Forest Products Commission Problem and Opportunity Statement

Rebuilding the Western Australian Softwood Plantation Estate

Problem

The Forest Products Commission (FPC) currently manages approximately 78,000 hectares of softwood plantations. The plantation estate consists of approximately 51,000 hectares of trees on State-owned land and approximately 27,000 hectares on sharefarms that were established on private land.

The plantation estate currently supports three State Supply Agreements:

• Wood Processing (WESFI) Agreement Act 2000 (Laminex), expiring 2025
• Wood Processing (Wesbeam) Agreement Act 2002, expiring 2029
• The Dardanup Log Sawmill Agreement Act 1992 (Wespine), expiring 2033

This softwood plantation area is declining, and resource projections show that without significant new investment, the estate will diminish to 40,000 hectares over the next 20 years. This is the result of two primary factors:

• Plantations on public land in Gnangara, Pinjar and Yanchep are being harvested without replanting to maximise water recharge to the Gnangara aquifer. 
• The plantations on private land were established as sharefarms with lease agreements and funding for one rotation only.  This area is now reducing as the sharefarms are harvested

A plantation area of 40,000 hectares will not have enough capacity to support the current industry or anticipated growth in the demand for timber products. New investment is needed to increase the estate to closer to its historical size of 90,000 hectares.

Opportunity

Private sector investment is being sought to support a 50,000-hectare expansion of Western Australia’s softwood plantation estate. The State government is seeking proposals from the private sector that indicate the type and level of support required from the State to facilitate this investment.

The new plantations should be focused on locations that are within an economically viable distance of current processing facilities in Dardanup and Neerabup.

Proponents should demonstrate their ability to contribute to the expansion, and clearly indicate the type and level of support that may be required from the State government.  The State is open to the consideration of any potential investment models proposed by proponents that meet the State’s objectives.

In addition to the addressing the MLP assessment criteria, proponents must demonstrate how the State’s objectives will be met by the proposed solution, including:

• Ongoing supply to the State’s timber industry;
• The capacity to begin a new establishment program during 2021;
• Opportunities for Aboriginal economic development;
• The provision of eligible carbon offsets under the Australian Government’s Carbon Farming Initiative;
• Complementary benefits to the south-west agricultural and horticultural sector;
• Biodiversity benefits, particularly through the establishment. and management of foraging habitat for the endangered Carnaby’s black-cockatoo; and
• Value for money outcomes for the State, including consideration of any State balance sheet, operating statement and risk impacts.

What are Problem and Opportunity Statements?

• POS are a flexible mechanism released by the Minister for Finance in March 2020 within the revised Market-led Proposals (MLP) Policy.
• POS allow government to provide focussed opportunities, inviting industry to respond with innovative solutions.
• POS effectively replace Stage 1 of the MLP process and will be assessed against the criteria of the MLP Policy.
• POS retain the rigour and independence of an evaluation process supported by the probity principles of the MLP Policy.

POS Assessment Criteria

POS are addressed against five criteria of the MLP Policy:

• Strategic alignment – proposals align with government policy objectives and priorities.
• Public interest – proposals have significant social, environmental, economic or financial benefits for Western Australians.
• Value for money – proposals represent value for money for Western Australians and are affordable in the context of budget priorities.
• Feasibility and capability of being delivered – proposals are feasible and the proponent has the financial and technical capacity, capability and experience to deliver the outcomes successfully.
• Risk - any financial, reputational, political, and/or security risks to government from the proposal are acceptable and there is an appropriate allocation of risk between the proponent and government.

Contact Details

For enquiries relating to the proposal for Rebuilding the Western Australian Softwood Plantation Estate, contact:
John Tredinnick
Director New Business and Innovation Forest Products Commission john.tredinnick@fpc.wa.gov.au
(08) 9363 4619
0417 952 817

For questions in relation to the POS process, please contact the Market-led Proposals Secretariat:

Justin van Didden
Principal Project Coordinator, Market-led Proposals justin.vandidden@finance.wa.gov.au

For additional information on the process, please read the MLP Policy and Supplementary Guidelines found on the MLP webpage at www.wa.gov.au.

Related attachments

• FPC Annual Report 2018-19
• FIFWA strategy: Western Australian Plantations - the Missing Piece of The Puzzle
• The FPC’