agreement has been terminated.”

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.

She also asked whether there was a penalty for the breach of the agreement by the Indian firm because it was on the wrong side of the law.

She demanded details of the litigation and urged the committee to probe the entire concessioned deal.

She said: “The Indian firm could not perform; they denied Nigerians, access to the iron ore company for three years.

“Instead of them being penalized, for depriving Nigeria, of its social and economic growth; we compensated them further by paying them $469m.

“This committee would like to see the court papers that penalized Nigeria.

“Mr. Chairman (of the Committee) 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.”

Officials of the ministry who accompanied the Minister to the Budget defence session also confirmed that the salaries of the workers at the firms, amounting to about N1.5bn annually were being paid by the federal government during the three years of the concession.

 The co-chairman of the committee, Dr. Zainab Gimba, agreed with the submission of Akpoti Uduaghan.

 The committee there resolved to hold a public hearing to probe the concession agreement at a later date.

About Lolade

Viral Video

Support Ooduarere

Scan QR code below to Donate Bitcoin to Ooduarere
Bitcoin address:

Check Also

Nigeria’s New $250 Million Dollars Lithium Battery Factory Set to Commence Operations