The Nation Newspaper

Tag: National Council on Privatisation (NCP)

  • Ajaokuta: Reps ask Buhari to stop concession

    The House of Representatives on Thursday advised President Muhammadu Buhari to stop Mines and Steel Development Minister, Dr Kayode Fayemi, from concession moves of Ajaokuta Steel Company.

    The House said that the stoppage was to give time for conclusion of review of the process ordered by the chamber as part of its drive to get the company back on stream. 

    The resolution followed a motion by Rep. Ahmed Yerima (Zamfara-APC) and 24 other lawmakers.

    The motion is entitled “Urgent Need to Investigate the Circumstances under Which the Federal Ministry of Mines and Steel Engaged the Globally Discredited PricewaterhouseCoopers ( PwC ) to audit Ajaokuta Steel Complex for Purposes of Concession.”

    Moving the motion, Yerima said he was aware that Fayemi recently announced, “and it was widely published’’, that Ajaokuta Steel Company would be given out on concession after an ongoing audit.

    He disclosed that audit of the company was undertaken by PricewaterhouseCoopers, which he alleged, had been discredited, “having been sanctioned in India with a two-year audit ban for infractions of over one billion dollars’’.

    The lawmaker said that the firm was also sanctioned in Brazil for which it paid 50 million dollars as fine, and was fined in the United Kingdom for 5.1 million pounds.

    He also said that the firm paid 225 million dollars and 25 million dollars, respectively, as fines to TYCO shareholders in the U.S and Bank of Tokyo-Mitsubishiw for laundering money for Iran, Sudan and Myanmar.

    He added that it was blacklisted for roles in terrorism and human rights abuses, among other infractions and irregularities in its operations, “which has left its reputation in tatters.”

    Yerima expressed concern by the allegation that PricewaterhouseCoopers was informally engaged by Global Steel to assist and advise them on how to recover Ajaokuta Steel Company and National Iron Ore Company ( NIOMCO ), Itakpe, from the Federal Government.

    He said he was worried that the minister engaged a company whose antecedents may suggest that they were engaged to audit and prepare reports which may skew the outcome in a pre-conceived manner.

    According to him, it may have done to favour parties which the minister may have lined up or which may represent the interests of their former clients ( GINL ).

    The legislator wondered why Bureau of Public Enterprises, and Infrastructure Concession Regulatory Commission ( ICRC ), established by law, was not involved in the audit and concession process.

    He accused Fayemi of deliberate plot to concession Ajaokuta Steel Company to a pre-determined group.

    He decried the minister’s submission that government could no longer spend additional funds on the company “when he is already spending N2 billion for the concession process’’ and where Nigeria spent over 3.5 billion dollars on steel importation.

    Yerima said since NIOMCO was handed again to Global Steel in “so called modified concession for a seven-year period with an option of a further 10 years, the plant which is integrated with Ajaokuta Steel Complex has remained moribund’’.

    According to him, this development is an indication of likely failure of yet another concession.

    Supporting the motion, Rep. Nicholas Ossai (Delta-PDP) said “this is a man that says that Ajaokuta cannot be brought to life but has spent N2 billion on the company 

    “This has to be investigated in line with section 88 of the 1999 Constitution. 

    In his contribution, Rep. Mohammed Abdu (Bauchi-APC) said “we know that the five countries of the world that have become world powers have their roots in steel industry. We cannot play with our common sovereign wealth.”

    Similarly, Rep. Bashir Babale (Kano-APC) reminded members that “this is a government that promised change and to fight corruption.

    “How much are we spending to import steel in this country? I wonder why the minister was in a hurry for this concession.

    “We need to be patriotic enough to make sure that what we do, we do it for Nigerians. I urge my colleagues to support this motion.”

    On his part, House Leader, Mr Femi Gbajabiamila, called for a Bill to stop the concession of Ajaokuta Steel Company or amend existing law to check the process.

    Many lawmakers, including Edward Pwalok (Plateau-APC), Toby Okechukwu (Enugu-PDP), Aminu Shagari (Sokoto-APC) and Emmanuel Orker-Jev (Benue-APC) supported the motion.

    The House agreed that the decision to stop the concession process was in the interest of the nation’s economy and the anti-corruption fight of the Buhari administration.

    In adopting the motion, the lawmakers resolved to expand the mandate of its Ad Hoc Committee on Ajaokuta Steel Complex to include urgent consideration of possibility of a bill for completion of the company and prohibit its concession. 

