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Interview with Minister Bashir Dalhatu on Ajaokuta (July

“We Require Less Than 3 Billion US Dollars for Ajaokuta”

Weekly Trust

July 19, 2003

Barrister Bashir Dalhatu, the Walin Dutse, was
Nigeria’s minister for steel, mines and power from 1993 to 1998. Most of the
contracts for the completion of Ajaokuta steel projects were awarded during his

In this interview with our Kano Bureau Chief, Musa Umar
Kazaure, the former minister shed more light on the extent of work done during
his tenure and what is now left to be done. Excerpts:-

Sir you were the minister for steel for five years and
Ajaokuta steel project was one of the priority projects. At what level did you
leave the project?

Dalhatu: By the time the late General Sani Abacha of
blessed memory died in 1998, we had achieved about 90 per cent completion of
Ajaokuta steel project. What remained was just about ten to 15 per cent level of
work because over 10 billion dollars have already been expended on Ajaokuta
project between 1980 and 1998.

Therefore the kind of investment is very huge that no
nation, not even developed world can afford to write off an investment of over
10 billion dollars. Besides other industries have been specifically established
to feed on the steel project like the Itakpe Iron Ore. mining has been completed
and it has been producing iron ore and is piling it in the sun, and nothing has
been done to that. If you don’t have Ajaokuta, this industry has become a total
waste and unless we could find a way to move it down to Warri where there is a
small and iron and steel industry there. Another thing is that because of
Ajaokuta there had been a contract and multi million dollar contracts for the
establishment of a standard gauge railway line.

From Ajaokuta down to Warri, this was specifically
conceived to bring in raw materials and take out finished goods to the sea. If
you abandon Ajaokuta you are abandoning this massive project, and we hope taking
that project to a very large extent, we would have made sure that it was
contained, the government at that time actually removed the project, the railway
project from power and steel ministry to ministry of transport to make sure that
is was given specific attention and sure that has been done and I know even
before we left, many kilometres have been finished, we cannot also abandon that.
If you abandon Ajaokuta you are also making nonsense of the project for dredging
River Niger because by the time we left, I know the contract was already being

Talking about the dredging of River Niger, how was
Ajaokuta going to help that project?

The River Niger is supposed to provide cheap, easy and
bulk transportation for both finished goods from Ajaokuta to the sea and the
importation by ships of bulk raw materials from the sea to Ajaokuta and this
would have been complemented by the standard gauge railway line also being
constructed at that time and is still being constructed. I hope by now if the
contract that I was aware of is still on they would have been at about near
finished, but unfortunately the River Niger dredging has not yet started
although, I believe it still on the table.

By the time you left, when you quantify the remaining
work in monetary terms, either in dollars or naira how much would you say the
government need to complete Ajaokuta project?

Unfortunately what we have towards the last lap of the
administration was to ensure that we quantify exactly in monetary terms what was
needed to finish Ajaokuta once and for all, and that I know a firm was
commissioned to do that. The efforts of government to make sure this is
completed even though funds were not available, that was what brought about debt
the so called much talked about buy-back which had become too politicised, but
thank God it was later examined by the National Assembly and found to be free of

Sir, this is the first time you are discussing it, tell
us what this buy-back is all about because of the negative publicity it

At the beginning of the debt buy back it was realised that
between the Russian contractor, and the government, there had been almost a
stalemate. There had been a very huge debt that had mounted, and there had been
the inability of government to pay the contractor, and the contractor was
anxious to get paid and the government also anxious to get money that will be
used to finish the contract, so as a third party was sourced to pay off the
contractor at a discounted price to which the contractor was happy to do and
then the government to pay less to the third party, when the money became
available. So that it was paying less than what it was owing and yet making a
balance of money in order for it to be ploughed back into Ajaokuta for the
completion. This is all that it was, and it was thoroughly misunderstood, but I
believe those who actually whipped up the emotion knew exactly what they were
doing and the reasons why they were doing it. There was no fraud, nothing at all
and I am quite happy that the Senate proved it and we all went and tendered
evidence and they have since then produced a report that cleared the debt
process and cleared our names.

You earlier mentioned that 80% of the work that has
been completed at Ajaokuta cost about 10 million dollars.

10 billion dollars and about 85 to 90 per cent of the work

How will you say the remaining work at the project,
just a guess will cost 3 billion US dollars?

I will say far less than that amount is required because
although it is very difficult in this circumstance to be precise, but obviously
it would have been far less to complete it.

Do you also believe taking the contract away from the
Russians, giving it to another company is a good idea?

