By Henry Henry Umoru & Inalegwu Shaibu
ABUJA —  THE Senate ad-hoc committee probing the privatisation and commercialisation activities of Bureau of Public Enterprise, BPE, yesterday commenced with revelations that the Aluminium Smelting Company of Nigeria, ALSCON, which was valued at $3.2 billion (N480 billion) was sold to a Russian company, Russel for $250 million (N37.5 billion).

Answering questions from members of the committee, Director General of BPE, Ms. Bolanle Onagoruwa, who appeared before the committee in Abuja said the BPE put the cost of the company at $250million but conceded it to Russels for $130 million  and left $120 million for dredging of Imo River.

It was also revealed to the committee that the Delta Steel Company, DSC, valued by BPE at N225 billion was sold to Global Infrastructure Nigeria Limited for N4.5 billion, just as she disclosed that BPE realised N146 billion from over 122 government enterprises sold during the privatisation exercise.

Ms. Onagoruwa told the committee that the drop in the value of ALSCON and DSC was due to the inflation of the contract sums when the plants were being built, adding that while it took Mozambique N120 billion to build an aluminium smelting plant akin to ALSCON, Nigeria spent over N400 billion on the same project.

She said: “N146 billion was the total money realised and it is lodged with the CBN. This is, however, after deductions have been made for expenses and labour liabilities.”

On the sale of ALSCON, she said: “The company was sold for N37.5 billion to Russel Nigeria Limited while N19.5 billion was discounted for the dredging of Imo River to enable Nigeria Gas Company, NGC supply gas to ALSCON. The reason is because the prices Nigeria pays for construction of plants were a lot higher than the world standard. A similar plant built in Mozambique was built for $800 million.”

The Director General also averred that the whole privatization exercise was not a total failure as being claimed as over 66.7 percent of the total companies privatized are performing at optimal level.

“The privatization exercise has not failed as people are made to believe. It is just about 33.6 percent of the companies privatized so far that are not doing well. 66.7 percent of the companies are flourishing. One of the success stories is in the telecom sector,” she added.

Committee Chairman, Senator Ahmed Lawan questioning the director general frowned at the N146 proceeds realized from the privatization exercise which began in 1999, noting that the lodgment of the proceeds in commercial banks instead of the Central Bank of Nigeria as provided by the act setting up BPE was illegal.

He expressed concern why government money should be lodged in commercial banks in Nigeria and the United Kingdom.

He said, “Privatization and Commercialization was to enhance development, however, in Nigeria, it has not been successful. 80 percent of privatized agencies are not performing; there is loss of jobs and economic loss which will jeopardize quest to make Nigeria one of the greatest economies by 202020.

“Let me refer you to section 19 (1) of the act. Where did you keep the money? Which part of the 1999 constitution or the act setting up BPE empowers you to open these commercial accounts? You will agree me that you contravene the law by having these lodgments in commercial banks.”

She however did not admit violating the BPE Act by lodging the monies in commercial banks by maintaining that the lodgments in commercial banks instead of CBN was done to ease the operational activities of BPE.

Ms. Onagoruwa who also commented on the sale of Ajaokuta Steel Rolling Complex told the committee that the BPE had no hand in the sale of the company, as it was sold by the Ministry of Mines and Steel.

On the low performance of Delta Steel Company and ALSCON, she noted that the companies were underperforming because of poor supply of gas to ALSCON and lack of iron Ore to DSC, but did  explain why Russel failed to dredge the Imo River after collecting N19 billion from the federal government for the job.

Earlier, Senate President, David Mark who declared the investigation open expressed worries over the privatization exercise saying it has left Nigerians worse off than expected.

He urged the committee to be courageous and transparent in the conduct of the probe, noting that, “It has been indeed, of great concern to the Senate that most of the privatised companies are under performing. That is our own perception and that is the perception of so many Nigerians.

“The chairman has noted that the privatised companies have not been working well. It is not a matter of one or two privatised companies that are doing well, the issue is whether the whole privatisation exercise has achieved its intended objectives.

“If one or two companies are performing well and about hundred other companies are not performing well means that the exercise has been a failure. Nigerians expected that most of the exercise would provide employment opportunities, add to government economic activities and that government would be able to benefit from the functional activities of these companies.

“The question is whether these objectives have been achieved or not. I has also been widely reported that many privatised enterprises are not performing, thereby leading to loss of jobs, financial deprivation to many Nigerian families. I believe that some of the companies have not even taken off.

“May be there was no proper understanding between government and investors or those who purchased these companies.  The issue is that if we don’t examine ourselves very well, we would be building our economy on a weak foundation.

“I urge the committee to very transparent, honest and open-minded, to be courageous and above all in whatever they do, to be above board in their findings.”

Meanwhile the former Minister of the Federal Capital Territory, FCT, Mallam Nasir El-Rufai is expected to appear on Thursday as he was out of the country for medical attention. El-Rufai who was also a former Director General of BPE who supervised the sale of most of the companies told the committee in a letter through his lawyer that he was out of the country on medical reasons, asking that he be allowed to appear before the committee on Thursday, 11th August.

Also Speaking to the Committee, Senator Fred Brume lamented what happened at the Delta Steel Company where the people of the host community inspite of the fact that they were prepared to be part of the buying process were denied, describing the sale of Delta Steel Company as lacking due process and that which was characterized by fraud.

Brume who noted that he the founding Chief Executive Officer, CEO of the company and also Chairman, Senate Committee on Steel in 1999, stressed that the host community was entitled to 10% of the share as well as the workers, adding that those who supervised the sale process had something to hide as there was preferred interest in the process.

According to him, the desire to make money denied the winner of the bid, Boa International  from being considered, just as he disclosed that the provisions for the sale provides that the core investor must deposit some money before sales, but the company which bought it, (Global Infrastructure Nigeria Limited) never deposited money before he was given the offer, alleging that it was after he got it that he deposited N3million  which he spread the remaining payment over three years against the law.

He also said that the community wrote the BPE intimating the Bureau of its readiness to pay for their shares to have a member on the board, but the BPE never replied, even as he said that the land belonging to them was being sold and the company which used to employ 9,000 workers, now has barely 1,000.