B.C. Forest Investment Money Imminent

B.C.’s forest investment account worth $95-million in land base activities may finally be available as soon as next week.

24 May 2002
Western Silvicultural Contractors’ Association Rumour Mill

B.C. Forest Investment Account Monies Available Soon/Tendering Practices Revised

The drought of public forest funding for environmental restoration and enhanced forestry in B.C. could get some relief within the next ten days according the administrator of the province’s new Forest Investment Account (FIA). Pricewaterhouse Coopers says final approval from the Auditor General on its contract with government expected early next week will allow spending of an estimated $95-million on land base sustainable forest investments across British Columbia. Backlog reforestation, brushing, spacing, forest surveys, riparian and road restoration, resource inventories, and tree breeding are some the activities included in this program. Industry will spend $80 million of the total land base allocation with government spending the balance. Pricewaterhouse Coopers says FIA recipient forest licensees could be signing agreements before the end of the month.

Following a consultative tour of the province earlier this spring by Pricewaterhouse Coopers the ministry of forests has set tendering guidelines that allow for both direct award and competitive tendering of FIA contracts by forest licensees. Proponents with a total FIA allocation of less than $50,000 will not be required to tender projects. However, direct award costs must meet the test of being reasonable and economic. FIA recipients with more than $50,000 to spend must tender a minimum of half of the gross value of all work sub-contracted for the year including delivery allowance. Any project over $100,000 must be advertized locally and any projects less than $100,000 can be procured through select invitation bids. The ministry of forests is working on a definition of “local” for tendering purposes.

The apportionment of FIA land base investments to each management unit is based on its proportion of the volume of Crown timber harvested in all 37 timber supply areas and the 34 tree farm licence areas during the previous three calendar years. Once the account if operational funding will be distributed as soon as the FIA administrator approves the submitted investment schedules and a recipient contract is signed.

The forest investment account replaces Forest Renewal BC and will operate on vastly different principles than the former Crown corporation. Although still in the development stages the new account is expected to be fully operational within the first year apart from the development of sustainable forest management plans (SFMP). These plans will be developed in the context of government’s defined forest management areas (DFMA) which will create planning consortiums of licensees. Licensees will be required to sign onto a completed SFMP for their management unit in order to be eligible for FIA funding. The novel DFMA concept depends on the collaboration of licensees and is being developed in detail by the ministry of forests.

In the meantime until sustainable forest management plans are in place or substantially completed, Pricewaterhouse Coopers expects FIA funding recipients to include in their investment schedules consideration of incomplete projects initiated last year which were funded by Forest Renewal BC. Priority will be given first to those projects with legal obligations (backlog reforestation, wildlife collars, hydrometric station maintenance and demobilization, Water Act authorization, etc.), secondly to projects which, due to their current state, pose a moderate to high risk to the environment and thirdly, to projects for which planned returns from past investments will not be realized until the project is completed.

Government will try and remain as arm’s length as possible from the program with no direct role in setting activity priorities, approving land base investment projects, verifying fieldwork or certifying project completion. A Forest Investment Council comprising deputy ministers from the three agencies involved and industry representatives will guide government. Government’s role will be to determine the allocation of funds to participants, establish eligible investment activities and work standards and perform its regulatory function. Pricewaterhouse Coopers which won the position of FIA administrator through a competition held last March will be responsible for all aspects of program administration, allocation, and disbursement of funds and auditing.

For more information see the following websites: http://www.wsca.com http://www.fialicensees.com http://www.for.gov.bc.ca/cpp/fia

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