Impact yesterday claimed that the controversial proposal to put the assets of the State-owned forestry company on sale made no economic sense based on the findings of research it had commissioned.
A report by economist Peter Bacon claims the overall result of the proposal would effectively liquidate Coillte as a viable, commercial entity. It concluded that the Government would need to obtain more than €1.3bn for the sale of harvesting rights for an 80-year period to compensate Coillte adequately. However, Mr Bacon said the Government would need to sell such rights for €78 per cubic metre — far above current market levels of between €43 and €50 per cubic metre.
He said the plan to sell off the harvesting rights would generate less return for the Exchequer than if Coillte was allowed to continue with its existing policy and operations.
It is understood that the Government will receive recommendations from its advisors about the future of Coillte in the course of the next few weeks.
Mr Bacon said the proposal, if sanctioned by the Government, could effectively leave Coillte operating as “some kind of parks and wildlife service”.
He warned that such a sale had the potential to disrupt the Irish timber processing sector due to a lack of certainty over future supply, while potential job losses would also add to future cost to the State.
The Government announced in June that it had made a decision to sell Coillte’s harvesting rights as part of the bailout conditions set by the troika to sell off State assets that strategically did not need to remain under State control.
It is believed that a number of parties have expressed interest in acquiring Coillte’s harvesting rights, including a joint venture firm, International Forestry fund chaired by former taoiseach Bertie Ahern.
Impact spokesman Johnny Fox said the report’s findings fundamentally undermined the Government’s only rationale for selling off Coillte’s harvesting rights.
Mr Fox said any such sale could also drastically limit public access to the countryside, undermine the quality of Ireland’s woodland and damage our world-class forestry.
A spokesperson for NewERA — the specialist unit established within NAma to advise the Government on the sale of State assets — said it had been actively engaged with Coillte, the Department of Public Expenditure and Reform and the Department of Agriculture over recent months to examine the financial and other implications of the potential sale.
He confirmed that the advisors had also engaged with potential bidders for Coillte’s harvesting rights at their request, but declined to comment further.