Selling off of forests

asherbassad

Don't know if anyone has seen this but I thought I'd post it here. Apologies if this is the wrong place:

https://www.youtube.com/watch?v=5g76uHk5O8E&feature=player_embedded

A scheme is a foot to sell off Ireland's forests (at a loss) to help "pay" the national debt.

andrew

Here's a document produced by IMPACT's Coillte section. I'd like to see a similar document regarding some of the advantages, does anyone know if one exists? I don't buy some of the concerns outlined in that document; for example, if all they're selling is harvesting rights, it doesn't seem to make sense that there'd be any impact on access to forests, since the state would still own the land people are accessing.

In addition, Coillte themselves admit that "Valuation of forest assets is a notoriously difficult process," but then go on to state that "it is inevitable that attainable prices will significantly understate the true worth of forest assets." It'd be nice if some of the claims they had were backed up by published figures and calculations, in an appendix perhaps.

Farmer Pudsey

The biggest fear is that who ever buys harvesting rights ma change supply situtation. This might be the case where a buyer may export a larger percentage. They may do this to develop a higher return.

This would be a double whammy it might make Irish processors unviable and leave a situtation where other Irish growers wuld have to export as well. As msot private forrestry is in the hand of small producers it is not them that ould recieve such a benifit.

Would like to see more figures on it not sure if it ie a good or bad move

Pete_Cavan

According to the 5 Year Performance on their website, Coillte returned dividends of €12.6m between the years 2007 - 2011. That is an average of just over €2.5m per year, that doesnt seem like a great return from over 1,000,000 acres. At that rate, were harvesting rights for 80 years sold for only €500m, the state would more than double its income. The IMPACT report is extremely light on figures so it is impossible to know what their conclusions are based on.

I would imagine a lot of their profit comes from Coillte Panel Products which accounts for more than 50% of the group turnover. This can be retained if necessary (not sure why the Irish government should be producing timber products but anyway). The company is organised into three divisions. Coillte Forest manages the forests. Coillte Panel Products manages the wood panel manufacturing businesses. Coillte Enterprises is responsible for land development, forest nurseries, renewable energy and identifying business opportunities Other income streams, such as communications masts, would be retained because they are on the land and nothing to do with the harvested trees which is for sale. Other benefits such as recreatational access and carbon offsets can also be retained because, again, they are not harvested trees. These issues would all have to be tied up in the contract. Panel Products and Enterprises can still be managed by Coillte even if harvesting rights are sold.

At the end of the day these forests are assets and should be used to yield the greatest return for the Irish people. And I would not limit that to the best financial return, there are social and environmental issues which must be taken into account as well. If selling harvesting rights ticks all the right boxes, then that is what should be done. I would take any notice of an IMPACT report, they are only interested in protecting their members, even at the expense of the average taxpayer.

Farmer Pudsey wrote: »

The biggest fear is that who ever buys harvesting rights ma change supply situtation. This might be the case where a buyer may export a larger percentage. They may do this to develop a higher return.

This would be a double whammy it might make Irish processors unviable and leave a situtation where other Irish growers wuld have to export as well. As msot private forrestry is in the hand of small producers it is not them that ould recieve such a benifit.

Would like to see more figures on it not sure if it ie a good or bad move

That is the main concern and where this movement could damage our economy. Although I cant see transporting unprocessed logs out of the country for processing as being economical due to the size, weight and bulkiness of it. With transport costs being so high, our nearest neighbours Britain are not that much cheaper than we are not that much cheaper than we are, plus we have the processing capacity in place already. The owners of sawmills may be able to buy some rights, or do deals with those who do, giving them more certainty. Of course that is all based on assumption, that is why a proper CBA needs to be undertaken.

RichardAnd

Pete_Cavan wrote: »

At the end of the day these forests are assets and should be used to yield the greatest return for the Irish people.

I haven't posted in some time but the quoted line struck something within me that I feel compelled to comment upon. The forests within this country are not an "asset", they are natural creations of nature and they support an environment all of their own. Human beings have got to understand that they don't own the land, they merely occupy it as future generations have just as much right to it as anyone living, as dos any other creature already living upon it.

The people of Ireland, and those elsewhere, are blighted by lull of immediate gains with no thought ever paid to the long term consequences. One very tangible example of how this can come back to bite would be the flooding that has worsened over the past number of years. If forests a cut down, the newly deforested land is liable to flooding and landslides as the trees and plant life are no longer able to hold the soil in place.

