US-based Resource Management Service submits winning bid to Greater Wellington Regional Council in New Zealand for cutting rights to metropolitan and Wairarapa reserve forests; contract will run for 60 years from July 1 with option to extend to 90 years

Wendy Lisney

WELLINGTON, New Zealand , May 15, 2014 (press release) – Cutting rights for Greater Wellington Regional Council’s metropolitan and Wairarapa reserve forests have been sold to US-based forestry company Resource Management Service LLC (RMS).

While GWRC will continue to own the land, RMS will hold cutting rights for the forests for at least 60 years. The company submitted the best tender based on price and quality. However the final price will depend on a stock take of the forests on 30 June.

“This is an excellent result for the region", said GW chair Fran Wilde. "The agreement provides certainty over the harvesting of our forests and sale funds significantly in excess of the council’s forestry debt. The money will be used to repay forestry debt and for purposes yet to be determined by the council.

“We’ve also secured agreement with RMS on high standards of health and safety for the workers involved in harvesting. This was an important issue for us in view of the current debate on forestry practices in New Zealand. We also wanted Wellingtonians to be able to continue to use our forests and as a result of the contract, recreational activities will continue in our forests in accordance with the council’s parks network plan, with forest harvesting on weekends and public holidays continuing to be restricted. Strong environmental protection provisions are also included in the contract.”

GWRC endorsed the sale of cutting rights to RMS at its meeting this morning and the contract will run for 60 years from 1 July 2014. It can be extended to 90 years halfway through the contract at the discretion of the council.

“We chose RMS because of the depth of its intensive forestry experience and the resources and capability of its proposed forestry manager PF Olsen. This combination resulted in RMS having the highest quality score of all tenderers, with quality accounting for 30% of the tender evaluation. We are very confident in our choice of partner and we look forward to working with them in the future,” says Fran Wilde.

Note:

GWRC will actively monitor all aspects of RMS’ forestry operations, and RMS will be required to report against its activities through the preparation of a five year rolling plan and an annual cutting plan.

Established in 1950, RMS is a forest management and consulting firm which is majority owned by its employees. It is a vertically integrated timberland investment manager with over USD 4.3b in forest assets under management covering 1.01m hectares for pension fund, endowment, foundation and similar investors. It has 155 employees, located in the southern USA, Brazil, Hong Kong and New Zealand.

RMS New Zealand Limited will be responsible for the strategy and management oversight of the GWRC forestry rights and setting the plan and budget. PF Olsen and Co. Limited will manage day-to-day operations, reporting to RMS New Zealand Limited as the entity responsible for the performance of the contract. RMS’ New Zealand employees have significant experience in the New Zealand forestry industry, having worked with Carter Holt Harvey, New Zealand Forest Service and similar organisations.

A substantial majority of the forest cutting rights will be owned by a consortium of investment companies and a United States academic institution, for which RMS will provide forestry management services.

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