The Tasmanian Government has not investigated the financial risks of the mill to the State and documented the subsidies. The economic viability of the pulp mill has not been tested in public.
Below are three studies of the financial impact of Gunns' proposed pulp mill from individual members of the community, presented in an attempt to redress this important gap in the assessment.
1. Risk assessment of Gunns’ pulpmill, pipelines and transport of chemicals (June 2008)
Gunns have not provided a risk assessment in their Integrated Impact Assessment of hazardous chemical transport, of the pulp mill generally or of pipelines carrying water and waste. UK regulations now requires a risk assessment for the transport of all hazardous chemicals. The cost of doing a risk assessment is not onerous but the cost of not doing so could be very significant. A range of risks must be considered in building and operating pipelines such as those listed in risk assessment.
2. Gunns' pulp mill sums - who pays? who loses? (April 2008)
This paper is an attempt to identify and quantify the subsidies paid to Gunns and the logging industry in Tasmania. It was compiled by Andrew Bent drawing upon broad community input via the online newspaper www.tasmaniantimes.com and was edited by TAP.
In summary, taxpayer funding diverted to support pulp mill and logging amounts to a one time capital cost of $399m (so far) and ongoing costs of $360m/yr. If the mill operates for 30 years, the total is $11.2bn. It is pretty clear that the level of subsidies is very high, particularly for an activity that generates so few jobs per $million invested, and that produces such small returns from valuable resources.
Overall, the forestry industry appears to remove resources worth about 10 units and return about 1 unit in exchange, such a poor return that they need major subsidies to keep going. This is played out each time they chip a celery top/myrtle/blackwood tree worth $1,000 and produce about $100 worth of woodchips from it.
Read more at Gunns' pulp mill sums - who pays? who loses?
3. Competitiveness of Gunns Ltd's mill continues to fall while government subsidies rise April 2008
Naomi Edwards FIA FIAA FNZSA, prepared this personal research paper. She concludes that:
•The cost of building the Bell Bay pulp mill is too high
•Bell Bay fibre costs will be US$227/t compared to US$103/t in Brazil
•Input cost forecasts from Gunns are not credible
•Government continues to subsidise mill but for how long?
•Comparisons with the Aracruz pulp mill are flawed
Read more at Competitiveness falls while subsidies rise
4. Summary of financial risks (2007.)
Report prepared by TAP.
Gunns Ltd and the Tasmanian Government both trumpet the economic benefits of an anticipated $6.7 billion boost to the state economy with 1617 new jobs from construction and 292 jobs long term. However, by counting only benefits and ignoring costs, the economic studies of the proposed pulp mill by Gunns and the Tasmanian Government fail basic due diligence tests. The economic report prepared for Gunns by Allens Consulting Group failed to meet Australian Treasury guidelines for economic appraisal. In addition, the Tasmanian Treasury Department has not investigated the risks of the mill to the State and the economic viability of the pulp mill has not been tested in public.
This analysis draws together the more significant financial risks arising from Gunns' proposed pulp mill.
Read more at Summary of financial risks