If the most auspicious gain from Ireland's forests is the goal, leave them where they are.

Forest Demon

RichardAnd wrote: »

I haven't posted in some time but the quoted line struck something within me that I feel compelled to comment upon. The forests within this country are not an "asset", they are natural creations of nature and they support an environment all of their own. Human beings have got to understand that they don't own the land, they merely occupy it as future generations have just as much right to it as anyone living, as dos any other creature already living upon it.

The people of Ireland, and those elsewhere, are blighted by lull of immediate gains with no thought ever paid to the long term consequences. One very tangible example of how this can come back to bite would be the flooding that has worsened over the past number of years. If forests a cut down, the newly deforested land is liable to flooding and landslides as the trees and plant life are no longer able to hold the soil in place.

If the most auspicious gain from Ireland's forests is the goal, leave them where they are.

Well said. I only wish more people thought like this.

andrew

RichardAnd wrote: »

I haven't posted in some time but the quoted line struck something within me that I feel compelled to comment upon. The forests within this country are not an "asset", they are natural creations of nature and they support an environment all of their own. Human beings have got to understand that they don't own the land, they merely occupy it as future generations have just as much right to it as anyone living, as dos any other creature already living upon it.

I'd argue that the forests specifically planted in order to be harvested for wood, are and always have been an 'Asset.' On the other hand, some forests are 'natural creations of nature' and should absolutely kept.

Logging rights as far as I know, refer to trees which were planted in order to be cut down again. Selling those rights doesn't change which trees will be cut down, only who's doing the cutting. It's not like the entire country will be deforested!

Farmer Pudsey

RichardAnd wrote: »

I haven't posted in some time but the quoted line struck something within me that I feel compelled to comment upon. The forests within this country are not an "asset", they are natural creations of nature and they support an environment all of their own. Human beings have got to understand that they don't own the land, they merely occupy it as future generations have just as much right to it as anyone living, as dos any other creature already living upon it.

The people of Ireland, and those elsewhere, are blighted by lull of immediate gains with no thought ever paid to the long term consequences. One very tangible example of how this can come back to bite would be the flooding that has worsened over the past number of years. If forests a cut down, the newly deforested land is liable to flooding and landslides as the trees and plant life are no longer able to hold the soil in place.

If the most auspicious gain from Ireland's forests is the goal, leave them where they are.

Commercial Forrestry has little ecoligical value in Ireland. Proper managment and harvesting reduces our carbon footprint. It is necessary to first thin and then harvest at the appropiate time. Then it is necessary to replant. In theory most forrest will have a life span of 50+ years so less than 2% would be felled and about 5% thinned at any one time so you have only 7% at most being interfered with at any one time.

The natural forrest of Ireland are a different matter some of these are allowed to regenrate naturally like Killarmey National Park. However I see no issue with the exploitation of commercial forrestry. If it was stopped all commercial planting would stop and as a country we have one of the lowest levels of aforrestion in Europe.

ardmacha

Forestry is a long term investment. It would be very unwise to take an excessively short term approach to selling it.

PRAF

I usually don't buy into the whole 'privatisation is bad, public owneship is good' agenda but IMO it would be a big mistake to sell off the forests (or more accurately the selling off of harvesting rights). The unintented consquenses and costs could far outweigh the benifits of selling.

antoobrien

PRAF wrote: »

I usually don't buy into the whole 'privatisation is bad, public owneship is good' agenda but IMO it would be a big mistake to sell off the forests (or more accurately the selling off of harvesting rights). The unintented consquenses and costs could far outweigh the benifits of selling.

That's true of any kind of rights sale. What basis do you have for any such fears, general mistrust or something more concrete?

antoobrien

Pete_Cavan wrote: »

According to the 5 Year Performance on their website, Coillte returned dividends of €12.6m between the years 2007 - 2011.

To me there's a more revealing piece of information buried in the notes, Coillte's foreign business provides about half of it's turnover.

It's a pity there's no breakdown of operating costs provided, as they are approx 80% turnover.

PRAF

antoobrien wrote: »

That's true of any kind of rights sale. What basis do you have for any such fears, general mistrust or something more concrete?

Firstly, I wouldn't agree that I have any fears on this, I do have some concerns on it!

