A report reaching the Daily Observer suggests that the scrap deal between and Sethi Ferro Fabric and the Nimba County Authority is said to be in violation of section 55(3) of the Public Procurement and Concessions Commission/PPCC.
According to a report in possession of this newspaper, signed by PPCC Executive Director James Dorbor Jallah and dated March 13, 2018, the PPCC said, “the commission hereby informs you that the contract between the Nimba County Administration and Sethi Ferro Fabrik (SFF) was not approved by the PPCC and is in violation of section 55(3) of the Public Procurement and Concession Act (PPCA).
The PPCC further went to say, “Our review of the records shows that the first contract was signed on July 2017 and the second contract was signed on August 23, 2017, both without any reference to PPCC and in violation of the law; and PPCC was first contacted more than one month after the signing of the contract and about one week after the signing of the second contract by the Ministry of Justice and the National Investment Commission, on August 28, 2017.”
The report, made available to the public upon the request of the National Civil Society Council, Nimba Chapter, indicated that the awarding of scraps to Sethi was at US$60 per ton, when the price per ton of scrap ranged between US$75 and US$85, which averaged about US$80 per ton, was not in the best interest of Nimba County.
According to Superintendent Dorr Cooper’s report on the Sethi/Nimba Scrap deal, the Government of Liberia in 2017 requested Nimba County to allow Sethi Ferro Fabrik, who was building a mini steel factory in Monrovia, to purchase the remaining scraps for the production of steel rods and other metal items for the construction market.
He said in the agreement, about 450,000 tons of scrap were awarded for Sethi Ferro Fabrik to purchase each ton for US$60. The government initially decided to take more than 25% of the proceeds but, after some negotiation, it was reduced to 15%, while the balance 85% remained with Nimba county.
The scrap issue has been one of the stickiest issues in the Nimba County, since the building materials dealer, Sethi Brothers, parent company of Sethi Ferro Fabrik, began mining the controversial scrap metal in the Yekepa concession area held by ArcelorMittal Liberia.
The two companies involved in the mining of the scraps were Northstar and the Sethi Ferro Fabrick. Northstar, a local vendor, earlier went through a competitive bidding process against a Ghanaian vendor known as Western Steel, and won the bid for a higher price of US$72 per ton.
Due to some wrangling because of political interests on either side, Western Steel disputed the bid result and the two companies ended up at the Supreme Court, where Northstar emerged victorious, with full rights to carry on the scrap mining. But before they could begin, Sethi Brothers surprisingly appeared with a mandate from the Government of Liberia, backed by the Justice Minister at the time, Frederick Churue, who made a surprise visit to Nimba to explain the Sethi deal.
Superintendent Cooper said the deal concerning Sethi was done in writing and with the consent of the Nimba County Legislative Caucus. Yet, the issue remains widely discussed in the county, especially now, as the news of Cooper’s expression of interest to contest in the next senatorial election.
When both Sethi and Northstar began the mining of the scrap in 2017, a committee was set up to monitor the weigh bridge and ascertain the amount of scrap leaving the county by both companies. However, in the recent County Council Sitting, earlier this week, the weigh bridge monitoring committee was dissolved and the county leadership asked to formulate a new committee comprising representatives from the 9 electoral districts.
Critics argue that, because of the US$60 per ton paid by Sethi Ferro Fabrik, the contract is in violation of section 12.7 of the incentive agreement the company signed with the Government of Liberia, which says, “the government will make reasonable effort to ensure scrap metal, raw material to be used will be available at reasonable and price and competitive rates before export is allowed.”