Timber utilization contract faces bleak future

The timber utilization contract (TUC) initiated by the Forestry Commission (FC) to promote the sustainable management of the country?s forest and the promotion of the timber industry stands the danger of running into problems as a greater number of companies which won bids in the first phase are unable to honour their monetary obligations.

A source at the Ghana Timber Millers Organisation (GTMO), the umbrella organization of the major timber firms in the country, said in an interview that for about one year now, the commission had been able to issue TUCs to only two out of the 21 companies which won bids.

However, the Forestry Commission has discounted the GTMO?s assertion, explaining that five TUCs had been issued since April last year and not two.

In an interview in Accra, Mr Robert K. Banfo, the head of the monitoring and evaluation unit of the Commission, said the five companies had fully complied with all the conditions under the TUC.

The conditions include posting of performance bonds, execution of social responsibility, payment of annual rent on the contract area and timber right fee.

He said in April 2004, 14 companies won the bid but four complied with the conditions while 26 companies won the bid this year but only one company was able to meet the conditions.

The GTMO attributed the issuance of TUCs to only two firms to ridiculously high bid amounts demanded from the companies.

Besides, it said, most of the concessions were depopulated to the extent that the companies believed they did not merit the bid amounts.

The GTMO source called on the Ministry of Lands, Forestry and Mines and the Forestry Commission to consider reviewing the bidding process to bring sanity into the system.

According to the source, the commission put most of the concessions that expired in 1992 in a pool for conversion to TUCs but it had been realized that nobody took care of the concessions when they expired and, as a result, the raw material base in the concession was very low.

Reacting to those claims, Mr Banfo said the commission had no control over the bidding processes and explained that the processes were transparent, adding that the commission only set the floor price, with an independent third party determining the rest of the processes with the companies and other stakeholders.