The basis of those concerns is a simple cost / benefit / risk type of calculation. The benefits are relatively meagre (someone suggested 500m) and yet the potential costs and risks are massive (giving a third party access to over 1m acres of land) and include job losses for Irish timber mills and associated businesses, potential misuse of the land up to and inlcuding environmental damage which Ireland will need to address, reduction in access to Irish people, increased costs of monitoring the third party, etc.

If we were getting a few billion for it fair enough, I'd be more inclined to take the risk. However, for anything less than that the potential costs are just too high IMO.

If I do have any fears, it is more general and relates to the ability of our civil service / govt to get these type of decisions right. IMO they should look to sell off the retail element of ESB (not the energy producing part and certainly not the grid) before they look to sell off the forests. The economic case for doing so is clear but political ideology and union pressure will ensure that decision is put off for now

antoobrien

PRAF wrote: »

Firstly, I wouldn't agree that I have any fears on this, I do have some concerns on it!

The basis of those concerns is a simple cost / benefit / risk type of calculation. The benefits are relatively meagre (someone suggested 500m) and yet the potential costs and risks are massive (giving a third party access to over 1m acres of land) and include job losses for Irish timber mills and associated businesses, potential misuse of the land up to and inlcuding environmental damage which Ireland will need to address, reduction in access to Irish people, increased costs of monitoring the third party, etc.

It might be nitpicking with the (open to considerable abuse) interpretation of the English language, I'd describe those as fears not concerns as they are pretty severe consequences should they come through.

Given that we have only seen dividends of 12.6m for the time period 1999 - 2011, a €500m return for 80 years doesn't look meagre on the face of it.

Not to be disrespectful, but the kind of arguments I'm hearing trotted out are the usual knee-jerk reactions to any kind of proposed change we get in this country. What are the basis for your concerns, is it from hearing the mills et al. saying this (I've heard & read these arguments) or from international experience?

The biggest concern I'd have is not that any lumber sales would be moved aboard (costs of doing so would not be insignificant), but that it would force the prices up in order to make the business more profitable, especially if the operating costs can not be reduced.

PRAF wrote: »

IMO they should look to sell off the retail element of ESB (not the energy producing part and certainly not the grid) before they look to sell off the forests.

This is already under investigation, similarly the retail arm of Bord Gais and the National Lottery are being touted for sale.

PRAF

I agree that the dividends are pretty meagre and that something has to happen. However, what that 'something' is is clearly open to debate.

If I was managing a portfolio of assets and had to sell some of them, I would look to sell the assets which would yield me the highest returns with the least amount of risk. I'd agree with selling off the retail arms of the state owned utilities (however I think the unions may have blocked the sale of ESB with Labour's agreement) but not Coillte

For me, there are a number of high impact risk events which could arise post a sale of Coillte, which outweight the possible benefits of the sale. My gut feel is that Coillte's financial performance undersells what it does from a recreational and environmental perspective. I'm also convinced that it will start yeilding much higher returns once the constriction industry returns to more normal levels of activity.

I haven't done any detailed statistical research on this (hey, I'm a Boards poster not an academic!) but I have heard of many examples of botched privitisation of companies, private companies mismanaging land and causing massive pollution problems, private companies cutting off public access to land, etc. Why take the risk when the teturns are so low

antoobrien

PRAF wrote: »

For me, there are a number of high impact risk events which could arise post a sale of Coillte, which outweight the possible benefits of the sale. My gut feel is that Coillte's financial performance undersells what it does from a recreational and environmental perspective. I'm also convinced that it will start yeilding much higher returns once the constriction industry returns to more normal levels of activity.

Okay, but Coillte was established under the Forestry act and part of its remit is to help those things, so presumably any rights buyer would have to take up those functions - assuming that Coillte is being sold/privatised as opposed to the rights to say all the woods in Wicklow.

IMO the biggest problem we have right now is that there have been very few concrete proposals discussed in public (that I have heard of at any rate) and there's a lot of speculation about what might happen and how much they might get.

PRAF wrote: »

I haven't done any detailed statistical research on this (hey, I'm a Boards poster not an academic!) but I have heard of many examples of botched privitisation of companies, private companies mismanaging land and causing massive pollution problems, private companies cutting off public access to land, etc. Why take the risk when the teturns are so low

That's all I was looking for. Thanks.

