The Federal Government has on Thursday announced its intention to probe the circumstances surrounding the accumulation of a N33 billion electricity debt by the non-operational Ajaokuta Steel Company Limited.
This debt led to the disconnection of the company from the national grid by the Transmission Company of Nigeria (TCN).
The Minister of Steel Development, Shuaibu Audu, disclosed this information to correspondents at the State House after a meeting with Bola Tinubu at the Aso Rock Villa, Abuja.
The TCN disconnected ASCL from the national grid on Wednesday due to the company’s failure to clear a N33bn debt owed to Nigerian Bulk Electricity Trading Plc (NBET) and service providers. The debt includes N30.85bn for energy and capacity delivered by NBET and N2.22bn owed to service providers.
Minister Audu expressed his astonishment at how a company that was not operating at full capacity could accumulate such a massive debt.
He stated, “I mean, these are some of the things that need to be clearly looked into. 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?”
He further explained that the government’s plan to revive Ajaokuta in stages might not immediately allow for the settlement of all outstanding amounts. He also revealed that most of the debt was in interest payments and that NBET, the electricity company that disconnected Ajaokuta, is also a government agency.
Minister Audu assured that the Federal Government would not allow NBET to obstruct the revival of the steel company, which has been non-operational for about 45 years. He emphasized the need for the support of all stakeholders, including the electricity company, to bring the project back on track and create jobs for Nigerians.
In addition, the minister disclosed that his ministry had received Tinubu’s approval to form a committee to identify a suitable location for a new steel plant in the country.
He recalled that Tinubu had facilitated an agreement to establish a $5 billion plant with Jindal Steel of India during the G20 summit in India last September.
Minister Audu said, “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 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 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.”