Brian Ó Domhnaill (Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The matter relates to the proposed sale of the harvesting rights of Coillte. This arises under the EU-IMF programme, which asked the Government to consider selling some State assets to realise a profit for the State. However, Mr. Peter Bacon's report in this regard is now complete and available to the Minister, and, in my view, it shows it does not make any sense to sell a perfectly profitable State asset that employs close to 12,000 people and controls some 450 hectares of forest.

I have read some, though not all, of the Bacon report. Mr. Bacon was employed on behalf of the Department of Agriculture, Food and the Marine. It is clear from his findings that this does not make sense. The Minister for Agriculture, Food and the Marine is on record in the Dáil as stating in November last that the potential sale of the harvesting rights of Coillte over an 80-year period would potentially raise ¤400 million to ¤500 million, although this has not been fully costed. I am not sure if that is dealt with in the Minister of State's response today but the Minister, Deputy Coveney is on record as saying it. However, the Bacon report clearly shows that in order for the sale of the harvesting rights to make any financial sense, it would have to raise at least ¤1.3 billion, so there is obviously a major difference, although it is open to the market to decide what the cost will be.

By selling the harvesting rights of Coillte, they are effectively being transferred into private hands. Coillte is a very profitable semi-State organisation that made profits of between ¤15 million and ¤20 million last year and a similar amount the year before. We should not go down the road of selling this profitable asset and we should keep it in State ownership. The Bacon report would clearly seem to rubber-stamp that position. In light of the Bacon report, is the Government reconsidering its position or has the report been fully assessed yet?

It is clear from reading the report that Mr. Bacon is suggesting the sale of the harvesting rights would have a number of major impacts, for which the costs can be estimated, and he has estimated those costs at approximately ¤1.3 billion. If we were not to realise that amount in the sale, not only is the Government relinquishing a major State asset but it is also jeopardising 12,000 jobs within Coillte. It would also have a major effect in my own county of Donegal, where Coillte plans to sell a large area of forestry outside Ballybofey, a plan that is meeting huge local discontent.

I call on the Minister and the Government to cease from any sale of any Coillte resources in light of the Bacon report, which is very clear. I have written to the chairman of the Oireachtas agriculture committee, Deputy Andrew Doyle, suggesting that the committee would carry out a full and comprehensive analysis and meet with all the stakeholders before any decision is taken. The Minister of State, Deputy O'Dowd, may have some news in this regard.

Fergus O'Dowd (Louth, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Gabhaim buíochas leis an Seanadóir Ó Domhnaill as ucht an t-ábhar seo a ardú inniu. I am taking this matter on behalf of the Minister for Agriculture, Food and the Marine, Deputy Simon Coveney.

Coillte was established as a private commercial company under the Forestry Act 1988, with the two shareholders being the Minister for Public Enterprise and the Minister for Agriculture. As the Senator is aware, the Government decided in the context of the State asset disposal programme that a concession for the harvesting rights to Coillte's forests be put forward for sale. I would like to add that this is but one element of the State asset disposal programme as decisions were taken in regard to other commercial state bodies. My colleague, the Minister for Public Expenditure and Reform, made a comprehensive statement to the Dáil in October 2011 about the sale of State assets, which gives the overall background. As responsibility for Coillte falls within the Minister, Deputy Coveney's remit, I will update the House on his behalf as to Coillte's element of the programme.

Further to the Government decision that a concession for the harvesting rights to Coillte's forests be put forward for sale, the NTMA, via its NewERA unit, has been actively engaged with Coillte, the Department of Public Expenditure and Reform and the Department of Agriculture, Food and the Marine to examine the financial and other implications of a potential transaction.

Substantial work has been undertaken to date on the identification of the forestry assets involved, the determination of their value and the consideration of a number of issues associated with the proposed sale of the harvesting rights. Some of the issues identified so far include public access to recreational land, the possible impact on the timber industry, environmental and social impacts and consequential implications for the company and levels of employment. I assure the House that a comprehensive analysis has been carried out of all relevant issues.

Consultation has also formed part of the consideration. NewERA, the Department of Public Expenditure and Reform and my Department have met interested stakeholders, including, on 25 January, the Coillte group of unions, to discuss their position on the sale of the harvesting rights. NewERA also met representatives of the Irish Timber Council last July to discuss the implications of any sale of Coillte felling rights for the sawmill sector. In addition, environmental and sports bodies have also given their views to the Minister and the Department of the proposed sale. At the meeting with the Coillte unions on 25 January a copy of the report, Assessment of the Consequences of the Proposed Sale of Coillte?s Timber Harvesting Rights, which was commissioned by IMPACT, compiled by Peter Bacon and Associates and published on 10 January was received. It is being analysed and a further meeting with the unions is to be held in due course.

NewERA is providing financial advice for the Government on this process on the basis of a comprehensive and detailed analysis. As the Senator will appreciate, the issues involved are commercially sensitive and NewERA is not in a position to comment publicly on them. All transactions managed by it, at the request of the Government, as part of the State asset disposal programme, including any sale of Coillte harvesting rights, will be conducted in a transparent manner in line with EU and-or national regulatory and legal guidelines for sales of assets.

The Government is very much aware of the economic and social benefits of forestry. This is evident from both the maintenance in 2013 of funding for the forestry programme and the important contribution Coillte makes to the supply of timber to the sawmills, in the provision of forest recreational activities and valuable tourism attractions and in the maintenance of the State's forest estate. The outcome of the overall analysis will be considered by the Government on its conclusion. This entire process is very complex and it is not possible at this stage to pre-empt the outcome of the analysis and its possible consequences for the future of Coillte. I reiterate that the Government will proceed with caution in this matter and that, as yet, no final decision has been taken.