Body criticises Coillte’s prices ‘uneconomic’ rates

THE “ignorance” of the State forestry service Coillte has left contractors on the brink of collapse, a report has claimed. Since the forestry industry switched over from chainsaws to harvesting machines costing €250,000 or more, contractors have invested heavily with the aid of EU grants.

But according to the preliminary findings of a report for the Irish Forestry Contractors Association (IFCA), the industry is now in crisis due to the “uneconomic rates” paid by Coillte for harvesting and hauling timber.

The average rate is €8 per tonne. But the report recommends this be raised to at least €13 per tonne. The State-owned company dominates the forestry industry and spends around €20 million on timber harvesting contracts and €10m on haulage.

The author of the report, JJ Bunyan, said contractors were working longer hours but were still not able to pay for their machinery, fuel and labour costs.

“I have spoken to 40 contractors around the country. A lot of them do not have insurance, which is mandatory, because they can’t afford it,” he said.

Mr Bunyan said the country’s 100 forestry contractors were at the mercy of Coillte’s ‘take it or leave it’ rates for their harvested timber. He accused Coillte of operating a payment system devoid of accountancy and transparency. The value of the timber to be harvested by contractors is estimated by Coillte in the field and then is weighed solely at timber-processing mills.

Mr Bunyan, who has recently been appointed as spokesman for the IFCA, said this system was open to abuse and added that a long-term plan for the industry was needed.

“Does Coillte want these contractors, who have put in years of investment, to go out of business?” he said.

Coillte said it was disappointed that the IFCA had chosen to go to the media rather than provide it with a copy of its report.

“From our point of view, record levels of timber are being harvested. It will be 2.8 million metres cubed this year and there’s twice as much work available as there was eight years ago,” said company secretary Gerry Egan.

Mr Egan said Coillte’s system for weighing timber was fair and that Mr Bunyan needed to provide solid data to back up his assertions. He strongly rejected the accusation that Coillte was underpaying contractors for their work.

“We pay competitive prices compared with other international countries. About 25% of our contracts are priced by tender and the balance are negotiated using those prices as a guide. It’s not a situation where Coillte is dictating the prices,” he said.