Nigeria probing sale of two steel plants to India''s Global Infrastructure
01 Nov 2007
Mumbai: Nigeria is reviewing the sale of two steel plants - Delta Steel Company and Ajaokuta steel complex - to Global Infrastructure Ltd (GIHL) of India after complaints the process was fraught with irregularities, officials said.
GIHL bought Delta Steel Company for $30 million in 2004 and won a 10-year concession for Ajaokuta, a 1.3-million tonnes-a-year steel complex, which was converted to 60 per cent equity in May.
Nigeria''s BUA International had offered $31 million for an 80 per cent stake in Delta Steel and was named preferred bidder at an auction in the capital Abuja. The deal was cancelled weeks after and the mill handed over to GIHL, which was not part of the bidding process.
Solgas and BUA had challenged the revocations in the courts. The concession for the Ajaokuta steel plant was first handed to UK-registered Solgas Energy Ltd, but Nigeria terminated the $3.6 billion deal after some weeks, for failing to come up with the cash in time.
The deals under former President Olusegun Obasanjo, meant to revive Nigeria''s ailing steel sector, were widely criticised and some groups called for an official probe.
A five-man panel will probe the two deals and has six weeks to submit its report, a spokesman of Nigeria''s ministry of mines and steel said.
The committee will determine GIHL''s compliance with the terms of agreement and examine how the Indian firm won the bid for the 960,000 tonnes a year Delta Steel company, the ministry spokesman said.
The committee will also determine the amount of money GIHL has invested in the mills since it took control and establish if it has outstanding debts from the government.
