© 2018 - International Centre for Investigative Reporting
INVESTIGATION: Delta Steel Company is dead, its former staff are dying
Two years after the Federal Government handed over Delta Steel Company (DSC) to Premium Steel and Mines Company Limited — a consortium of private investors — to revive it and start production of steel for local and export purposes, the multibillion-naira outfit is yet to take off. YEKEEN AKINWALE, who visited the company situated at Owvian, Aladja town, Delta State, finds out that the company is still grappling with a financial crisis that looks intractable.
“Warri no dey carry last, na wetin we dey always talk, but for this Delta Steel Company matter, we don carry last,” quips Justice Iyasere, who looks towards the massive structure of the steel company with disappointment clearly etched on his face.
Although Iyasere, a community leader and local government chairman aspirant in Udu Local Government, is not one to give in to pessimism, he admits that it will take more actions than precepts to get the company running again — especially in the face of unending crises ranging from war by ex-workers, to huge debts to suppliers and threats from other interest groups.
Years of politicking, mismanagement and lack of interest by the Federal Government, he says, led to the collapse of what was once the pride of Delta State. If it were alive and running, Nigeria’s reliance on imported steel and aluminum products ought to have significantly reduced.
Its sales to Premium Steel and Mines Limited under the Federal Government’s privatisation programme, besides being opaque, is already a subject of litigation — communities hosting the company in Udu have instituted a law suit against Federal Government and Premium Steel and Mines Limited, to contest the sale.
At the moment, Nigeria spends N887 billion (about $4.5 billion) annually to import 25million tons of steel and aluminum products. This is not going to end soon except steel plants such as DSC start producing steel locally.
In 1980, when the plant was established and commissioned under the leadership of Fred Aghogho Brume, pioneer General Manager, it was designed to produce 1 million tons of liquid steel per year. It never attained this maximum production output. Its best performance was in 1983, when it produced 500,000 tons. Since then, the plant has been aground.
“In 1985, the highest steel production a day was 23 heat in the whole of Africa and in that year, Delta Steel was producing 21,” says Sam Agberhiere, one of its pioneer staff.
“If government is actually serious about steel making, by now we should have been one of the leading countries in the business. But the reverse is the case.”
From conception, DSC was designed to place Nigeria in the comity of manufacturing countries, particularly giving it an edge in the automobile sector. The foundery section, which earlier manufactured brake discs, drums and other parts for Peugeot Automobile Nigeria (PAN), Kaduna, has long been shut down.
“PAN in Kaduna was making order in 2002, 2003 and 2004 from here. we made brakes drums, engine blocks, and other accessories in good quality,” said a former staff of the company who did not want to be named because of a running battle with the new management over unpaid entitlements.
The Phase II of the plant, designed to manufacture flat sheets for production of car bodies such as bonnets, car doors, roofs and booths, never took off. The natives who donated the land to government for the company to build the Phase II have reclaimed it.
“In one word, I’d say what killed DSCL is politics. They played politics with the plant. That’s why we have found ourselves where we are today. Warri don carry last here.” Iyasere says.
Robinson Akpodovhan, retired Manager, Shipping and Logistics at the plant, would also not spare government of blame. He says government did not effectively monitor the company.
“You cannot rule out the hands of government from the failure of the company,” he says. “Ajaokuta is over 40 years now and still grappling with construction, and it is also owned by the government.”
Truly, a desolate edifice of the company sandwiched by bush says much about its years of misfortune. Before now, the company supplied billets to Jos Steel Rolling Mill, Katsina Rolling and Oshogbo Rolling Mill. All three rolling mills are also dead.
HAUNTED BY EX-WORKERS, HEAVY DEBTS, UNSEEN FORCES…THE FACE OF A DESERTED PLANT
With a gun-wielding soldier and other private security guards manning the gate, a visitor without prior appointment will not have his way in. “Gaining access to the plant is not an easy task; you have to come back in two weeks’ time,” a security guard tells this journalist.
