THE PROPOSED SALE of Coillte harvesting rights has come in for further criticism with a warning that it would lead to the closure of all ten of Ireland’s sawmills and the loss of as many as 2,500 jobs.
In a report published today the Irish Timber Council (ITC), the representative body for the country’s sawmills, says that it “makes no sense” for the government to proceed with the sale of the harvesting rights on Coillte land.
“We’re extremely worried that should this sale of the harvesting licence go ahead sawmills will be closed and jobs will be lost,” ITC chairman Pat Glennon told TheJournal.ie today.
The government has committed to selling felling rights in order to raise money to pay off State debt and intends to publish legislation to aid the “development of a modern forestry sector” in the coming months.
The ITC’s intervention is the latest to be critical of the plan. Last month, economist Peter Bacon said the government’s plan “no longer stands up and cannot be justified”.
By coincidence, the Dáil will later today debate a motion put forward by independent TDs that demands the government abandon its plans to sell-off harvesting rights as well as accelerate tree planting to meet an EU-agreed target of 30 per cent forestation across the country.
The ITC says that the sawmill sector accounts for €2.2 billion of the economy annually and warns that selling off harvesting rights would see the purchaser export all of the available logs.
Glennon said that the country’s ten sawmills are “totally dependent” on Coillte for its supply of raw material and pointed out that sawmills in Ireland already pay a premium for the material.
“We’re paying 29 per cent more than mills in the UK so the government is extracting maximum amounts for harvesting rights anyway,” Glennon claimed, adding that “mills will definitely close and jobs will be lost” if the government pursues its plans.
“All these jobs are in very rural, remote areas and the prospects of other employment coming in [to these areas] will be very remote,” he said this afternoon.
Coillite owns 7 per cent of Ireland’s land – around 1.2 million acres – but has debts in the region of €180 million and any sale will require that some proceeds of the sale pay off this debt in addition to paying down the State’s debt.
The government has committed to selling off some state assets in a bid to raise around €3 billion in order to meet the targets set down in the EU/IMF bailout agreement.
Earlier Glennon said in a statement: “Any purchaser of the harvesting rights is naturally going to take advantage of this and increase prices further in order to secure a quick return on their investment.
“There is no room for sawmill operators to absorb any level of price increase and the consequence is that sawmills could close with important employment being lost in rural areas.”
The ITC also claims in its report that the sale of harvesting rights would fall “well short of the mooted valuation of €400 million to €600 million”.
The report concludes: “This is an enforced sale with few if any net proven benefits to the Irish economy, the general taxpayers and certainly of no obvious benefit to the forestry or the sawmill sectors.
The report says that if the government does proceed with the sale then provisions must be put in place to protect the supply to Irish sawmills.
Glennon told TheJournal.ie that he recognised the need for the government to raise funds but said that the coalition should not be “penny-wise and pound-foolish”. More forestation would in time “provide a better source of income to the government long-term”, he claimed.
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