The moribund Ajaokuta Steel Company Limited risks being disconnected from the power grid over its failure to pay the N1.27bn electricity debt it incurred in the first three months of the year.
Described as a special customer, the Nigerian Electricity Regulatory Commission disclosed that Ajaokuta Steel Company and the host community did not make any payment towards the N1.27bn (Nigerian Bulk Electricity Trading Plc) and N0.09bn (Market Operator) invoices received in January, February and March 2024.
The regulator expressed displeasure that the trend of non-payment by the steel company had continued for a long time.
It added that the Federal Government had been urged to intervene to avoid total disconnection from the grid.
“This continues a longstanding trend of non-payment by this customer and the commission has communicated the need for intervention on this issue to the relevant FGN authorities.
“A continuation of the non-payment may trigger total disconnection from the grid,” NERC threatened.
In January, the TCN disconnected ASCL from the national grid as the moribund company failed to clear a debt of N33bn owed to the NBET and service providers.
The N33bn comprises N30.85bn for energy and capacity delivered by NBET and N2.22bn owed to service providers.
It was later reconnected after various interventions from the government.
At the time, the Federal Government said it would investigate how a non-functioning company accrued N33bn in electricity debt which prompted the TCN to disconnect it from the national grid.
The Minister of Steel Development, Shuaibu Audu, had expressed surprise at how the company accumulated such debt in electricity consumption when it had not been operating at full capacity.
“One of the things I spoke to the MD of Ajaokuta, and this was one of the questions I asked and we are going to get to the bottom of it: why consume so much electricity in a place that is not operating at full capacity?
“Part of what we also need to do is that we are trying to revive Ajaokuta in a collegiate system, in piecemeal, and so we may not have the capacity to be able to pay all those outstanding amounts immediately.
“Part of what the MD of Ajaokuta told me is that most of the money is in interest payments. And NBET, the electricity company that has disconnected it is also a government agency,” Audu explained in January.
He added that the Federal Government would not allow its agency, NBET, to hinder the effort to revive the steel company, which had been out of operation for about 45 years.
The 24-hectare steel mill in Kogi State was incorporated in the Fourth National Development Plan before it was abandoned by the Muhammadu Buhari military regime in 1984. It is considered the largest steel complex in sub-Saharan Africa.
For more than four decades, the company has remained static except for the epileptic operation of the light mills.
The efforts by the government to revitalise it have not succeeded.
At an April interactive session with the House of Representatives Committee on Steel Development, the minister stated that Nigeria’s annual steel imports were valued at $8bn.