An insider says, the new management of the company is haunted by aggrieved ex-workers who have vowed never to allow operation in the plant except their entitlements are paid. So, the main gate is under tight security against any unforeseen invasion by ex-workers. But its former owners, Global Infrastructure Holding Limited, is also laying claim to the company and indeed pressing to take it over.
Save for a few employees working on an excavation across the main gate of the company, there is actually no movement of heavy duty trucks that could suggest any activity going on in the company. No deafening sounds of iron casting coming from the plant or the razzmatazz that characterize a steel company.
It wears an old look, all the welcome signposts along the dual carriageway erected by the new management notwithstanding. Keen visitors get the impression of a company not working right from the corridor of the same express road.
The express road was constructed purposely to connect the steel plant to the Warri Port, in order to enhance easy evacuation of finished iron products. But the road is not only deserted but also dilapidated.
A trailer park some kilometers away from the main entrance of the company that once served as the assembly point for heavy duty trucks taking finished products is long gone; it has been taken over by bushes; no ancillary business along the road is visible. Business life of the area apparently died with the steel plant.
“As an A–level student of Federal Government Warri, we were taken to DSCL on excursion; the noise there was deafening — noise of steel production and heavy presence of heavy-duty trucks waiting to evacuate iron products such as iron rods, billets and other products were sights to behold,” recounts Onwuka John, a resident of Owvian.
“In those days, oil workers, were resigning. I saw them join the steel sector. Many resigned from Shell to join Delta Steel because everything about the company was too attractive for anyone not to eye its workforce; housing estate, schools, football team and even hospital were owned by the company.
“No company impacted the lives of the Deltans than the steel company, but all that is history now,” he adds.
“It was operating three shifts and you need to see staff buses conveying workers from Steel Town for their shifts to the company. But now, the plant is just like a ghost town.”
The units within — harbour, Direct Reduction (DR) plant and the pellet plant, Lime Plant, Rolling Mill, Electric Air Furnace, and the Continuous Caster — are littered with wreckage and waste, while other auxiliary units of the plant such as the foundery, electrical and mechanical maintenance workshops and water supply system, have all been overtaken by elephant grasses.
Creating an impression of work in progress, however, are a few workers here and there strapping their safety helmets and putting on dusty factory boots. But there’s arguably no steel processing going on in the company.
Waiting for the promised facelift by the new owners, Premium Steel and Mines Limited, the brownish rusty bodies of the equipment and the broken-down or abandoned machines all over the place are relics of a dead giant.
In March 2017, a group of investors from the United States of America and Morocco were reported to have visited the plant, proposing N600 billion investment to help revamp it — an indication that the new owners too might be in need of financial muscle to run the plant, like their predecessor, Global Infrastructure, which failed to turn it around.
But Victor German, General Manager, Government and Community Affairs at the company, denies any such proposal from any investor. He says the Indian investors have both financial and technical abilities to operate the company.
This claim is already being contested. Ebhaleme Pius, a former staff of the company who worked there when it was sold to Global Infrastructure Holding Limited, says the Management of Premium Steel and Mines, under the leadership of Prasanta Mishra, lacks not only the technical knowhow and financial muscle to run it successfully but also has no record of steel making.
“Those are not steel makers,” says Pius. “That’s why they are yet to manufacture a pin for the past two years. They cannot manufacture anything there because they don’t have experience in steel making.?
When it’s new owners took over in 2015, they promised to revive the comatose steel plant with N370 billion. Back then, with an established elaborate plan for the company’s revival with N70 billion in new investments in the first phase and N300 billion in the further phases, it looked like the company was going to have a new lease of life.
German admits that Delta Steel Company, as it is still called by the locals despite change of ownership and nomenclature, is still haunted by many known fears from disenchanted ex-workers who have vowed never to allow new investors take over the company until the N3.2 billion due to them is paid.
The workers are insisting that all industrial issues be settled, especially backlog of salaries and allowances, before the company can operate. German also confirms that the plant has been bogged down by demands of the ex-workers. “We met some rigid situations,” he says.
He says the basic reason the company has not resumed operations is the delay in bringing the ex-workers on board.
