The $496 million that Global Infrastructure Holding Ltd (GIHL) received from the federal government will be investigated by the Joint Committee of the Senate and the House of Representatives on Steel Development.
Three years after the agreement was signed, the Itakpe Iron Ore Company was not able to be revitalised by the Indian company GHL.
It had assumed control of the National Iron Ore Mining Company (NIOMCO) at Itakpe, Kogi State, in 2016, and owing to purported non-performance, its deal was terminated in 2019.
GIHL, on the other hand, sued the government for breach of contract, and was granted $496 million in damages, which were paid.
When Shuaibu Audu, the minister of steel development, appeared before the joint committee on Thursday in Abuja to defend the ministry’s 2024 budget, the issue was brought up again.
The minister stated that the concession was terminated due to the concessionaire’s inability to fulfil the conditions.
According to Audu, the company was preoccupied with exporting the product when it could have been manufacturing iron ore and transferring it to Ajaokuta for the development of steel.
“The federal government underwent litigation before to the departure of the previous administration, and a settlement was achieved.
“The Indian firm received $496 million from the federal government for breach of agreement.”
The minister also told the committee that he was given the task of reviving the two steel companies in Itakpe and Ajaokuta by President Bola Tinubu.
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Itakpe was once the location of the production of iron ore. Many of the employees were involved in the production of iron ore. Ajaokuta’s production line had some sections operating as well.
“The agreement has been terminated, but we are still paying the staff there,” he continued.
Senator Natasha Akpoti-Uduaghan of Kogi State questioned the minister’s explanation for paying N1.5 billion a year to workers of a company that had received government concessions in response to her presentation.
She wanted to know why the agreement was terminated in secret and the public was not informed of the procedure.
“The Indian firm could not perform; for three years, they denied Nigerians access to the iron ore company,” the senator stated.
“Instead of penalising them for preventing Nigeria’s social and economic progress, we paid them an additional $469 million in compensation.
“This committee is interested in viewing the court documents that penalised Nigeria.”
“Mr. Chairman, let us focus on the budget defence at this time and schedule a public hearing for later.”
“This is due to the fact that we cannot keep assisting certain individuals at the expense of our beloved nation.”
Following confirmation from other ministry officials that the federal government was paying the workers’ salaries at the firms—which came to almost N1.5 billion annually—during the three years the concession was in effect, the committee approved her motion.
Dr. Zainab Gimba, the committee’s co-chair, and the other members approved the resolution to look into the transaction.
