Tom Fleming (Kerry South, Independent) | Oireachtas source

Coillte controls 11% of the landmass of the Republic of Ireland. Our climate is ideal for soft wood trees and we have three times the growth rate of the European continent and Scandinavia, where the average amount of forested land is close to 40% of total landmass. The potential of Coillte is unexploited here. The State has set a target of 17% afforestation by 2035 and Coillte, the forest service and Teagasc are endeavouring to promote afforestation schemes to farmers and landowners. An intensive and strategic approach should make it possible to extend the planted landmass to over 30% by 2035, doubling the targeted 17%.

Unarable land prices have plummeted since the boom and this is now an ideal time to for the State to invest, dramatically develop afforestation and cater for the growing market demand for timber. The Irish sawmilling sector employs 2,500 people and is an integral part of the Irish forest products sector, which employs 12,000 people in total and generates approximately €2.2 billion annually, approximately 1.3% of GDP. The majority of jobs within the sector are located in rural areas where this indigenous product is a boon to local economies. Tourism and recreation are major beneficiaries of our forest resource, which is ready made for nature trials, hiking and biking, which are enjoyed by young and old alike. Walking is a very popular visitor attraction here and Coillte, with over 7% of the landmass, operates an open door policy of its ready made natural amenity. Hikers are free to use Coillte forests for recreational purposes at all times. Increased afforestation also helps the environment, specifically in the context of carbon storage. Trees remove CO2 from the atmosphere and release oxygen, counteracting the greenhouse effect and helping towards Ireland's commitment under the Kyoto protocol.

The trade union IMPACT recently commissioned economist Peter Bacon to draft a report on the sale of the Coillte assets. He claimed this sale makes no financial sense and amounts to a liquidation of the profitable asset. This independent report of the sale is based on a possible scenario that would involve rights to 75% of Coillte production being sold for an 80-year term. The report states the sale would effectively liquidate Coillte as a viable commercial entity. A price of €1.3 billion would be needed to make up for the loss of 80 years of profits and Coillte would need to sell at €78 per square metre, well above current or recent prices, to cover all of the liabilities associated with the company. This occurs because privatisation would mean the loss to the State of the future Coillte profits, the loss of amenity value of State owned forestry and because of the company's debt of €172 million which must be repaid. In addition, there is an employee pension deficit of €130 million, which will most likely have to be met by the Exchequer if Coillte is sold.

A sale would raise cash up front but it would end up costing taxpayers over the long term. Under new owners the timber from the forests, which is currently processed in Ireland, could be exported for finishing abroad, resulting in job losses.

The report also stated the sale of Coillte would raise enough cash to repay three weeks of interest on the national debt, if half of the proceeds went towards servicing the debt. It also stated the half share earmarked for infrastructural projects could generate a 6.5% return, but that would be less than the return from holding on to Coillte. For these valid reasons, we must retain our harvesting rights. It would be folly to do otherwise.

I would like to conclude by mentioning an initiative in my constituency involving the production of wood chip by farmers. A wood chip boiler was recently installed in the new Kenmare Community Hospital. This is a wonderful advancement. The farmers are also supplying this low cost fuel to the domestic sector, including many local houses. It is a great boon for everybody and good for the environment.

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