PRAF

antoobrien wrote: »

Okay, but Coillte was established under the Forestry act and part of its remit is to help those things, so presumably any rights buyer would have to take up those functions

Perhaps you can reduce some of the downside risk by attaching obligations on the buyer. However, is that not self defeating because those obligations will reduce the attractiveness of the sale and therefore reduce the price it will achieve

antoobrien wrote: »

That's all I was looking for. Thanks.

Haha, very good. You might also now disclose the results of your detailed statsical analysis which conclusively proves that there are no downside risks associated with the sales of forests or havesting rights to same

What's that you say, you don't have any. That's all I was looking for. Thanks

antoobrien

PRAF wrote: »

Haha, very good. You might also now disclose the results of your detailed statsical analysis which conclusively proves that there are no downside risks associated with the sales of forests or havesting rights to same

What's that you say, you don't have any. That's all I was looking for. Thanks

Indeed I haven't, I'm just pointing out that all I'm seeing is the bog standard Irish knee jerk reaction, with the normal innuendos, vested interests, veiled references to catastrophic foreign failures and a "sure if they can't do it how can we?" attitude.

In other words, no good reason to support or reject the proposal.

PRAF

antoobrien wrote: »

Indeed I haven't, I'm just pointing out that all I'm seeing is the bog standard Irish knee jerk reaction, with the normal innuendos, vested interests, veiled references to catastrophic foreign failures and a "sure if they can't do it how can we?" attitude.

In other words, no good reason to support or reject the proposal.

I understand where you are coming from. I'd usually be the first person to complain about the 'not in my backyard', 'no to privitisation', 'no to change' kind of mentality. I'm generally pro-change, pro-privitisation, etc.

In this case, I really don't think that the potential benefits are enough to warrant taking on the risk. It just doesn't make any sense to me. I've been to a number of the Coillte forests and they are a great resource. There is a lot of untapped potential in terms of amenity value, tourism value, education value, as well as commercial value. They need to be better managed and promoted, not sold.

It's not like I'm saying no to everything. I am very much in favour of selling off the retail arms of the large publically owned utilities. I'd also be in favour of selling off RTE as well as some of the other public assets mentioned in the McCarthy report (as long as the price is right)

antoobrien

PRAF wrote: »

In this case, I really don't think that the potential benefits are enough to warrant taking on the risk. It just doesn't make any sense to me. I've been to a number of the Coillte forests and they are a great resource. There is a lot of untapped potential in terms of amenity value, tourism value, education value, as well as commercial value. They need to be better managed and promoted, not sold.

What doesn't make sense to be is saying that this isn't in our interests without understanding what is on the table. How do you know it isn't a full takeover of Coillte operations, which would mean that the amenity services provided (or not provided) would remain.

This debate is better placed in conspiracy theories because the facts regarding the proposal are few and far between.

PRAF

antoobrien wrote: »

What doesn't make sense to be is saying that this isn't in our interests without understanding what is on the table. How do you know it isn't a full takeover of Coillte operations, which would mean that the amenity services provided (or not provided) would remain.

This debate is better placed in conspiracy theories because the facts regarding the proposal are few and far between.

AFAIK what is being considered is a sale of harvesting rights. It would likely be a very long term lease of those rights. The precise details are of course not publically available.

I respectfully diagree that you can't take a stand on this one way or the other unless you are at the negotiating table. The likely benefits from a deal like this appear to be very low. There traditionally hasn't been a lot of money in these kinds of operations. This will mean you are unlikely to get a lot of money from a sale. Perhaps we get 500m. We can then pay 500m off the debt which might save us say 20-25m per annum on interest payments.

However, we are taking on the following risks:
- Loss on employment in timber mills and associated industries (increased social welfare payments)
- Loss of potential future revenue from amenity / tourism potential of the land if (as would be likely) a private company is less forthcoming than a public company in this regard
- Increased risk of environmental damage if (as has proved to be more than possible) the private company takes shortcuts with its compliance with environmental rules and regulations

I'm not saying that all of the above will definitely happen. I'm just saying that it could happen. And for 20m a year, I wouldn't like us to take the risk.

Now say we sell the retail arms of the large public utilities. We could probably raise billions (lets say 4b for arguments sake). That could save us 160m-200m a year in interest payments. Now we're taking real money. Also because you are not selling the network infrasrtucture or the generation assets, there is much less downside risk involved. More money, less risk. Easy!

antoobrien

PRAF wrote: »

AFAIK what is being considered is a sale of harvesting rights. It would likely be a very long term lease of those rights. The precise details are of course not publically available.

