Reps Probe Abandoned Osogbo Steel Company, NMT

… Ask BPE To Embark On Regular Inspections Of Government-owned Enterprises

The House of Representatives has mandated its Committees on Privatization and Commercialization, Industry, and Steel to investigate the abandoned Osogbo Steel Rolling Company and Nigeria Machine Tools (NMT).

The House also urged the Bureau of Public Enterprise (BPE) to embark on regular inspections and monitoring of government-owned enterprises acquired by investors.

These resolutions followed the adoption of a motion titled, “Need to Investigate the Privatisation and Subsequent Abandonment of Osogbo Steel Rolling Mills” moved by Hon. Adewale Morufu Adebayo and Hon. Akanni Clement Ademola.

Moving the motion, Adebayo noted that Osogbo Steel Rolling Company was one of the three Inland Rolling Mills in Nigeria established by an Act of the Federal Government of 1976 and officially commissioned in 1983 to produce a maximum of 210,000 metric tons of Iron Rods annually.

He further noted that Nigeria Machine Tools (NMT) was founded in 1980 to manufacture and distribute high-integrity machine tools and other engineering products and spares designed to serve the projects, operation and maintenance needs of a range of industries.

He said the two entities were critical components of the Nigerian industrial sector as the Osogbo Steel Rolling Mills produced part of the steel used in the construction of Africa’s largest Third
Mainland Bridge in Lagos.

According to him, the Privatization and Commercialization Act provides for the privatization and commercialization of Federal Government-owned enterprises, as well as those in which the Federal Government has an equity stake.

“Both companies and other National Assets were sold to private investors by the administration of former President Olusegun Obasanjo through the Bureau of Public Enterprises (BPE) to bring in core investors either foreign or domestic to turn around the company and contribute to the growth of the economy.

“The Osogbo Steel Rolling Company was designed to be completed in three phases, the first phase was to produce 210,000 tons annually with 1,000 workers, the second phase was to increase the annual capacity to 420,000tons of steel annually with a staff strength of 2,000 while the third phase

was to increase capacity to 630,000 tons annually with 3,000 staff strength;

“In line with the Privatization Act, the Federal Government sought and got a Federal high court order to liquidate Osogbo Steel Rolling Company and other Steel Rolling Mills in 2005.

“The stakeholders in Osun State, including lawmakers, are protesting the abandonment of Osogbo Steel Rolling Mills and Nigeria Machine Tools, calling for a review of privatization.

“After the privatization of Osogbo Steel Rolling Mills, the company has suffered a lack of

maintenance and investment leading to a state of disrepair and operational inefficiency, thus undermining the potential of the steel industry to create employment opportunities and economic growth in the region

He explained that with the privatization of Nigeria Machine Tools, the company has experienced a decline in production capacity and overall performance which is a significant setback for the manufacturing sector.

The lawmaker expressed worries that the abandonment of Osogbo Steel Rolling Mills and Nigeria Machine Tools by investors and the failure of the Bureau of Public Enterprises (BPE) to oversee and enforce the provisions of the asset sales and purchase agreement has led to the proliferation of substandard steel product littering the Nigeria market.

They added that the abandoned properties are used by criminals, gunmen, kidnappers, and marijuana dealers, among several societal ill actors.

In the end, the Committees are mandated to report back within four weeks for further legislative action