National Assembly Committee to Investigate $496m Payment to Indian Firm for Failed Itakpe Iron Ore Concession
The National Assembly Joint Committee on Steel Development has reached a resolution to investigate the payment of $496m by the federal government to an Indian firm. This payment was made to the Global Infrastructure Holding Ltd. (GIHL) after their unsuccessful attempt to revitalize the Itakpe Iron Ore Company. In 2016, GIHL assumed control of the National Iron Ore Mining Company (NIOMCO) in Itakpe, Kogi State, but their agreement was terminated in 2019 due to non-performance.
The revelation of the failed concession agreement occurred during a session with the Minister of Steel Development, Shuaibu Abubakar Audu, as he defended the 2024 budget for his ministry before the National Assembly. According to Audu, the concession was terminated due to the firm’s failure to meet its obligations. Instead of producing iron ore for steel development, GIHL was found to be exporting the commodity. As a result, the federal government had to pay $496m to the Indian firm for breach of agreement.
During the budget defence session, Senator Natasha Akpoti Uduaghan, a member of the Committee, raised concerns about the substantial payment of N1.5bn annually by the government to the staff of a firm that had already been concessioned. She also highlighted the lack of public awareness regarding the termination of the agreement and demanded details of the litigation. Akpoti Uduaghan stressed the importance of probing the entire concession deal, noting that the Indian firm deprived Nigeria of access to the iron ore company for three years. She questioned why the firm was compensated with $496m instead of being penalized for breaching the agreement.
In response, officials of the Ministry of Steel Development confirmed that the government had been paying the salaries of the workers at the concessioned firms, amounting to about N1.5bn annually during the three-year period. Dr. Zainab Gimba, the co-chairman of the committee, expressed agreement with the concerns raised, and the committee resolved to hold a public hearing to investigate the concession agreement at a later date.
The decision to scrutinize the $496m payment and the failed concession agreement reflects the government’s commitment to upholding accountability and transparency in its dealings with foreign firms. The probe will shed light on the circumstances surrounding the termination of the agreement, the litigation process, and the rationale behind the substantial payment made to the Indian firm. By conducting a thorough investigation, the National Assembly seeks to ensure that public funds are used judiciously and that appropriate measures are taken to prevent similar instances of non-performance in future concession agreements. The findings of the probe will provide valuable insights for strengthening the oversight of foreign investments and promoting responsible business practices within the country.
