The National Assembly is prepared to investigate the Federal Government's $496 million payment to an Indian corporation that failed to revitalize the Itakpe Iron Ore Company after three years.
This came up at a Joint Committee on Steel Development of the National Assembly yesterday.
Global Infrastructure Holding Ltd. (GIHL) took over the National Iron Ore Mining Company (NIOMCO) in Itakpe, Kogi State in 2016, however, its deal was terminated in 2019 owing to non-performance.
GIHL sued the Federal Government for breach of contract and was granted $496 million in damages, which it had already paid.
The failed concession agreement was brought to light on Thursday when Shuaibu Abubakar Audu, Minister of Steel Development, accompanied officials from his ministry to the National Assembly to defend his 2024 budget.
The concession was terminated, according to Audu, since the concessionaire failed to meet 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, on the other hand, claimed that President Bola Tinubu had urged him to resurrect the two steel firms in Itakpe and Ajaokuta.
Audu said, “Historically, iron ore used to be produced in Itakpe. They had a lot of staff that were 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”
Senator Natasha Akpoti Uduaghan, a member of the Committee, was enraged by Audu's arguments, questioning the logic of paying N1.5 billion annually to the staff of a concessioned firm.
Akpoti Uduaghan also questioned why the arrangement was terminated in private without informing the public.
She also inquired whether there was a punishment for the Indian firm's breach of contract, as it was in violation of the law.
She wanted information about the litigation and encouraged the committee to investigate 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 penalised for depriving Nigeria, it’s 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 (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 from the ministry who accompanied the minister to the budget defense session also acknowledged that the federal government was paying the workers' salaries at the firm, which amounted to around N1.5 billion per year, during the three years of the concession.
Dr. Zainab Gimba, the committee's co-chair, approved of Akpoti Uduaghan's submission.
The committee there decided to investigate the concession agreement at a later time through a public hearing.
