Bushfires: damage could derail NSW’s $1bn forestry sale

The $1bn privatisation of NSW forestry assets has been placed in jeopardy due to bushfire damage.

NSW Treasurer Dominic Perrottet. Picture: AAP

The $1bn privatisation of NSW forestry assets has been placed in jeopardy by the bushfires, with large swaths of the land already burned out and the plan unlikely to proceed if the damage is too extensive.

Treasurer Dominic Perrottet said detailed assessments were still being conducted on the extent of the damage but officials say approximately 47,000ha of state and privately owned softwood plantations have been impacted, based on preliminary assessments.

This amounts to about one-fifth of total softwood plantations, a spokesperson for the Forestry Corporation of NSW said. The corporation oversees 230,000ha of plantations in the central west, south and north of NSW, where fires still burn.

Trees burnt by bushfires. Picture: Getty

Current damage estimates are preliminary and possibly conservative, with ongoing fires preventing more detailed assess­ments being made.

Mr Perrottet told The Australian a scoping study announced in August would con­tinue to investigate whether a long-term lease of the plantations was in the best interests of the state. He said the study would undoubtedly have to account for the impact of the fires.

“Given there’s been substantial damage to the softwood plantation, that will have an impact on the scoping study,” he said.

“The scoping study will no doubt consider the impact of the fires and that would definitely form part of the government’s consideration … and that would impact my recommendation to the government in respect of how we move forward. We will always make a ­decision in the best ­interests of the state.”

The hope is that some timber might still be salvageable for the state regardless of the fire damage.

Pine trees could be harvested for 12 months or more after a fire, the corporation’s spokesperson said, and logs could be stored even longer when immersed in water. “We will be working closely with industry to process timber from the affected plantations and replant the areas to regrow our ­future timber supply,” he added.

According to its website, the Forestry Corporation of NSW is the largest grower of plantation pine in the country, and produces enough timber to construct one-quarter of all houses built each year across Australia.

Smaller, younger trees are ­usually harvested for pulpwood, which is used to make paper ­products and particleboard.

House frames and furniture are made out of trunks cut from stronger, more mature trees.

Like most recent privatisation efforts, money raised from the sale of these assets would almost certainly pay for major infrastructure spending, a cornerstone of the ­Berejiklian government’s program, but Mr Perrottet said he did not embark on this scoping study or any other for capital-raising purposes.

Over the span of three premiers, NSW has continued a trend of asset sales to pay for new projects, although this has not always been well received by critics, ­especially those who fear for job losses through privatisation.

Since 2011, the Coalition has sold half of its electricity networks, half of the WestConnex freeway project, the Land and Property ­Information Service, a desalin­ation plant and its electricity ­generators.

On Thursday, the government announced spending of $1bn for roads, rail lines, bridges and other state-owned ­assets destroyed during the bushfires.

Labor criticised the announcement as a reallocation of existing spending, but the government said the funding was sourced from capital reserves and Treasury-managed funds. Treasury officials estimate a damage bill to these state-owned assets at $300m, The Aus­tralian has been told.