“These ex-workers are waiting, but these issues of liabilities are also there. We have about 100 of them working with us now,” he says.
“What we have been doing is trying to meet the demands of the ex-workers; those who worked with Global Infrastructure. You don’t just come and start work. They are demanding for the payment of debts owed the workers.”
According to German, who is also a gas engineer, the management of the company is almost done with the resuscitation of its rolling mill, after which other sectors such as Steel Melting Shop (SMS) would be revamped. But there are arguably no signs that the mill will start work anytime soon.
“We are resuscitating the rolling mill, we are going to buy billets or get them from outside the country,” he adds.
Pius says the steel plant management will not succeed by revamping the rolling mill first because “Delta Steel Company is an integrated plant”.
“You can’t revive the rolling mill that ought to come last in the line production first. It must be the last stage after they might have revived units like SMS and others. They can’t operate that plant; it is not a rolling mill.”
He alleges that the Indian investors have different plans for the plant. “They want to convert the building to a rice depot or a hotel,” he says. “You know they are Vaswani Brothers and we know their history in this country. They converted Volkwagen to rice depot.”
The payments of some debts by the Asset Management Corporation of Nigeria (AMCON) in April was needed for the management of Premium Steel to gain access to the plant and commence its resuscitation.
“We started that this year April and we have gone far. We are almost through with the rolling mill. One hundred and sixty workers are going to be employed for the rolling mills when it is operational.”
Despite all these commitments, the management of the company still has a lot of bridges to cover. A case before a Federal High Court, Warri Judicial Division, by Udu community, might be a major huddle to cross.
The host community says the details of the transaction between PSML and Bureau of Public Enterprise (BPE), which gave the company to the new investors, was not made open.
“We do not know the extent of purchase; we do not know what AMCON sold and what they didn’t,” says Sam Odibo, (Otota), Prime Minister of Udu Kingdom.
The communities claim they are stakeholders, having been allotted 22 million ordinary shares in the company, representing 10 percent of its total shares at its privatisation.
Part of their complaint, according to Odibe, is that the Federal Government has continued to shut them out in the privatisation process while dealing with the assets of Delta Steel.
“When BPE concessioned the company some years back, the community did not even know that they had some percentage to be paid because the Indian company, Global, ran the place solo,” he says.
“We say no; we want to know what they sold to you because AMCON sold what was used to borrow money from the bank. Did they reserve anything for the community or is it that they sold everything in spite of huge expanse of land the Federal Government took from us in the name of national interest. But we believe that the Federal Government would not be stupid to sell everything off.”
Before heading for court, the host communities said their efforts to get both the BPE and the AGF to account for the privatisation process were shrugged off. Now, they want the court to declare that they are entitled to 22,000,000 ordinary shares, representing 10 percent of the total shares of Delta Steel Company, and that both the BPE and the AGF have no right, power or authority whatsoever to sell or transfer to Premium Steel either directly or through any of the agents of the Federal Government of Nigeria, more than 80 percent of the shares of Delta Steel.
The court, they argue, should also declare any purported sale and/or transfer of more than 80 percent of the shares of Delta Steel to Premium Steel by the Federal Government, null and void.
“AMCON is done on the matter; they are not talking to us, same way nobody talked to us in the previous deal that allowed those Indians to run the place aground,” says Odibe.
“When that place was flourishing, they said it was federal character; northerners were there, southerners were there, but when it was ran aground, people accused us of folding our arms and being naive. We say no, before people accuse us again.”
The case is still ongoing. The communities want the court to issue an order restraining Premium Steel from continuing to take over the assets of Delta Steel without a valid sale and/or transfer of the company.
SHORTCHANGED BY AMCON AND PREMIUM STEEL AND MINES MANAGEMENT
Former workers who worked at the plant between 2005 and 2012 when Global Infrastructures Company unsuccessfully managed it are demanding the payment of their entitlements. The new investors will know no peace, they have vowed, until their debts are defrayed.
