Outrage at woodchip mill deal

The Tasmanian Department of Development advised timber haulage operator Ron O'Connor its board had approved the loan, amounting to about a third of the undisclosed purchase price, a spokesman for him said last night.

Mr O'Connor still had information to provide to his main lender, but was "very close" to completing the deal, his spokesman said.

At the same time, Green opposition to the purchase strengthened with the revelation that the state timber agency, Forestry Tasmania had reached a supply and profit-sharing arrangement with Mr O'Connor to ensure the mill's future.

This meant potentially Forestry Tasmania was taking on some risk of the deal, the Greens' economic development spokesman Tim Morris said.

Continued operation of the chip mill is claimed by Premier Lara Giddings to be critical to the state's sawmilling industry.

Triabunna would give the millers a revenue source from pulpwood logs and sawmill residues, with Mr O'Connor's Fibre Plus Tasmania planning to export more than 500,000 tonnes of chips annually.

But with many details of the deal still unknown, the Greens and independent MP Andrew Wilkie attacked the state's minority Labor government. Mr Wilkie told Federal Parliament the state government was poised to lend an undisclosed amount of taxpayers' money to the "foundering" mill, aiding Gunns.

"And this is outrageous, because the handout would be just another thinly veiled payout to the company struggling to manage its daily cash flow, let alone build its stinking Tamar Valley pulp mill," he said.

Senate opposition leader Eric Abetz said that in opposing the deal the Greens were trying to further the interests of the party's biggest donor, Wotif's Graeme Wood.

Mr Wood, who gave the Greens $1.6 million at the last election, is reported to have wanted to use the Triabunna facility for tourism.