EPA rejects claims over Gunns mill

EPA director Alex Schaap said yesterday Gunns had "substantially commenced" the project as required by August 30 to avoid the lapsing of its environmental permit.

Opponents had claimed that after nearly seven years, with the project not financed and foundation earthworks only starting on August 29, the company had failed to meet the substantial start test and the permit was void. The group, Pulp the Mill, started an action in the Tasmanian Magistrates Court alleging that Gunns began its development without a permit, contrary to the state's Land Use, Planning Approvals Act.

But Mr Schaap said: "Even on my most restrictive interpretation of the progress already made in the project, I conclude that an amount in excess of $120 million has been invested in the project. In my view the evidence is consistent with substantial commencement having occurred."

The EPA's consideration of the issue was triggered by Gunns' decision to seek a minor variation of the mill site's stormwater management plan.

Mr Schaap said he would continue to regulate the site on the basis that a valid permit existed, unless a court determined otherwise.

Gunns confirmed its focus on the mill project when it came out of a six-week suspension on September 20.

Managing director Greg L'Estrange was unable to shed any further light on a financial close, except to say negotiations were well advanced.

The company's shares fell to a low of 15.5? on September 23 and yesterday closed at 18?.