At the time the new investors took over from AMCON in April 2015, the company had a backlog of seven-year unpaid salaries, which the workers say was calculated to be N3.2billion — but AMCON says the amount is far less: N2.1billion.
Other liabilities, according to findings, are indebtedness to contractors put at N2.5billion, indebtedness to foreign suppliers placed at $4.4billion and liabilities to statutory bodies and corporate creditors such as Federal Inland Revenue Service (FIRS), which alone make up N12billion.
AMCON, it was gathered, has settled some of these liabilities, particularly debts owed the Benin Electricity Distribution Company (BEDC), which recently restored electricity to the plant after seven years of darkness.
The workers argue that the difference of N1.1billion was due to the omission of some names and figures in the report submitted by the consultant hired to compute their entitlements. They accuse AMCON of shortchanging them despite their years of sacrifice at the company.
Peace Oputu, Chairman of Iron and Steel Senior Staff Association of Nigeria, (ISSSAN), reveals that efforts to make AMCON adjust the figure to N3.2billion were fruitless.
“We [the workers] gathered ourselves and met with AMCON. We talked but the meeting was fruitless because they didn’t agree to our terms,” says Oputu, disappointed in how workers have been treated by the Federal Government after the collapse of the steel company.
“They calculated certain amount, N2.1billlion as what is owed DSC workers, but we have EDP that takes care of all expenditure and all the money that comes in for the company.
“When we met with the committee set up by Delta State government, we made it very clear to them that our money is much more than that.
“Then we calculated the money with the EDP, and came out with N3.2billion. This was what we took to AMCON in Lagos. AMCON said their own was just to acquire; they had paid the debts owed by the company and as a result, they did’t have any other thing to give us.
“They were just going to part with N600million, representing 22.5 percent of the N3.2billion. So, the meeting was deadlocked because we were not happy.”
While waiting for their entitlement, ICIR gathered that about 500 retired staff of the steel company died in the 13 years that followed, that is 2005 till date. This explains why, when AMCON came to disburse the N600million in March 2017, those still alive ignored the directive of Oputu-led ISSSAN and Steel and Engineering Workers Union of Nigeria (SEWUN) not to collect the money.
Though it was obvious that they had been underpaid, the workers, who were dying of hunger and sundry illnesses, could not resist the temptation of the AMCON payment.
“Hunger is there, you cannot tell anybody not to collect the money. We the union came out and instructed them that nobody should go out to receive it but the next day people went out. You can imagine the level of poverty among our people,” laments Oputu.
But ISSSAN and SEWUN are insisting on the payment of 100 percent allegedly agreed by the unions and AMCON, through its Receiver/Manager. They allege that AMCON acted without consulting them in the calculation and payment of “25 percent of their total entitlements”.
Adewale Okeshola, General Secretary of ISSSAN, laments that AMCON reneged on the agreements reached at the meeting with its receiver/manager.
“We later gathered that AMCON through the receiver/manager was holding meetings with some disgruntled elements within the workforce in DSC who paraded themselves as seeking the interest of the workers who have suffered delay in the payment of their salaries for over five years now,” he says.
“These groups, we gathered, entered into an unholy alliance with the management to short-change the workers in the payment of their terminal benefits. After a protracted wait, we were shocked that the workers had been paid 25 percent of their entitlements as final payment.
“This is not only a far cry from the agreement reached between the two unions and the receiver/manager appointed by AMCOM, but also unacceptable. We want to say that SEWUN and ISSSAN were not carried along in this decision. We have made several entreaties through correspondences to the concerned authorities to rescind this dehumanizing decision and honour every agreement both parties reached for the interest of peace and harmony. Up till now, our efforts have fallen on deaf ears, thereby creating tension and restiveness by workers.”
Efforts by the state government to intervene have yielded only little result, at least not in assuaging the worries of the aggrieved ex-workers.
A committee on Delta Steel Company Affairs set up by Ifeanyi Okowa, the Governor, and headed by Moses Odibo, wrote to President Muhammadu Buhari requesting a N5billion bailout for AMCON to offset the salaries and other indebtedness so that the company’s new owners could resume production in November 2016.
