Lauretta Onochie x-rays “inherited privatisation mess” of Ajaokuta cleared by Buhari’s govt

By BASHIR ADEFAKA

Mama Due Process, as she is fondly called, Madam Lauretta Onochie has hit the media airspace with yet another instructive x-rayed nature of decays that Nigeria’s economy had undergone under past governments but which President Muhammadu Buhari, between 2015 and now, has cleared.

One particular area of interest is the Ajaokuta Steel Rolling Company in Kogi State, which operationality continued to be incapacitated since July 2003 under President Olusegun Obasanjo up to the administration of President Goodluck Jonathan.

Onochie, who is the Digital and Social Media Aide to President Muhammadu Buhari, presented this detail with a cursory advice to future governments on how those of the past got it wrong and be guided with the wisdom employed by the current government of Buhari so as not to be pushed back to same problem by the self-centred elements after Buhari will have left office.

“July 2003: Obasanjo Administration concessions Ajaokuta Steel Company to SOLGAS (along with contracts to build a gas facility and a 2,300MW power plant), for $3.6 billion. The 10-year concession contract, meant to achieve the rehabilitation, completion, commissioning and operation of the Steel complex, is later cancelled, on the grounds of non-performance, and a new bidding process starts.

“June 2004: Obasanjo Administration announces BUA International as winner of the new bidding process for the concession of Ajaokuta, and then again cancels the process, before finally granting the contract to Global Steel Holdings (GSH), through a subsidiary, Global Infrastructure Nigeria Limited (GINL).

“December 2004: Solgas initiates arbitration proceeding against FGN in the International Chamber of Commerce. (This eventually results in a $15m award against FGN).

“2004 – 2007: Within this period the Obasanjo Administration granted a total 5 major contracts to GINL, as part of so-called privatization reforms. In addition to Ajaokuta and NIOMCO, other contracts granted GSH/GINL covered the Delta Steel Company, Nigerian Mining and Iron Ore Company (NIOMCO), and the Warri-Itakpe Railway.

“April 2008: The Yar’Adua Administration, on April 1, 2008, terminates all the 5 GINL contracts, contrary to legal advice by the Federal Ministry of Justice.

“Had the Federal Government waited 55 more days, it would have been able to lawfully terminate all the contracts at ZERO cost to the Federal Government of Nigeria. In fact, FGN would have had the right, from May 25, 2008 (the first anniversary of the signing of the Ajaokuta and NIOMCO Share Sales and Purchase Agreement), not only to terminate the Agreement, but also to claim more than US$ 26 million in liquidated damages, under Clause 12 of the Agreement, as the company appeared unable to pay the first tranche for the shares as agreed.

“2008: GSH/GINL drags Nigeria before the International Court of Arbitration, London, alleging wrongful termination and breach of contract.

“2012: Jonathan Administration commences out-of-court settlement, based on legal advice that potential cost of the termination could be humongous. Negotiating Team set up by FGN.

“2013: A Framework Settlement Agreement (FSA) is reached between FGN and GSH/GINL, which the Jonathan Administration unfortunately did not execute/implement before leaving office in 2015. Among the terms of the 2013 FSA were: a. Re-concession NIOMCO to GlNL for 7 years, and draw up a Modified Concession Agreement (MCA) to this effect b.  Retrieve Ajaokuta from GINL.

“June 2016: Buhari Administration initiates a further review/negotiation of the MCA for NIOMCO, to achieve more favorable terms for Nigeria, as part of the overall FSA.

“Aug 2016: The Buhari Administration begins execution of the Jonathan Administration FSA, along with the Buhari Administration MCA. According to the Federal Government, at the time, “execution of the Agreements marks the commencement of process to liberate Ajaokuta Steel Plant from every arbitral encumbrance with GINL, which had held it bound since 2008.”

“May 2020: Global Steel Holdings (GSH) threatens resumption of the ICC arbitration in abeyance, with a cost implication of as much as $10-14 billion in potential damages against FGN, in respect of all the five contracts that were cancelled by the Yar’Adua Administration.  Global Steel’s legal representatives, King and Spalding, eventually advances a reduced claim of $5.258 billion in ICC-led mediation under Mr. Phillip Howell-Richardson. For this process Nigeria signed-on Dr Tunde Ogowewo, a barrister (and senior academic at King’s College London), to advise the FGN through the process of the final and full resolution of the arbitral claims. He produced a 1,000-page report on the case. PwCNigeria was also engaged by the Nigerian Government during the process.

“3 September, 2022: FGN announces settlement of the $5.258 billion claim in mediation under the International Chamber of Commerce (ICC) ADR framework, for $496m – less than 10 percent of the original sum being claimed. The settlement agreement came into effect on 19 August 2022.  By this settlement, the Buhari Administration has rescued the Nigerian steel, iron ore and rail industries from a variety of interminable and complex disputes with Global Steel Holdings (GSH) and Global Infrastructure Nigeria Limited.

“(GINL), as well as saved Nigerian taxpayers and the treasury from the significant damages that would have ensued,” Lauretta Onochie posted via her Facebook timeline on Wednesday.

She then presented quotes from submissions of concerned government officials, per adventure for future governments to be rightly guided so as not to repeat the same mistakes or failures of the past:

“Future arrangements – sale or concessions – must be carried out with the interest of the nation at heart and in compliance with the law. If we fail, our steel sector will produce more litigation than steel.” – Arc. Olamilekan Adegbite, Federal Minister of Mines and Steel Development.

“Our national debt is not only a function of sovereign borrowings – it is swelled by legal claims brought as a result of contractual disputes. Terminating bad contracts is often as costly as entering into bad contracts.” – Dr. Mrs. Zainab Shamsuna Ahmed, Federal Minister of Finance “[Ogowewo’s] report.

“FGN Counsel’s Report for the Honourable Attorney-General of the Federation and Minister of Justice, Federal Republic of Nigeria on Case Reference 15539/VRO/AGF/ZF/TO/AZR/SPN)’ – at over 1,000 pages is a guide to successive governments on how to avoid such contractual disputes and where they occur how to reach cost-effective savings for the benefit of the Nigerian taxpayer.” – Attorney-General of the Federation and Minister of Justice, Abubakar Malami, SAN.

Versatile Lauretta Onochie, who had been United Kingdom based body language expert until she came home to serve under the administration of President Muhammadu Buhari, has several positive records of her consistency in properly presenting the right information to Nigerians and friends of Nigeria globally about truths that some elements have tried hard not to let out to public knowledge about the government of her boss, Buhari.