By Inalegwu Shaibu
The alarm bell that prompted the Senate to set up an Ad Hoc Committee to carry out an inquest on the privatisation activities of the Bureau of Public Enterprise, BPE from 1999 to date was first rang by Vice President Namadi Sambo.
Architect Sambo as the chairman of the National Council on Privatisation, NCP had raised an alarm on the current state of most of the 122 federal government enterprises either sold or concessioned by the BPE since 1999 to date.
He had observed that the situation in the privatised companies had gone from bad to worse as over 80 percent of the privatised enterprises have become moribund.
He observed further that the much touted job creation and liberation of the economy believed to come with federal government total divestment from commercial entities in the privatisation exercise is nowhere in sight due to loss of jobs and the inability of the sold public enterprises to create new jobs.
The Senate taking a cue from the outcry of the Vice President commissioned an Ad Hoc Committee to look into the entire privatisation exercise, with a view to ascertaining the true status of the privatised companies.
In six days of non-stop public hearing, the Senator Ahmad Lawan led six-man Committee met with stakeholders in the privatisation exercise including past and current directors of BPE, the privatised companies and the Nigerian public.
Details so far uncovered at the public hearing range from the bogus to the hilarious with the different presentations made by the stakeholders. There were contradictions on details and figures, accusations and counter accusations by companies of one outsmarting the other in some of the businesses.
There were also revelations accusing top government functionaries of frustrating the privatisation exercise. Besides, there was the accusation of fraud and rip off of Nigeria’s commonwealth in tones of billions of naira notably in the sale of the Aluminium Smelting Company of Nigeria, ALSCON, Ikot Abasi, Delta Steel Complex, DSC, Alaja and the Ajaokuta Steel compex, Itakpe.
There were also lamentations from shareholders, pensioners of privatised companies, and host communities of some the privatised companies that include Eleme Petrol Chemical and DSC of being short-changed in the entire exercise.
The Committee began its work by asking the BPE director-general, Ms Bolanle Onagoruwa to furnish it with the total earnings accrued to the Federal Government from the sale of public enterprises since 1999.
In her reply, she told the Committee that government gained N146 billion from 122 companies sold or concessioned. She subsequently changed the total gross earnings to N249 billion earned from the entire exercise.
She also told the Committee upon request that the monies were lodged in commercial banks. Her revelation drew questions in some quarters as to whether the BPE was in violation of section 19 (1) of BPE Act, which provides for the lodgment of all privatisation proceeds in the Central Bank of Nigeria, CBN.
The Committee also unveiled several seemingly inappropriate deals such as the sale of ALSCON and DSC. Both companies were reportedly sold at undervalued prices. Ms. Onagoruwa confirmed to the Committee that ALSCON was sold to Rusal Nigeria limited for N37 billion even though the initial value was N480 billion.
She also confirmed the sale of DSC to Global Infrastructure Nigeria Limited, GINL at the sum of N4.5 billion as against the initial value of N225 billion.
According to her, the drop in prices was as a result of the inflation of the contract sum when the companies were being built.
In the ALSCON trade off, Rusal which emerged the preferred bidder was asked to pay $250 million with a discount of $120 million supposedly for the dredging of Imo River to facilitate the transfer of gas from the East across the channel to the plant.
But no work has been done six years after the share purchase agreement was signed and the discount of $120 million. Failre for this was reportedly due to Rusal. The company also failed to explained the whereabouts of $120 million to the Committee.
The scenario of the sale of Ajaokuta Steel Complex was just as complex and confusing to the Committee, when questions were raised on the details of the transaction.
According to the presentation of the Minister of Mines and Steel, Architect Mohammed Musa Sada, Ajaokuta was first sold to Solgas who could not raise the asking price of N46 billion.
Cancellation of agreement
He told the Committee that the inability of Solgas to come up with the money led to cancellation of agreement upon their request, resulting in the concession of the company to GINL under very shroud circumstances by former President Olusegun Obasanjo.
Sada accused GINL of ruining Ajaokuta. Instead of the expected turn around, he said GINL turned the company into a warehouse for the supply of spare part to the DSC, which they first bought.
Valuable machineries and equipments were stripped from Ajaokuta complex to DSC, while some were even exported, he claimed.
The Minister explained that N3.6 billion was being spent annually by the Federal Government on salaries of workers of the moribund Ajaokuta Steel. He said that while government requires N650 million to resuscitate the complex to a level of self sustenance, it rather preferred spending huge N3.6 billion paying the interim management committee of the complex for doing nothing.
He said, “A letter was raised by the then Minister of Power and Steel to the President, requesting the President’s approval to cancel the concession to Solgas and start discussion and conclude with another company, Isfat which is the mother company of GINL. The President gave the approval.”
The Committee also uncovered that the privatisation exercise suffered severe setback due to interferences from Chief Obasanjo. He was fingered by erstwhile BPE boss, Mrs. Irene Chigbue of interfering in the administrative processes of BPE.
He was accused of sanctioning the concession of Ajaokuta to GINL without due process and usurping the powers of the then Chairman of NCP, Vice President Atiku Abubakar, during their face-off in 2006.
Mrs. Chigbue in her testimony to the Committee, said the political logjam between Obasanjo and Atiku led to the bypassing of the NCP chairman over the privatisation, which then resulted in the violation of the BPE Act.
She said all documents were passed straight to the former President who gave all the approvals without input from Atiku.
She said, “There was a political lacuna between the office of the President and that of the Vice President and the President in his wisdom said we should be relating with the then Minister of Finance who is now a Senator.”
The hearing also witnessed bricks thrown at each other by former Ministers of Federal Capital Territory, FCT, Mallam Nasir El-Rufai and Aviation, Ambassador Kema Chikwe.
While El-Rufai who appeared before the committee as a former DG of BPE accused Chikwe of misleading Obasanjo on the privatisation of Nigeria Airways, Chikwe replied by accusing him of laying a bad foundation for the privatisation exercise.
El-Rufai in his presentation also praised himself for doing a good job during his stint at BPE, as he told the committee that all but one of the 23 public enterprises he privatised are functioning well.
He said his achievements also include returning N57 billion to the Federal Government. He nevertheless acknowledged that privatisation has failed in Nigeria because it has no idea and philosophy
But Chikwe in her reply accused El-Rufai of corruption, saying, “Today, his is busy unleashing his political frustration on innocent people. El-Rufai laid a very controversial formulation in the privatisation of Nigeria Airways.”
A member of the Committee, Senator Ifeanyi Okowa described the privatisation exercise as a rip off of Nigeria’s commonwealth.
He questioned the rationale behind the $120 million granted Rusal Nigeria Limited for the dredging of Imo River, without being put to use. He also said it was very unfortunate for government to be spending N3.6 billion per year as maintenance cost of the non productive Ajaokuta.
With the hearing brought to a close by the Chairman, Senator Lawan, the next phase of the investigation according to the Chairman will be visits to some critical companies for on the spot assessment.
He assured Nigerians that the Committee will carry out its job with transparency and without fear or favour. And upon conclusion of the investigation, will report to the Senate for appropriate action to be take.
But as the Committee continues with the probe, the questions on the lips of most Nigerians is whether the BPE probe will not go the way of similar probes embarked by the National Assembly in recent times, where results have remained elusive.