    It equally mandated the committee to inquire into the rationale of engaging “a globally discredited firm, PricewaterhouseCoopers ( PWC ) to audit the company, without due process.

    The House consequently urged the Senate to concur on the motion and resolved to amend the National Council on Privatisation ( NCP ) Act to delete Ajaokuta Steel Complex from the list of companies for concession.

    NAN

  • NCP approves privatization of Afam power plants

    NCP approves privatization of Afam power plants

    The National Council on Privatisation ( NCP ), which is chaired by the Vice President Yemi Osinbajo, has approved the commencement of the privatisation of Afam Power plants 1 to 5 in Rivers.

    According to statement issued by the Vice Presidential Spokesman, Mr Laolu Akande, on Monday the measure is to inject additional power into the national grid and improve electricity supply nationwide.

    Read also: NNPC increases gas supply to power plants by 123%

    Akande said this and other decisions were taken during the meeting of the NCP, between Aug. 22 and Aug. 23, 2017 at the Presidential Villa, Abuja.

    NCP is the highest decision making body on policies relating to the privatisation and commercialisation policies of the Federal Government.

    According to Akande, the Council also approved the pursuit of an out-of-court settlement involving the privatisation of Aluminium Smelter Company of Nigeria (ALSCON).

    The move, he said, aimed to resolve the lingering dispute between the Federal Government, BFIG and United Company RUSAL through the mediation of the Secretariat with the active collaboration of the Federal Ministry of Mines and Steel Development.

    The council advised that “the mediation efforts should take a holistic view of the entire sector and the overriding national interests to jumpstart industrial development through the steel sector in arriving at a resolution on the matter.”

    The council also  reviewed the proposals presented by its Secretariat, the Bureau of Public Enterprises (BPE), for the reform and restructuring of various sectors of the economy.

    Read also: Senate to probe Kaduna power plant failure

    Consequently, it approved the immediate revocation of the concession of the Lagos International Trade Fair Complex and the immediate commencement of a fresh privatisation of Yola Electricity Distribution Company.

    The approvals, he said , were aimed at giving traction to key infrastructure facilities in the country presently under concessions but had been adjudged to be performing sub-optimally.

    Other key decisions taken by the council included the approval of the amendments to the Work Plan for the conclusion of the transaction involving the concessioning of Terminal “B” Warri Old Port.

    The Council also approved the  restructuring and recapitalisation of Bank of Agriculture.

    “The restructuring of the BOA is in alignment with the Government’s desire to make financing options readily available to farmers for an aggressive diversification of the Nigerian economy.”

    He said the council also approved the immediate commencement of the reform and commercialisation of the River Basin Development Authorities to revitalise the irrigation and river basin potential for agricultural purposes.

    Similarly, to harness the nation’s untapped tourism potential, the council approved the partial commercialisation of the National Parks using three key national parks as pilot projects.

  • Concessionaire loses Lagos Trade Fair complex

    Concessionaire loses Lagos Trade Fair complex

    The National Council on Privatisation (NCP) has approved the immediate revocation of the concession of the Lagos Trade Fair Complex and  a fresh privatisation of the Yola Electricity Distribution Company.

    It also approved the privatisation of Afam Power plants 1-5 to inject additional power into the national grid and improve electricity supply.

    The Council, chaired by Vice President Yemi Osinbajo, also approved the pursuit of an out-of-court settlement of the dispute over the privatisation of Aluminium Smelter Company of Nigeria (ALSCON).

    Other decisions taken during the August 22 and 23 meeting at the Presidential Villa in Abuja include:

    Approval of the amendments to the Work Plan for the conclusion of the transaction involving the concessioning of Terminal “B” Warri Old Port; the restructuring and recapitalisation of Bank of Agriculture.

    “The restructuring of the BOA is in alignment with the Government’s desire to make financing options readily available to farmers for an aggressive diversification of the Nigerian economy,” the Council said in a statement by the Senior Special Assistant on media and publicity to the vice president, Mr. Laolu Akande

    The Council also approved the immediate commencement of the reform and commercialisation of the River Basins Development Authorities to revitalise the irrigation and river basin potentials for agricultural purposes.

    The move, according to the statement is aimed at resolving the lingering dispute between the Federal Government, BFIG and United Company RUSAL through the mediation of the Secretariat with the active collaboration of the Federal Ministry of Mines and Steel Development.

