Well Bodo I am doing my own research,and this is wot I hav come up with. Just when you thought it was safe to go down to the forest,this has been kept from investors,does this mean that Gunns have been porking the books,and at the expense of investors that will get nothing and the tax payer unwittingly been screwed.
I notice the deafening silence of Kevin Crud,and his lame duk opposition Tony Rabbit
12 July 2009 CEO Mr Leif Brodon Sdra, Skogsudden, 351 89 Vxj Fax: 0470-891 85 Email [email protected]
Re: Significant risk to Sdras bottom line from investing in Gunns planned pulp mill, Tamar Valley, Tasmania.
Dear Mr Brodon, We write to point out a significant and undisclosed risk to Sdras bottom line should the company decide to invest in Gunns pulp mill planned for the Tamar Valley, Tasmania.
It is unlikely that Gunns has pointed out their dependency on direct and indirect government subsidies because Gunns has neither reported on these in its Integrated Impact Statement and does not report the subsidies in their books. Given the scale of these subsidies, their potential loss to Gunns and forestry in Tasmania poses a significant risk to the future value of Sdras investment as the global financial downturn forces governments to look for ways to cut back on expenditure.
The profitability of Gunns Ltd has long been artificially propped up with a wide range of taxpayer subsidies as listed in the Appendix below. A cash subset of forestry related subsidies have also been identified in an independent study by economist Graeme Wells.
The local community via its organisation TAP Into a Better Tasmania has estimated subsidies for Gunns and forestry in Tasmania and costs arising from the pulp mill project. These include losses to other businesses and the community of more than $3.1bn, one time diversion of taxpayer dollars of $399m (so far) and ongoing subsidies of $360m/year See Subsidies and the Appendix below for more detail.
The scale of many subsidies is not precisely known as there has been no socio-economic and environmental analysis of the pulp mill proposal or an analysis of cost side of a cost-benefit study. Neither has there been a risk assessment to Australian Treasury standards of the pulp mill project. Sweco Pics assessment of the project does not include noise emissions, impacts on surface or estuarine waters, effects on flora and fauna, transport implications and social and economic effects, and does not include construction impacts and does not include impacts from off-site infrastructure development such as raw water supply pipeline, effluent pipeline or quarry (p12 Assessment of the Gunns Limited Bell Bay Pulp Mill Against the Environmental Emission Limit Guidelines, 25 June 2007)
There is considerable community disquiet about the assessment of the project with only 26% agreeing with the Government's fast-track process, 64% disagreeing and 10% unsure (8 August 2007 EMRS statewide poll. (See http://tapvision.info/node/413). Also, 26 of 27 opinion polls conducted from 2005 to the present show a majority of Tasmanians and Australians are opposed to a Gunns pulp mill in the Tamar Valley. Only one poll in George Town near the proposed pulp mill, showed majority support (53% to 47%) in February 2008.
Governments are coming under increasing pressure as a result of the global financial crisis to reign in spending, recoup costs and reduce subsidies in the face of backlash from voters who are increasingly angry with the loss of essential services. Some of these services include health, public housing, education services, disability services, road & rail funding, national parks and nature conservation.
The dependence on subsidies means that neither Gunns nor Sdra can guarantee the future bottom line profitability of the proposed pulp mill. Professional business consultants have advised us that the most responsible decision for Sdra is to wait until the scale and type of subsidies is clear and the risks clarified.
We welcome inquiries to provide further information about the financial risk to your bottom line from investing in Gunns planned pulp mill.
Yours faithfully
Tony Saddington
Spokesperson for TAP Into a Better Tasmania Email [email protected] Web www.tapvision.info
Cc Evans & Peck, Sydney office Fax: +612 9495 0520
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