Funny the details on the sale of Bord Gais are.

PRAF wrote: »

I respectfully diagree that you can't take a stand on this one way or the other unless you are at the negotiating table.

That's not what I said, I said that most of the opinions publically available are based on vacuous rubbish. The Bacon report has it that "net
afforestation by Coillte has been negligible over the past decade", however since it was founded in 1989 it has increased the forested area by 25%. It takes a long time to create new forest, something that the economists don't seem to know enough or care enough to take account in their report.

PRAF wrote: »

The likely benefits from a deal like this appear to be very low.

Based on what exactly? You've admitted you don't know what the proposals are, so how can you say what the likely benefits are? You are only assuming that we get €500m for the rights, you have no idea how long for (i've seen 20-80 years mentioned or what other responsibilities will be applied.

Also if "CoillteNua" is made more profitable than Coillte, then there will be an increase in corporation tax (which it currently pays), so the benefits are not limited to a one time capital gain.

PRAF wrote: »

However, we are taking on the following risks:
- Loss on employment in timber mills and associated industries (increased social welfare payments)
- Loss of potential future revenue from amenity / tourism potential of the land if (as would be likely) a private company is less forthcoming than a public company in this regard

Those are the same arguments brought out every time there is a takeover of any local business - they'll stop using local suppliers, they stop selling locally. In most cases this amounts to no more than scaremongering and the new company is actually better at serving its customers than the older one was.

How will any sale affect the foreign Coillte business, which accounts for half of its revenue?

PRAF wrote: »

- Increased risk of environmental damage if (as has proved to be more than possible) the private company takes shortcuts with its compliance with environmental rules and regulations

Please provide the proof that privatised forestry has done damage to the environment in Europe (we can't exactly use the amazon as an example, because they don't have European laws to contend with).

PRAF wrote: »

I'm not saying that all of the above will definitely happen. I'm just saying that it could happen. And for 20m a year, I wouldn't like us to take the risk.

Now say we sell the retail arms of the large public utilities. We could probably raise billions (lets say 4b for arguments sake). That could save us 160m-200m a year in interest payments. Now we're taking real money.

Nope, you're quite firmly in fantasy land. They're hoping to sell BG for €1bn. That blows all your costings & savings right out of the water.

PRAF wrote: »

Also because you are not selling the network infrastructure or the generation assets, there is much less downside risk involved. More money, less risk. Easy!

The latest proposal for ESB is that they would sell some of the generating assets. How does that effect your risk profile?

The only good thing to come form the sale of Eircom (apart from the setting up of the NPRF) is the lesson that we can not sell the infrastructure and hope that private industry will invest in it.

Pete_Cavan

PRAF wrote: »

AFAIK what is being considered is a sale of harvesting rights. It would likely be a very long term lease of those rights. The precise details are of course not publically available.

I respectfully diagree that you can't take a stand on this one way or the other unless you are at the negotiating table. The likely benefits from a deal like this appear to be very low. There traditionally hasn't been a lot of money in these kinds of operations. This will mean you are unlikely to get a lot of money from a sale. Perhaps we get 500m. We can then pay 500m off the debt which might save us say 20-25m per annum on interest payments.

Little over a year ago Simon Coveney mentioned figures of between €1.1 and €1.8 billion to the Farmers Journal. In the same article he confirmed they do not intend to sell the land. I mentioned the figure of €500m just to show that even at half of the lower end of Coveneys estimate, selling harvesting rights would still double the states current rate of return. If we sold the rights for over a billion, not only would we get five times the current rate of return, but paying down debt would save on interest payments.

However, we are taking on the following risks:
- Loss on employment in timber mills and associated industries (increased social welfare payments)

Why does this risk increase depending on ownership? If Coillte operations support employment in timber mills and associated industries at the expense of more profitable alternatives (which would increase dividends to the exchequer), it could be argued that any increases in social welfare payments would be offset by reduced expenditure from Coillte.

- Loss of potential future revenue from amenity / tourism potential of the land if (as would be likely) a private company is less forthcoming than a public company in this regard

Private companies cant deny people access to something they do not own.

- Increased risk of environmental damage if (as has proved to be more than possible) the private company takes shortcuts with its compliance with environmental rules and regulations

The EPA will have to watch a private company as closely as they watch Coillte. Public ownership doesnt guarantee the highest levels of environmental protection, look at county council sewerage treatment plants. Look at the cryptosporidium outbreak in Galway.

