As worry continues to mount over the operations of logging companies in Guyana, Indian-owned Vaitarna Holdings Private Inc (VHPI) says that it hopes that a wood processing facility will be up and running before the end of the year.
But the firm by its own admission will continue to concentrate on logging activities with four trucks to arrive in Guyana by next week.
Investments at this time will include two pieces of portable sawing equipment.
Vaitarna, like Bai Shan Lin, a Chinese company, is being heavily scrutinized over its logging activities.
There are concerns that Guyana has been bending over backwards to accommodate logging companies without ensuring they move more into other processing activities. Compared to the so-called down-stream, value-added activities, logging has long been seen as contributing very little to development but taking out significant resources which could otherwise bring in millions more if processed.
As a matter of fact, Guyana has been publicly encouraging more processing, but there have been little success as in the case of Vaitarna and Bai Shan Lin which have both been here for a number of years.
While there is nothing really stopping companies from exporting raw logs, a disincentive scheme to encourage more processing by introducing a gradual increase in the export tax, has not been helping. Rather, exports have shot up by over 50 per cent for the first half of this year, as compared to the corresponding period of 2013.
Regarding its promises to build its promised processing facilities, Vaitarna, which has its log yard in Wineperu, Region Seven, in a statement issued Thursday, said it has inked a contract with a Guyanese design consultant back in March for a sawmill. The company is now looking for contractors.
The company said it has signed an agreement for two Wood Mizer mills since February.
However, the arrival of the equipment will not happen until the saw mill is completed.
The company is also claiming that it cannot build the structure of the saw mill until the hardwood it plans to use to build it, is fully dried to ensure it stands up to the pressure.
“The company has created and will be creating job opportunities by setting up the saw mill, and the priority will be given to local communities while recruiting,” Vaitarna said.
In order to ensure faster production, the Indian company said it has bought four new Mack trucks which are expected by August 19th. It will be hiring local drivers.
Vaitarna had already been under intense scrutiny after it became known that it was exporting heavily in 2012.
The former Bharrat Jagdeo administration had heavily defended the Vaitarna deal that the local media only knew about after the deal was published in the Times of India, in 2011.
With questions over the forestry concessions granted to VHPI, which is a subsidiary of the renowned Coffee Day Limited of India, in April last year, Government had insisted that there was nothing secret about granting the concessions to that company.
Coffee Day is owned by V. G. Siddhartha, an Indian businessman from Karnataka.
The Guyana Forestry Commission (GFC), which regulates the country’s forests, made it clear that the VHPI has indicated that it will be building processing facilities here.
“It has been established that in addition to log exports in accordance with National Log Export Policy, the company will engage in added value activities. The GFC has a policy of added value forestry activities and would have rejected any application from the company if it was solely interested in log exports,” former Minister of Agriculture, Robert Persaud, told the media during a press
conference to explain the deal.
It was disclosed then, that VHPI was issued a State Forest Exploratory Permit (SFEP) previously issued to Simon and Shock Intl. (SSI), a US company, and a Timber Sales Agreement (TSA) previously issued to Caribbean Resources Limited (CRL).
In April 2011, the Times of India disclosed that VHPI had been granted 1.8M acres of forest land and was interested in shipping logs from Guyana for its furniture business in India.
There were immediate questions on transparency and accusations of a possible sweetheart deal involving government.
“The real facts are that, a logging concession of 345,961 acres previously leased to CRL was re-allocated to VHPI. Contrary to what is reported, there will be no large scale exportation of logs, since the company has committed to get involved in downstream activities; in addition to logs exports in accordance with the National Forest Policy (NFP),” Persaud had said during the press conference.
It was explained at the press conference that the company first has to do a forest inventory; present a business plan that incorporates the inventory amongst other requirements, and conduct an Environmental and Social Impact Assessment (ESIA).
The current National Forest Policy, under revision, does not say no to log exports, rather it encourages and promotes value adding, Persaud had asserted.
He emphasised that in the case of the Indian company, it paid US$3M to access its concession.
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