Image for IGA money flows to Gunns, FT ... contractors zilch. As Gunns sells water rights

Forestry Tasmania and Gunns have received their financial settlements under the agreement to end logging in most public native forests, as struggling contractors cry poor.

A total of $34.5 million has been handed over to Gunns and the state-owned timber company under the $276 million Intergovernmental Forest Agreement (IGA).

The private timber company gets $23 million dollars to relinquish its residual rights over Tasmania’s native forests.

The $11.5 million dollar balance is being paid out to settle a debt dispute between Gunns and FT.

The State Government has revealed the funds are being drawn from a $7 million annual funding pool for the management of new reserves created under the IGA, and a $5 million fund set up to consult regional communities affected by the industry restructure.

In the meantime forest contractors who want to leave the native forest industry are still waiting to apply for compensation.

The payments have been delivered, despite the Premier Lara Giddings last week declaring no money should flow to Gunns or FT before the compensation system is open to contractors.

The Federal Government has indicated Tasmania’s Forest Contractor Association is holding up the process.

A spokeswoman says the Government is close to finalising the details of assessment criteria and is awaiting a response from the TFCA.

Meanwhile, the Australian Greens Senator Bob Brown has reacted angrily to the Forestry Tasmania payout.

The Greens wanted the settlement withheld until FT stops logging forest coupes set for protection under the IGA.

Senator Brown says it is a breach of the commitment made by the Premier and Prime Minister.

“Never more clearly than today when a taxpayers cheque has been handed over for 11 and a half million dollars to Forestry Tasmania to continue destroying the very thing these two leaders said would stop when they signed that piece of paper,” said Senator Brown.

Gunns shares have taken another battering in trading today in line with the overall sharemarket.

The stock fell to a record low of 15 cents, before closing slightly higher at 15.5 cents.

ABC Online HERE

• Alison Andrews, Chief Reporter, The Examiner:

Gunns’ water up for sale
BY ALISON ANDREWS CHIEF REPORTER
24 Sep, 2011 12:00 AM

FORESTRY company Gunns is selling more than 28,000 megalitres in water rights.

Launceston real estate agent Harcourts announced the sale yesterday.

Harcourts Rural director John Hewitt said he believed it was the biggest offering of private water for sale in the state.

“We are expecting it to set a bit of a benchmark in Tasmania,” Mr Hewitt said.

It was difficult to set a value on the water rights because they had not been traded before, he said.

“Irrigators are paying $1100 a megalitre off dams but these are not the same surety - they are lower surety,” Mr Hewitt said.

The water rights are from rivers across Northern Tasmania with large rights on the South Esk and Arthur River catchments.

The licences vary from 16 megalitres to 15,860 megalitres.

A Launceston auction, on November 4, will deal with 10 direct-take licences while tenders will close on November 11 for interest in 24,917 megalitres in the Arthur and Emu River catchments.

Mr Hewitt said the balance of the water rights, mostly storage, would be offered for private sale in the coming weeks.

He said water rights did not have to be attached to property but Gunns’ rights were mostly off plantation blocks the company was no longer using.

“This will enable other farmers to take up the water,” he said.

Gunns shares continued to nosedive yesterday.

Gunns resumed trading at the start of this week after more than a month out of the market with an opening price of 20.5 cents a share.

Gunns shares closed at 15 cents yesterday - an all-time low - after more than 18.5 million shares were traded.

Examiner HERE