Gunns are getting worried. John Gay is in Europe trying to raise finance, but if he can’t get water, there will be no pulp mill. They are now trying to buy the land right easements that the pipelines will cross at enhanced prices. They appear to desperate. I doubt whether many will sell, but what it does is to give them a value if ever compulsory purchase rears its head.

Even if compulsory purchase comes about, it can be challenged in the High Court, and any delays, regardless of the outcome, will put a huge obstacle in the way of obtaining the necessary finance, and the contracts for sovereign risk compensation and the two timber supply agreements, even with extensions, will run out sometime. And then Carbon Trading could kick in, putting the price of timber beyond what is commercially viable for them. The delay for any legal decision may also put it beyond the next election date!

One worrying thought is that Gunns has tax-free funds at their disposal via their MIS schemes and they will probably try to buy this land and also make a profit from the transaction by transforming the farms etc into plantations. Even if they manage this, we eventually foot the bill in our lost tax revenues,  with increased monies going offshore and the timber going to Gunns at the expense of our farmland.

It is strange, that without water, Gunns’ pulp mill is the one project that definitely can be sunk!