As I have previously advised, the financial and other implications of a potential sale of the harvesting rights to Coillte’s forests have been examined by NewERA, Coillte, the Department of Public Expenditure and Reform and my Department. As part of the process, a number of detailed financial, technical and other specialist reports were prepared for Coillte, by external specialist consultancy bodies, in full consultation with the Board of Coillte and its executive management.
This work encompassed the identification of forests for inclusion in a possible sale. I understand this identification process was based on a number of criteria including usage, ownership status, yield class and accessibility. An estimate was then made of the possible returns from the sale of the forests so identified. The calculation of an estimate is complex given the potential length of time of any contract and the associated forecasting involved. As Coillte is a commercial company trading in a competitive environment, such forecasting of yields, timber prices and future revenue is commercially sensitive, and it is therefore not appropriate, to make public the analysis conducted to date.
Aside from the valuation of the forestry assets, a number of issues are being considered in relation to the possible harvesting rights concession. These include, inter alia, the consequential implications for the company, its existing liabilities and its human resources. These issues each require detailed consideration. As I previously advised, as some of the issues identified and the possible ways in which they may be addressed, have the potential of impacting on investor interest, my preference is to await the outcome of that analysis.
In their meeting with the Oireachtas Joint Committee on Agriculture last October, the then CEO of Coillte outlined the company’s involvement in the valuation process and informed the Committee that employee issues including the pension fund liabilities were being discussed as part of the consideration process. At that meeting, he added that the Coillte pension fund deficit is detailed in the company’s Annual Report and that this was one of the work streams the company was looking at in partnership with NewERA. Therefore, I want to reassure the Deputy, that all concerned are aware of the pension fund deficit and that it does form part of the overall analysis.
I want to reiterate that substantial work has been undertaken 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. This process is a very complex one and it is not possible at this stage to pre-empt the outcome of the analysis or to give an estimate of the possible net proceeds. As I have said previously, the Government will proceed with caution in relation to this matter and no final decision has been taken, as yet.