The amount requested was not released. Rather, the President, it was learnt, referred the letter to AMCON to defray the debt since that is its statutory responsibility.
A breakdown of the sought N5billion is as follows: N3.2billion for staff salaries, N1billion as part payment of N7.5billion indebtedness to PHCN/BEDC, N198.7million owed Nigerian Gas, N500million for general supplies and N58million to offset scrap supplies.
Despite these calculations, particularly the debt to workers, AMCON paid only 25 percent of N2.1billion that it said was the workers’ entitlement. The workers argue that from the time when the Federal Government took over the company from Global Infrastructure Company till date, no letter was given to any staff regarding disengagement, retirement or any related matter.
“Invariably, the government is not coming closer to us and we don’t know what is happening with this company for now,” laments Oputu.
“My members are working there because what gets to your mouth gets to your stomach. My people are dying in the township there. We lost minimum of three people every day. When the new investors came in, they made several publications that they were going to turn Delta Steel Company around, promising to spend billions of dollars.
“But today, that is not what we are seeing. If they don’t live on the account of the school they don’t survive. The proceeds from the schools are what they use to run the plant and one of the schools, school II, is grounded.
“We were over 5,000 when the company was working well, but we were reduced to almost 2,000 when Global Steel came in. Several people have died, more than 700 since 2011.”
Jude Nwauzor, Manager Corporate Affairs of AMCON, did not respond to questions on the allegation of short-changing the ex-workers. While he promised to get back, he referred the journalist to Joseph Nwobike, AMCON Receiver/Manager for the company.
In an SMS, Nwobike, a Senior Advocate of Nigeria (SAN), said he would not respond to gossips and unfounded allegations.
“Thank you for contacting me. I really do not respond to gossips and unfounded allegations. The records are there for all to see,” he simply said.
But when he was further asked to make the record available by this journalist, he went mum.
AMCON, though, says it ensured that all verified ex-workers who were eligible and also participated in the agency’s verification exercise were fully paid directly.
Following their inability to liquidate the debts they owed several banks, AMCON took over the assets and undertakings of Delta Steel Company Plc (DSC)/Global Infrastructure Nigeria Limited (GINL) and appointed a Senior Advocate of Nigeria (SAN), Ajibola Aribisala as the Receiver/Manager of the company.
However, in 2015, AMCON replaced Aribisala with Nwobike, who subsequently engaged the services of an audit firm to carry out a verification of the ex-staff.
“At the exercise, only those who were staff of DSC/GINL at the time of the take-over by AMCON were audited,” AMCOn said in the report. “At the conclusion of the exercise, Nwobike engaged the representatives of the staff — an engagement that led to an agreement to accept as full and final settlement of their outstanding salaries and gratuity, a percentage of the verified sums.”
It was however gathered that although the percentage agreed to be paid was below the staff’s expectation, AMCON said the arrangement was the best in the circumstance, seeing that DSC/GINL was insolvent.
According to AMCON, over 1,600 staff were screened and paid in the exercise, which lasted between March 13 and 31, 2017.
HUNGER, SICKNESS, DEATHS…THE PLIGHTS OF EX-WORKERS
“My wife dey house now, to eat dey hard us; na so so quarrel. I don’t know where to start from and I get seven children.”
That is the lamentation of Francis Agbonkaro, who worked at the plant as a plumber for 25 years.
With three university graduates and four undergraduates and a wife to cater to, life has not been easy for him since his retirement in 2005 from the company without the payment of his benefits.
The whole family, he reveals, lives on the petty trade run by his wife in the Steel Camp — the residential quarters constructed for staff of the company.
“Na my wife just dey do small small thing wey we take dey survive. I get seven children. Three graduate, four no graduate, dem don already finish secondary school because no money to sponsor them. I no fit calculate how much dem owe me,” he says.
But he is happy despite his poor condition of living because several of his colleagues who worked at the plant have died of hunger and treatable ailments.
