RUSSIA FORFEITED $2BN AJAOKUTA STEEL RENOVATION CONTRACT OVER WAR WITH UKRAINE — Adegbite

The crisis involving Russia and Ukraine has cost the latter a $2 billion dollar deal to renovate the ailing Ajaokuta steel company located in Kogi State, Nigeria.

DAILY POST gathered from the Minister of Mines and Steel Development, Olamilekan Adegbite, that President Muhammadu Buhari had approved the release of the funds to the Russian firm since 2020 but that while they were planning to mobilise to site the war broke out disrupting the contract.

As it stands, the Federal government has secured a fresh commitment from a British firm to revive the struggling Ajaokuta Steel Company Limited at no extra cost to the government.

Adegbite took to the weekly briefings coordinated by the Presidential Media team to explain current developments concerning the project.

The Minister said, “ in October 2019, Nigeria’s President Muhammadu Buhari and Russia’s Vladimir Putin met at the Russia-Africa Summit in Sochi and agreed to revive the uncompleted Ajaokuta steel mill.

He noted that constraints posed by the outbreak of the COVID-19 global pandemic also delayed the take-off of the project.

Adegbite was, however, economical with the name of the British firm which will now handle the job.

Giving more insights, he explained that the arrangements with the Russian firm failed because the contract was awarded to a company with both Russian and Ukrainian interests.

He disclosed that the $2b is safe in the federal government account, adding that “ the money has not even been given to anybody, the Russians can’t get any payment now with the way things are happening in the world. All their accounts are blocked.

“So the $2 million is still with the federal government is just that the President has given the money for that purpose. We had started the process of procurement, then with this war, we can no longer go that way.

The Minister revealed that the “British firm is offering to do it for us free now” adding that “By the grace of God, we have started an irreversible process. The problem with Ajaokuta is actually what we call force majeure. Nobody thought of COVID, because the plan was to deliver Ajaokuta this year 2022.

The Minister regretted, however, that the steel company may not be fully revamped under the current administration, as earlier promised.

His words, “ I’ve said it before, when we came back from Russia, yes, I went to the public and said, look we will deliver Ajaokuta before the end of this tenure. And I pray that I’ll have a chance to go back and apologize and explain what happened to the people before I leave office.

“ It is due to no fault of ours. Everybody was ready to go, but unfortunately, COVID came in. So, it is a force majeure”.