NASS to Investigate $496m Payment to Indian Company for Failed Itakpe Iron Ore Revitalization Project
The National Assembly Joint Committee on Steel Development has taken a significant step by passing a resolution to investigate the payment of $496 million by the Federal Government to an Indian firm that was unable to revitalize the Itakpe Iron Ore Company over a period of three years.
In 2016, Global Infrastructure Holding Ltd. (GIHL) assumed control of the National Iron Ore Mining Company (NIOMCO) in Itakpe, Kogi State. However, their agreement was terminated in 2019 due to non-performance. This resulted in the Indian firm taking legal action against the Federal Government for breach of contract and being awarded damages of $496 million, which were subsequently paid.
During a recent budget defence session at the National Assembly, the Minister of Steel Development, Shuaibu Abubakar Audu, disclosed that the concession agreement was terminated due to the firm’s failure to meet expectations. He also stated that President Bola Tinubu had directed him to revive the two steel firms in Itakpe and Ajaokuta.
The revelation of the failed concession agreement raised concerns amongst members of the Committee, with Senator Natasha Akpoti Uduaghan expressing anger over the payment of N1.5 billion annually to the staff of a concessioned firm. She also questioned the lack of public awareness surrounding the termination of the agreement and demanded details of the litigation, suggesting that the committee should conduct a thorough probe of the entire deal.
Furthermore, officials of the Ministry confirmed that the federal government had been paying salaries amounting to about N1.5 billion annually to the workers at the firms during the three-year period of the concession.
Following the committee session, Co-chairman Dr. Zainab Gimba concurred with the concerns raised. As a result, the Committee has resolved to hold a public hearing to thoroughly investigate the concession agreement at a later date.