“Population wey don die, dem no dey fit talk that one. I even fit say the population wey die dem plenty pass people wey dey alive. Some house dey here, the husband die, the wife die,” Agbonkaro continues in Pidgin, apparent signs of poverty all over him.
Still, he can be said to be lucky. His colleagues, Salami Omokha and Osifo Mathew, are already cursing the day they joined the steel company — they have lost their sights due to years of exposure to high temperature without protective gears as con-casters at the plant.
Omokha, who also retired from the company in 2005, was a melter of iron ore. “Melting has to do with converting iron ore, which has been reduced to direct iron, and then you convert them to liquid steel, you convert them to any grade of steel you want,” he explains.
Before iron ore can be converted, the melter must attain the temperature of about 1740 degree centigrade. That, Omokha says, was usually done by him and others in that section “and not that you have the safety devices to look at those things”.
“Those are the things we looked at and today now we are having the adverse effects; we cannot see.”
Trained in Germany and Italy for iron ore melting, he says 90 percent of those that worked there “have this problem I’m having now; the problem of sight”.
“I went to Germany and Italy in 1980 and 1981 where I was trained as an electro handler, melter, and caster. I trained many people on the job when I returned, and many of them today are happy to identify with us now that we gave them good training.”
Life after retirement has not been rosy, as according to him, “the situation after retirement is hopeless”.
“We are surviving through charity, particularly from friends who are better placed. My children are not grown up yet; even the ones that have graduated have no jobs. Our wives are the ones jumping from places to stones converting whatever they have to money. We are also hoping for a better tomorrow whether the Federal Government will remember us.
“We are not getting our retirement benefits. I’m in my condition now, the plant is also in its own condition; we don’t know who to speak for who. Whether the plant is to speak for me, because the plant is also in the same condition in which I am now; the plant is sick.
“I wish the Federal Government can have a little rethink and come back to that place to see exactly what they have there. They should not allow it go fallow the way it is now. People are there now but nothing meaningful is coming out of there. It is like the government is not taking the issue of Delta Steel Company serious.”
When reminded that the plant had been handed over to a private investor, he said: “How can you give the company to a private investor without following up, without knowing its profile and without know what they are doing there.
“The government is weak in this area. There are so many of their projects that are abandoned. Come to where we are residing in Township, schools have been abandoned, taken over by weeds. It is a nonchalant attitude by the government.”
On whether the Premium Steel and Mines Limited has the capacity to transform the moribund plant, Salami retorts: “Those are not steel makers, they are not steel makers. If they are steel makers we will know. The same government that allowed them in is the same government that owes us.
“My health challenges are numerous; one, I cannot see far objects. Doctors told me that there are cataracts in my eyes and these are the manifestations of areas where we worked. Again, the pains are there all over. Many of the people that worked with us have long died.
“Government should live up to its responsibility and pay us our money, our entitlements, so that we can also straighten our heads and maybe we can live longer. With better treatment, nobody will know that you are sick. Meaning that there is a solution to your problem. We have problems and the solution is there; only that we cannot afford it.
Of the trio, Osifo Mathew is the worst hit; he has been suffering from stroke and has lost his sight.
With his eyes wide opened though laced with mucous to suggest there are problems with them, Mathew could not recognize his friends. Twenty-five years of exposure to high temperature as a con-caster at the steel company is responsible for his battle with glaucoma.
With such debilitating health condition, he is also not paid his entitlement after retirement from the company.
Looking straight at this reporter as if he could actually see him, he says, “I worked at con-cast. We started the steel company and I was retired in 2005. But up till now, I have not collected my entitlement. I have problem with my eyes. In fact, when the eye problem started, I was first affected by stroke.
“The eyes have been bad for the past four years. They said they cannot operate it because it is glaucoma.
“They recommended drugs and eye drop. I can see just faintly. The last eye drop I bought was N9,000 and used it for two weeks.”
Osifo makes one final plea to the journalist: “I want government to pay my money so that I can treat myself. As you are talking to me now, I’m just looking at you like a film. I’m not seeing you; I can’t describe the shirt you are wearing.”