I'm not saying that all of the above will definitely happen. I'm just saying that it could happen. And for 20m a year, I wouldn't like us to take the risk.

Now say we sell the retail arms of the large public utilities. We could probably raise billions (lets say 4b for arguments sake). That could save us 160m-200m a year in interest payments. Now we're taking real money. Also because you are not selling the network infrasrtucture or the generation assets, there is much less downside risk involved. More money, less risk. Easy!

I agree about the need to sell elements of other state assets (although I would sell electricity generation assets), not only would it raise money but would also increase competition in these areas. The forestry and timber processing industries may also benefit from more competition, which would happen if harvesting rights are sold in bundles, rather than one big package.

PRAF

antoobrien wrote: »

Funny the details on the sale of Bord Gais are.

You are being pedantic here. It is widely reported that this company is up for sale. The precise details of price, contractual issues, etc. (the very information on which the govt must base its risk / reward decision on) are not in the public domain.

antoobrien wrote: »

It takes a long time to create new forest, something that the economists don't seem to know enough or care enough to take account in their report.

I agree with this. I'm not sure how it supports your argument for a sale though?

antoobrien wrote: »

Based on what exactly? You've admitted you don't know what the proposals are, so how can you say what the likely benefits are? You are only assuming that we get €500m for the rights, you have no idea how long for (i've seen 20-80 years mentioned or what other responsibilities will be applied.

Nobody knows what the price would end up being if it is sold. It depends on what someone is willing to pay. I've seen a few estimates out there. I believe Bacon has estimated somewhere between 400 and 700m. However, if (as has been mooted) there will be various stipulations which will help protect timber mills, the environment, etc then the price will more than likely be at the lower end of that range and possibly even lower still. Estimates of 1.8b are a little fanciful I would say

antoobrien wrote: »

Also if "CoillteNua" is made more profitable than Coillte, then there will be an increase in corporation tax (which it currently pays), so the benefits are not limited to a one time capital gain.

You are presuming that "CoillteNua" will not be structured in order to minimise its tax bill. I doubt any additional corp tax will change the dynamics of the risk / reward decision all that much

antoobrien wrote: »

Those are the same arguments brought out every time there is a takeover of any local business - they'll stop using local suppliers, they stop selling locally. In most cases this amounts to no more than scaremongering and the new company is actually better at serving its customers than the older one was.

Why did the Brits decide not to do it?

antoobrien wrote: »

Please provide the proof that privatised forestry has done damage to the environment in Europe (we can't exactly use the amazon as an example, because they don't have European laws to contend with).

The amazon is a great example. For a more local example, look around the country. We are one of the least forested nations in Europe. We are also a country with one of the worst records in terms of sustaining biodiversity. On what level will privatising forest help to turn that around?

antoobrien

PRAF wrote: »

You are being pedantic here. It is widely reported that this company is up for sale. The precise details of price, contractual issues, etc. (the very information on which the govt must base its risk / reward decision on) are not in the public domain.

The retail arm is for sale, this is well know. It is well know what the retail arm does. The extent of the forestry sale is not known, merely hinted at.

PRAF wrote: »

I agree with this. I'm not sure how it supports your argument for a sale though?

I'm not arguing for a sale, I'm poking holes in arguments that don't hold air.

PRAF wrote: »

Nobody knows what the price would end up being if it is sold. It depends on what someone is willing to pay. I've seen a few estimates out there. I believe Bacon has estimated somewhere between 400 and 700m. However, if (as has been mooted) there will be various stipulations which will help protect timber mills, the environment, etc then the price will more than likely be at the lower end of that range and possibly even lower still. Estimates of 1.8b are a little fanciful I would say

Without having any idea what is on offer e.g. what you have just stated any valuation is fanciful.

PRAF wrote: »

You are presuming that "CoillteNua" will not be structured in order to minimise its tax bill. I doubt any additional corp tax will change the dynamics of the risk / reward decision all that much

You're assuming that it's not already set up that way (judging by the accounts it is).

PRAF wrote: »

Why did the Brits decide not to do it?

It being what exactly?

PRAF wrote: »

The amazon is a great example. For a more local example, look around the country. We are one of the least forested nations in Europe. We are also a country with one of the worst records in terms of sustaining biodiversity. On what level will privatising forest help to turn that around?

The amazon is a terrible example because it is not subject to any of the kinds of environmental law we have here in the EU. You are aware that it's practically impossible to dig a drainage ditch west of the corrib now right?

