…as declining earnings hit home
In light of the 15 per cent decline in earnings from the forestry sector in 2016, the Government is now prepared to implement several changes in the hope that it will help with the sector’s recovery.
This is according to Natural Resources Minister Raphael Trotman, who provided an update on the sector to a Parliamentary Committee chaired by Communities Minister Ronald Bulkan on Wednesday. Trotman said the first step to be taken by Government to assist in these efforts, is to reallocate three quarters of the 1.6 million hectares of land held by Barama.
The Minister said the blocks would be divided up equally, giving everyone a fair chance to operate. According to him, one of the blocks will be held for conservation, another will be allocated to small loggers and two will be utilised by international companies.
Already, the Ministry is in the process of evaluating some 17 Expressions of Interest (EOIs) that were submitted recently, and this process could be completed by the end of this month.
Trotman told the Committee that the 69 concessions given out at the end of last year were expected to significantly boost production, as it was looking at a target of 297,070 cubic metres this year.
Speaking on the illegal joint ventures that BaiShanLin entered into with five local companies, Trotman said the Government had no choice but to revoke the contracts and seize the lands.
He declared that the Guyana Forestry Commission (GFC) planned to auction off, or invite companies to express their interest in purchasing the logs that were left behind.
It was also revealed to the Committee that the Chinese Development Bank has requested Government not distribute lands once held by BaiShanLin.
Trotman said the Bank was now looking to secure finances to recapitalise loans owned by that company.
According to him, there are currently no activities ongoing on the two concessions. Those concessions, he said, remain intact and are not being worked at this time. Given the decline in production, the GFC has made calls for even more incentives to be granted in an effort to make the sector more competitive.
In light of the new trends and future expectations for forests and timber trade, the Proposed National Log Export Policy Report (2016-2020) deemed such a move to be a “critical” one.
According to the GFC, in this document, incentives are aimed at continuing support for economic activities while embracing environmentally sound practices.
Another crucial incentive recommended by the GFC was the need to have tax waivers on spare parts, components and tooling. The GFC said that concession holders and operators invest on an annual basis a significant amount on spare parts and components for logging equipment.
The forestry sector contributes in excess of three per cent of the nation’s Gross Domestic Product (GDP) based on primary production, and provides direct employment to approximately 23,000 people.
