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Plantation sales ‘unchartered territory’

Posted on November 12, 2009, 10:10am

Executives of ForestrySA are still seeking answers to questions resulting from Treasurer Kevin Foley’s proposal to investigate a forward sale of up to three rotations of the state’s pine plantations, predominantly based in the South East.

Mr Foley suggested in December last year the concept be investigated as a potential way to secure capital investment to support the state’s international credit rating as preparations are made for major infrastructure investment in Adelaide.

ForestrySA chairman John Ross wrote in the corporation’s annual report, published online yesterday, the executive was cooperating with treasury officials and consultants to investigate aspects of the concept.

“A sale of this type potentially has a term of up to 100 years and would take ForestrySA into uncharted territory,” Mr Ross wrote.

“Funding bodies with the capacity to purchase our production for 100 years in advance presumably would seek a discount reflecting their commercial risk and their cost of funds.”

Meanwhile, Mr Ross has hit out at State Government legislation, introduced to protect the region’s vital groundwater resource — the unconfined aquifer.

He said the legislation would limit investment in future growth and re-establishment if it was passed in parliament.

“Compliance with the National Water Initiative is important, however, its principles need to be applied equitably and the science supporting the proposed legislation requires much more vigorous debate and industry consultation,” he wrote.

He also called on the Federal Government to support the Green Triangle Freight Action Plan to fund key transport infrastructure, including routes to the Port of Portland, which was the key for regional industries to continue being competitive.

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