Sale of forest's to begin

Press, 24 October 1989, Page 3

Sale of forest's to begin

By

Pattrick Smellie

in Wellington

The sell-off of Governmentowned forests will begin in earnest this week, with the release tomorrow of an information memorandum for potential buyers. Sale of at least parts of Stateowned forest resource is an important element in this year’s budget surplus extimate of around $2.75 billion. Sales will need to be completed by the end of June next year to count for this year’s Budget. The Minister of State Owned Enterprises, Mr Rodger, recently told a select committee it would take between six and nine months for sales to occur after issuing the information memorandum.

Legal permission to sell State forests was granted last week, with the passage of the Crown Forest Assets Bill. The bill was introduced into Parliament on Budget night in July, and was rushed through the Parliamentary process without reference to a select committee for public scrutiny. However, concerns from environmental groups and the Parliamentary Commissioner for the Environment saw changes to some parts of the bill. Treasury sources said no firm valuation for the forests existed. Argument between the Government and the Forestry corporation over their value was one of the reasons the forests were never formally transferred to the corporation’s ownership. The corporation has managed the forest resource since its establishment in April, 1987.

Expected returns from the 588,168 hectares of forest were between $2 million and $3 million, one source said.

The sale of State forests was announced in the 1988 Budget.