Green Triangle forestry company crashes, puts contractors on hold

The industry that has divided public opinion across rural Australia, came into being in August 1995, when senior industry figures met with commonwealth ministers to argue the case for an escalation in the plantation estate, to offset the rapidly declining harvest allowed from native forests.
The result was the Plantation 20/20 Vision which would see the plantation estate triple in 20 years. The plan was for plantation prospectus companies to plant 3 million hectares before 2020. Taxation incentives were made available for potential investors leading to strong campaigns by other rural land users protesting against unfair tax advantages for investors who could claim costs in the current financial year.
Attractive incentives
These incentives were immediately attractive to high earning individuals who, faced with the choice of paying their tax bill to the government or investing in the managed investment schemes, decided in droves on the latter. (The global financial crisis and less high earners conversely contributed significantly to the cash flow drought that put the 2 companies into administration) Thus there was a steady supply of funds for the purchase of land and establishment of blue gum plantations. This occurred predominantly in SW West Australia and the Green Triangle (the southern border area of SA and Victoria).
Blue gums are sold as woodchips for high quality paper production and harvesting started in WA around 3 years ago. The 3 major companies in the Green Triangle, Great Southern, Timbercorp and Integrated Tree Cropping, were due to come online in 2010.
Putting aside the criticisms of the industry from the farming fraternity which argues that productive farmland is being taken away for tree production, with resultant rural depopulation, there have been some huge economic benefits for the region – and certainly for contractors as all the major players contract virtually all work programs. Many contractors have benefited from the establishment of the plantation estate, which is now ready for harvesting and subsequent re-establishment, and has reached the a level of ongoing sustainability with rotations every 10 to 12 years
1000 harvest jobs
However the big benefits for contractors and suppliers, were ahead with the forthcoming harvest, widely reported in the region to create an extra 1000 jobs. Apart from harvesting contractors, those involved in roadworks would benefit from an accelerated state and local government roading program, together with road and infrastructure construction in plantations. And the $50m port development where a 4ha area was put aside to construct the export woodchip loading facility
Now all is on hold as administrators and receivers try to untangle the complex projects and sell off assets. Tasmanian forestry giant Gunns, has reportedly come to an agreement with the Port of Portland, to construct the export facility. Who ends up with the plantations is anyone’s guess at this stage although I would think that they would be very attractive to the major forestry companies
However, many skeptics say the industry will never work, plantations will be reverted to farmland, the port will never be able to handle the proposed volumes etc. etc.
For mine the process is simply put back at least 2 years while new ownership is established. Meanwhile those trees just keep on growing – and growing ….
(NB the writer is a former employee of Great Southern Ltd)

The economic stimulus package
I was going to have a look at what is required, to register as a contractor to tender for some of the work, that is coming out as part of the above package. After some recent media criticism, I came to the conclusion that there is no simple answer, as different programs have different authorities as responsible entities. However, a wander around the various federal government websites, certainly gives some credence to the federal opposition’s objections, about the government’s public relations campaign: blatant political advertising they say!
Well, be that as it may. If you want to know where the money is being spent and who controls it, follow the prompts – right to your state, town, suburb or district.
Quite impressive. Whilst browsing I came across the latest information on the Department of Infrastructure, Transport, Regional Development and Local Government site which tells us – “The Australian Government is investing $26.7bn on road and rail infrastructure through the Nation Building Program over the six year period from 2008-09 to 2013-14. This is unprecedented investment by a Commonwealth Government in land transport.” And then it goes on with links to the various programs. Very neat!
In fact whilst writing this, up came the latest announcement. The $200m Melton to Bacchus Marsh section of the Western Freeway, is a step closer to construction, with the alliance partners being announced. John Holland and AECOM will join VicRoads to build the new freeway connection. (See page 9, this issue).
In case, like me, you are wondering who AECOM is, their website says: “From today ECOM’s Maunsell AECOM, Bassett, ENSR Australia and EDAW brands, are coming together as part of a global integration that will see each brand adopt the AECOM name”
AECOM, a professional services firm has more than 4000 employees in Australia and New Zealand and 43,000 worldwide. Big dollars – big players.
Ah – the information revolution. How much better can it get?