MIKE BOLAN

I note that the Evans and Peck people didn’t speak to the community itself. That’s a pity because the community has information that Sodra would likely appreciate.


The concerns about the mill most relevant to businesses (like Sodra) are socio-economic.

It turns out that the total subsidies enjoyed by Gunns provides an artificially attractive bottom line because roads, bridges, water, land and trees are all effectively subsidised by taxpayers. These items are not costed into Gunns proposal, and only a few of them are costed into the recent Welle’s report.

As a direct consequence the mill business could quickly become unprofitable if those subsidies cease in the next 10-20 years.

Given the current nature of the global recession which is cutting government revenues fiercely, cessation of subsidies is made significantly more likely, consequently Sodra, (or anyone else) would be well advised to wait until the situation has stabilised, and to get a complete list of subsidies that Gunns enjoys before committing to anything.

Read more, Comment here

Earlier on TT: The $630m cost of subsidising forestry