National Assembly Committee to Investigate $496m Payment to Indian Firm for Itakpe Iron Ore Concession
The decision by the National Assembly Joint Committee on Steel Development to launch an investigation into the $496m payment made by the Federal Government to an Indian firm for the unsuccessful revitalization of the Itakpe Iron Ore Company marks a significant development. This decision comes in the wake of the termination of the agreement with Global Infrastructure Holding Ltd. (GIHL) due to its failure to meet the expectations outlined in the concession agreement.
During the recent appearance of the Minister of Steel Development, Shuaibu Abubakar Audu, before the committee to defend the 2024 budget of the ministry, essential details regarding the terminated concession agreement were brought to light. According to Audu, the company was expected to produce iron ore and transfer it to Ajaokuta for steel development. However, it was discovered that the company was exporting the commodity instead. Consequently, the agreement was terminated, and the Indian firm was awarded damages amounting to $496m, a payment which the Federal Government has honored.
Senator Natasha Akpoti Uduaghan expressed dismay over the situation, questioning the justification for the continual payment of N1.5bn annually to the staff of a concessioned firm. Additionally, she expressed concerns regarding the lack of transparency in the termination of the agreement, advocating for a thorough investigation into the entire concession deal.
During the budget defense session, ministry officials confirmed that the federal government had been covering the salaries of workers at the firms, amounting to approximately N1.5bn per year, throughout the three years of the concession. Dr. Zainab Gimba, the co-chairman of the committee, aligned with the sentiments shared by Senator Akpoti Uduaghan, leading the committee to resolve to hold a public hearing to further scrutinize the concession agreement at a later date.
The failed concession agreement at the Itakpe Iron Ore Company and the subsequent payment of $496m to the Indian firm have raised serious concerns regarding the management of such contracts and their implications for the country’s economic growth. This case underscores the critical importance of transparency, accountability, and effective resource management for national development and progress.
As the investigation unfolds, it is imperative to ensure that all aspects of the concession agreement are thoroughly examined, and measures are put in place to prevent similar occurrences in the future. It is the duty of the government and relevant authorities to safeguard the interests of the nation and its citizens, particularly in matters that impact vital sectors such as steel development and natural resource management.
The outcome of the probe will be pivotal in shedding light on the circumstances surrounding the failed concession agreement and the subsequent payment. Furthermore, it will present an opportunity to bolster oversight and governance processes for the betterment of the nation.