    The council advised that “the mediation efforts should take a holistic view of the entire sector and the overriding national interests to jumpstart industrial development through the steel sector in arriving at a resolution on the matter.”

    The meeting also reviewed the proposals presented by its Secretariat, the Bureau of Public Enterprises (BPE) for the reform and restructuring of various sectors of the economy.

    These approvals, the council noted, were aimed at giving traction to key infrastructure facilities in the country that are presently under concessions, but have been adjudged to be performing sub-optimally.

  • Reps halt NNPC’s $400m loans bid for refineries

    Reps halt NNPC’s $400m loans bid for refineries

    The House of Representatives committee on Privatization and Commercialisation Wednesday stopped the bid by the Nigerian National Petroleum Corporation NNPC to acquire a $400 million loan for the upgrade of the four refineries in the country.

    The Hon. Ahmed Yerima- headed committee said the NNPC  was breaching Section 11 (g) of the Public enterprises ( Privatisation and Commercialization) Act 1999, which gives the National Council on Privatisation the power to do such

    Members of the committee said the NNPC shoukd suspend outrightly the proposed restructuring/Privatisation of the four refineries because of the breach of the regulations in the Bureau of Public Enterprises (BPE) as well as the Presidency’s delay in inaugurating the National Council on Privatisation (NCP).

    The committee said formally communicate President Muhammadu Buhari on the need to adhere to due process and avoid pitfall of commercialisation and privatisation exercises that were made in the past.

    The Committee noted that breach of policy guidelines and extant regulatory framework and undue rivalry among Government agencies is giving investors concern.

    According to NNPC document submitted to the Committee and obtained by our Correspondent, “in 2015, the refineries posted combined losses of N82 billion and processed only 8 million barrels of crude in total.”

    At the meriting yesterday, the failure of the NNPC management to present documents showing the approval allegedly given by the President for the proposed improvement of the refineries’ capacity utilisation to 80% within one year on the basis of the subsisting ownership structure, made members of the committee angry.

    Also the $50 million agreement signed by NNPC with a Chinese company, without any clear work plan got the disapproval of the lawmakers.

    Group Executive Director (Refineries) Anibor Kragah, who spoke for NNPC, said the report on the privatisation of the refineries, was not true.

    According to him, the “proposed investment proposals do not involve commercialisation or any transfer of ownership, assets, shares or control of the three refineries NNPC owed refining companies and are fully aligned with the current administration’s drive to ensure that the midstream and downstream sectors of the Nigerian Oil and Gas industry become self-sufficient in refining of petroleum products in the shortest time frame to ensure the country’s economic growth.

    “The need to rehabilitate the refineries is also in alignment with the aspirations of the National Assembly as communicated to NNPC at several engagements.”

    The refineries, he said, have recorded very poor performance over the last decade (30% average capacity utilisation vs global benchmark of 90%).

    He said NNPC does not need to subject the process to BPE approval, adding that that “BPE also shared its concerns on the viability of utilising JV arrangements for the rehabilitation exercise and the potential implications of the proposed activities on any FGN privatisation plans in future.”

    The exercise, Kragah said, has been put on hold in line with the directive of the House, adding that the Corporation has so far placed tender for investors to expressed interests.

    Vincent Akpotaire, BPE acting Director General however denied knowledge of the process, saying the privatisation of the refineries has always been part of the Bureau’s work plan tagged ‘potential transaction’.

    According to him, due to the political mood at the time due to the death of late President Umaru Yar’Adua, previous exercise for privatisation of 51% equity stake of both Kaduna and Port Harcourt refineries to Bluestat Oil Services Limited (preferred bidder) for $561 million and $160 million were truncated.

    Sales of the refineries were cancelled and the bid money refunded with accrued interests paid to the two bidders.

    He said there is the need to review the funding challenges in the oil and gas sector,

    “The glaring inefficiencies in the sector coupled with the bureaucratic nature of NNPC that the JV model has a gloomy future is very unlikely to succeed given the that it is the same agency and people that have been unable to run the refineries that will be called upon to regulate and supervise the joint venture operations.” Akpotaire said.

    Chairman of the committee on commercialisation and privatisation, Ahmed Yerima in his ruling directed BPE to take over the process and also directed NNPC to suspend all the activities put in place.

    He said without the relevant regulatory agencies, the committee House will not support the project.