Minister says business proposals have been narrowed down to one
There just may finally be a plan for the fibre resource in central Newfoundland.
© Krysta Colbourne photo
There is an extensive amount of fibre in the central region which is underutilized.
“We’ve gone through an Expression of Interest (EOI), we’ve gone through two processes actually, to determine if we can develop the central fibre resources for the benefit of the central Newfoundland economy, as well as for the benefit of the sustainability of the forest industry,” Derrick Dalley, Minister of Natural Resources, told the Advertiser on Tuesday.
Dalley said government is in the late stages of their second call for Expression of Interest.
According to the minister, when the Expression of Interest closed there were originally 14 proposals. They were eventually narrowed down to two.
“We requested a detailed business plan from two, one of the proponents withdrew, and there’s one left that we’re anticipating will submit a business plan this week,” Dalley said at the time. However, up until Thursday that plan had not been received by the department.
The minister said business proposal will be reviewed to determine whether “they meet our objectives of ensuring that there’s benefit for the central Newfoundland economy, as well as be able to be integrated and contribute to the sustainably of the forest industry,” Dalley said.
The evaluation will determine the financial resources of the company, their harvesting strategy, ability to integrate with the existing forest industry, economic benefits, use of technology, markets and transportation logistics, as well as the overall experience and knowledge of the proponents.
“We want to try and do something here that’s going to work and it’s going to be right and a good fit for central, as well as a good fit for the forest industry,” Dalley said. “Again the focus is on the central fibre and the focus is on central Newfoundland.”
He added, the government’s priorities are “first and foremost recognizing the shutdown of Abitibi and the impact it had on an entire central region.
“So that was of concern for us as a government since 2009 and how we could then be able to use that timber resource to supplement and improve the economy in the central region.”
In its call for Expressions of Interest, the minister said, the province indicated availability of 280,000 cubic metres of fibre, as well as access to assets of the former paper mill.
“But we have certainly left the Expression of Interest wide open . . . bearing in mind that the mill assets are available if is fits into a proponent’s plans,” Dalley said. “It wasn’t a requirement but it’s certainly available.”
He added government also wants to make sure, through this selection process, that any business chosen to access the wood fibre resource in the region would fit in well with the existing players in the industry, such as the pulp and paper mill in Corner Brook.
Dalley also told The Advertiser that it would likely be early in the New Year before the province makes a decision.
“I would suspect that to do the interdepartmental due diligence I would say we’re looking at early in the new year, I would hope certainly in the first quarter of the new year that we would be able to make some sort of announcement as to how this process has unfolded,” Dalley said.
A discussion abound central’s fibre got started a couple of weeks ago when Eddie Joyce, Liberal MHA for the Bay of Islands, raised questions in the House of Assembly about the pellet plant in Roddickton.
He wondered if the company that had obtained millions from government to set up the pellet plant, is the same company that has submitted a proposal for the Abitibi properties in Grand Falls-Windsor.
“Mr. Speaker, with $11 million spent on an idle pellet plant and no due diligence by the Premier or the company, I have one simple question for the Premier,” Joyce said during Question Period, “Can you confirm if this same company is now on the short list for the former Abitibi site and resources in Central Newfoundland?”
In his response to the House, Dalley said, “That is still confidential information … but I can assure the member . . . that we will do all we can to ensure that it (Abitibi site) becomes commercially viable.”
Last week Dalley told the Advertiser he has information that shows Joyce’s information was not factual.
“He’s referencing things there that are inaccurate,” Dalley said. “At this point it’s obviously confidential information as to the submissions and the evaluations and we got a proponent that’s going to submit a business plan; when the time is right I guess we’ll make an announcement on that but we certainly won’t be speculating, and I certainly don’t expect the opposition to be speculating either.”
The Nor’wester caught up with Premier Kathy Dunderdale a couple weeks back which she was in the Baie Verte area and asked her about the points brought up in the House by Joyce.
“We’ve got a request for proposals in and I’m not sure…I’m not involved at this point,” Dunderdale said. “While those proposals are being assessed, we’ll see. But you know, we make investments in high-risk companies all the time. You know we’ve made $40-$50 million maybe more in Corner Brook Pulp and Paper. Mr. Joyce supports that completely.”