PRAF

Pete_Cavan wrote: »

Why does this risk increase depending on ownership?

You would be selling something which has substantial amenity, recreational, environmental, and commercial value. But you would be selling it on the basis of its commercial value only (i.e. any sale would by its very nature be undervaluing the asset). You would be selling it to a private company which is legally bound to maximise shareholder value (i.e. commercial value) and which has no mandate to maximise amenity, recreational, or environmental benifits for wider society. This fundamentally changes the dynamic.

Pete_Cavan wrote: »

If Coillte operations support employment in timber mills and associated industries at the expense of more profitable alternatives (which would increase dividends to the exchequer), it could be argued that any increases in social welfare payments would be offset by reduced expenditure from Coillte.

Perhaps you are right. However, Irish wages are taxed based on Income tax schedules which have higher rates than those that apply to Corporation tax schedules. You would be losing income tax AND increasing social welfare payments and hoping that increased corp tax covers the difference. Unlikely IMO

Pete_Cavan wrote: »

Private companies cant deny people access to something they do not own.

Agreed but they can determine the basis on which they work the land which they have harversting rights for. This could mean cordoning off much larger tracks of land for harvesting, 'temporarily' closing off roads / trails, etc. Surely you must agree that the outlook for public access to the lands would be much less rosy post privitisation

Pete_Cavan wrote: »

The EPA will have to watch a private company as closely as they watch Coillte. Public ownership doesnt guarantee the highest levels of environmental protection, look at county council sewerage treatment plants. Look at the cryptosporidium outbreak in Galway.

THe EPA is already undermanned and underfunded. It isn't resourced to take on these kinds of additional risks. We could increase resources to the EPA but again that would change the dynamics of the risk / reward decision making it even less attractive to sell

PRAF

antoobrien wrote: »

The retail arm is for sale, this is well know. It is well know what the retail arm does. The extent of the forestry sale is not known, merely hinted at.




I'm not arguing for a sale, I'm poking holes in arguments that don't hold air.




Without having any idea what is on offer e.g. what you have just stated any valuation is fanciful.




You're assuming that it's not already set up that way (judging by the accounts it is).




It being what exactly?



The amazon is a terrible example because it is not subject to any of the kinds of environmental law we have here in the EU. You are aware that it's practically impossible to dig a drainage ditch west of the corrib now right?

What would you like to see happen? My clearly stated view is that the benefits (at least the benefits that have been mentioned) are not enough to justify the risks involved. If we could get 1.5b plus AND get the required safeguards, then fine, you could twist my arm on this. I just can't see that happening though

Also, you must remember that there are a menu of options here (as per the McCarthy report). The govt has a portfolio of assets. My concern is that because trees don't vote but fully paid up members of unions do, the govt will go for the easy option of selling the forests rather than selling the ESB

The govt will work based on a political risk vs political reward equation whereas it should be based on the overall risk and rewards for the entire country.

antoobrien

PRAF wrote: »

What would you like to see happen? My clearly stated view is that the benefits (at least the benefits that have been mentioned) are not enough to justify the risks involved. If we could get 1.5b plus AND get the required safeguards, then fine, you could twist my arm on this. I just can't see that happening though

I'd like to see Collite/it's replacement contributing more financially to the country through the commercial efforts. The method of attaining this (i.e. public/private ownership of rights etc) is of no particular interest to me. Getting average of about €3.5m (including taxes) isn't good enough.

PRAF wrote: »

Also, you must remember that there are a menu of options here (as per the McCarthy report). The govt has a portfolio of assets. My concern is that because trees don't vote but fully paid up members of unions do, the govt will go for the easy option of selling the forests rather than selling the ESB

Both will be sold. The unions won't get a veto on the sale of the ESB any more than the CWU were listened to when it was proposed that Bord Telecom Eireann should be floated (among other things they wanted a significantly lower floatation price).

PRAF wrote: »

The govt will work based on a political risk vs political reward equation whereas it should be based on the overall risk and rewards for the entire country.

In this case that is one and the same thing. If the safeguards are not strong enough, it will be a political disaster. If it causes job losses or prices to rise, it will be a political disaster.

Hell the mere mention of selling any state asset is a political disaster. There is no way the government can come out of this with in a better political position, bar selling the rights for something ridiculous i.e. twice as much or more than any of the valuations mentioned.