Well, the Russians have been the contractors for this
project since 1979 and that is a long time, so they know the project in and out.
They know the company. They know what is required, they know everything because
they brought it and put it there and they would have been far more suitable
people to complete it.

Recently, the federal government was said to have
awarded the contract of Ajaokuta project to a company called SOLGAS which is an
oil company at the cost of 3. 6 billion US dollars, how do you see such a

Well, I do not know anything, until now about the
contract, I don’t know the parameters they used to give the contract, and I do
not know what are the elements involved in this contract, so it will be very
difficult for me to comment either for or against this particular one.

But during your tenure as minister, did you ever
consider giving such a contract in the steel industry to an oil drilling

No, the industry has many specific and specified
contractors we were dealing with and they were always available.

Looking back, what would have been the benefit of
Ajaokuta to the Nigerian economy?

Well, I think a long time ago, the leaders of the country
had realised that for this country to take off technologically, it was
imperative for us to have a massive steel industry, like all the other
established economies of the world started and that is the only way we could
have made progress and because we didn’t have Ajaokuta, up till now we have no
progress at all in terms of technological and industrial take off. But having
realised that they commenced on the establishment of steel company that is
capable of producing enough steel for Nigeria’s development and also in due
course in future, to have needy countries of the world. The Russians came up at
that time, and because you remember the Russians were those that assisted
Nigeria, we were emotionally attached to giving them, but because we gave the
Russians at that time when there was this cold war between the East and the
West-the IMF and the World Bank, of course opposed the contract and kept telling
us that it was a bad contract purely because it was Russians. After they
pressurised the government to a certain point along the line to give other
contracts, especially civil contractors, to various Europeans companies and they
are still very busy now.

Was that during the time of late General Sani Abacha or
General Babangida?

I want you to comment on this issue. Ajaokuta like you
rightly said started in 1979 during the Shagari administration, but critics of
late General Abacha are saying that, there was nothing that was achieved at
Ajaokuta during the tenure of the late General.

that is completely untrue, when we came towards the end of
1993, all the steel rolling mills in Jos, in Katsina, in Oshogbo and in Delta
Steel Rolling Mill were completely shut down and inactive. We revitalised them
and brought them back to life and made them produce steel for Nigeria, so also
reactivated and started using those steel rolling mills inside Ajaokuta itself.
We made sure that the railway lines started and achieved progress and this
project was stalled. It was functional when we came. This standard gauge railway
line between Ajaokuta and Warri, which I explained to you, was meant to go up
and down with the produced steel and also raw materials. That we did, we
completed the Itakpe Iron Ore Company for the production of Iron-Ore, and we
were producing Iron Ore. When we were producing in anticipation of the
completion of Ajaokuta and it wasn’t completed then, we built a harbour at
Ajaokuta, and started transporting this iron ore down to the Delta Steel Rolling
Mill in Warri. Like I said, we reactivated the rolling mills insides the plant
itself, we continued with the contract for the completion of it at great cost
and great effort, and I believe Ajaokuta as a unit component of government has
never seen more activity than when we were in government.

Now out of government and seeing how the entire effort
yourself and the past administration of late General Sani Abacha put into
Ajaokuta, how do you feel seeing all this dumped and neglected, just for
political or sectional reasons.

Well it is a very big pity. Its unfortunate not to only me
who had been partially involved in it, I believe every Nigerian should be very
sad about the whole episode about Ajaokuta not being able to be producing uptil
this moment because those who oppose it, do oppose it because we are a very big
market. We are the largest market in Africa, the day we start producing steel
that is the day we shut off the market for steel makers in Europe and they will
not like that, and this people, a lot of them have received loans from IMF and
World Bank. So we are doing the largest market in Africa for this people, so
they said don’t do it, it is not good for you.

We will never ever be strong without a very big steel
company project. This is a necessity and we either do it now or we do it in 10,
20, 30 years time, but we must do it as a country inorder for us to move forward
effectively and independently.

Therefore those who oppose it, also oppose it because they
sell their armament to us. The day we start producing our own steel, especially
the flat sheet, we will no longer buy any kind of weapon, we will be able to
create all the weapons the country requires out of Ajaokuta Steel Company’s
products, and there will be hundreds and hundreds of down stream industries
whose activity are tied to Ajaokuta production, and you can imagine how many
families how many Nigerians that will gainfully be employed and how much work is
going to generate within the community and even outside this country. So
Ajaokuta is a necessity, it is not a political item that you toy with, it is not
a subject that you do for the sake of talking, you have to work and produce,
that is the only way, you can achieve success. But without it we just have to be
importing in most cases substandard steel and we will rely continuously on
foreign countries and be giving employment to other people outside the


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