Forestry sale planned

The value of the Whanganui District Council forestry portfolio, coupled with its carbon credits, could reap a harvest of more than $10 million.

The council's joint forestry committee meets today and both the sale of about 1000ha of its plantations and the potential to sell of its 61,000 carbon credits are on the agenda.

Councillor Ray Stevens, who chairs the committee, said he was "definitely" expecting the committee to make some progress with the planned sale of the forestry lots.

Mr Stevens said the committee had been negotiating with agents and "all going well we should have a sale path in place to see the sale concluded in the first quarter of next year".

"I'd be expecting the sale to at least reach valuation or exceed it."

While he was loath to talk up expected returns the committee's balance sheet the value of the trees, the land they're planted on and the value of the carbon credits totalled close to $10 million.

Assuming the sales are completed then it will represent a much needed windfall for the city's wastewater treatment plant. He said the intent of planting the trees back in the 1970s was to help bankroll the wastewater scheme.

"I'd be hugely disappointed if any of the income from the sale we're working through isn't used to help clear that wastewater debt because that was the clear intention of establishing the scheme in the first place," he said.

"Cheap loans were available to re-afforest backcountry land and the council of the time led by then mayor Ron Russell had the foresight to get involved."

As well as moving to sell off its forest investment, Mr Stevens said the committee would be discussing a potential sale of the 61,000 carbon credits it holds under the emissions trading scheme..

"About a year ago the credits were only worth about $2 each, so they were virtually worthless. But the latest price has them sitting at close to $18, so our 61,000 credits could bring in another $1 million. Whether or not we sell is a matter of timing."

A resolution has been on the committee's agenda since 2013 that a special meeting would be called when the price reached $10 and Mr Stevens said today's meeting will discuss rescinding that resolution. A new recommendation suggests the committee commission an emissions trading scheme specialist to provide a report for the next committee meeting later this year.

The value of those carbon credits was sitting at $4 at the start of the year, rose to $9.20, then past $16 each and were expected to reach $25.

Whanganui council holds a 95 per cent share of the forests, Ruapehu's council holds 3.93 per cent and South Taranaki the remaining 0.98 per cent.

Trees already harvested from the maturing plantations have brought in $11.6 million in the past 15 years but now the committee has called on experienced agents to market and sell the forests. The successful agent would need to develop a marketing strategy, market the blocks, evaluate the bids and finally broker the sale agreements.

There are about 1200ha in trees in six separate blocks but the intention is to sell 1000ha included in four of them. Three of the forests are on SH4 and the fourth on Tokomaru East Rd.