another blow for gunns pulp mill plans

http://www.abc.net.au/news/stories/2008/08/29/2350046.htm


Another blow for Gunns' pulp mill plans

The Tasmanian Government says it will cut off all support for Gunns' $2 billion project if it has not won finance within three months.

Gunns has told the Australian Stock Exchange it is not sure if the pulp mill will proceed.

After months of saying it is close to securing finance, Gunns now says it will not have the money to build the mill until next year.

Tasmania's Premier David Bartlett today repeated a promise to cut off all support for the project if it has not got finance by November 30th.

A sovereign risk agreement expires on that date.

The agreement provides up to $15 million compensation if the mill's wood supply is reduced.

Also on that date, the Government's pulp mill taskforce will shut down.

Mr Bartlett says he does not know how much taxpayer funds have already flowed to the project, but it is understood to be millions of dollars.

The Premier is now under pressure to tear up a wood supply contract for the mill.

The contract states construction must start before November the 30th.

The Greens' Nick McKim says Mr Bartlett must instruct Forestry Tasmania to let the 20-year deal lapse.

"You can't run a pulp mill without wood," Mr McKim said.

But Forestry Tasmania's Bob Gordon says the company will not terminate the contract and is open to re-negotiating the date.

Mr McKim says the State Government's wasted tens of millions of dollars on the pulp mill, money that should have been spent on education and health.