South Africa Receives Bids for State Forests
9/2/99
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Title: S.Africa says receives 14 bids for state forests
Source: Reuters
Status: Copyright 1999, contact source for permission to reprint
Date: September 2, 1999
Byline: Lucia Mutikani
(Reuters) - South Africa said on Thursday nine foreign and local
bidders had submitted a total of 14 bids for government-owned
commercial forests and saw mills.
Public Enterprises Minister Jeff Radebe said in a statement two bids
were received for all the assets, and the remainder are for one or
several of the seven packages offered.
``There are a number of positive prospects on the table. However,
substantial work lies ahead,'' Radebe said.
The government is offering over 335,000 hectares (828,000 acres) of
commercial forests and five saw mills grouped into seven packages
according to geographic location and range.
The government has not published a price tag for the assets, but
analysts estimate their value at between 1.5 billion rand and two
billion rand ($247-330 million).
In addition to an upfront payment, successful bidders will be
required to pay an annual rental fee of 200 million rand for 10
years.
The privatisation of state forests has been hampered by land claims
lodged by nearby communities who were forced off their land during
the apartheid era.
The government initially planned to sell about 60 percent of its
forestry assets, but Radebe said a complete disposal is now a
possibility.
``It remains to be seen whether the assets will be sold as a whole or
in parts. There is substantial competition for a number of the
packages,'' he said.
BID JUDGING
In addition to the price, the government will judge bids on the basis
of the jobs they create, cooperation with local communities, and
future investment. Black economic empowerment will also be a top
priority in line with the government's policy of uplifting previously
disadvantaged communities.
``The bids are being carefully analysed. We are still some weeks away
from making decisions on preferred bidders,'' said Radebe, adding an
announcement was expected by end September.
The privatisation of South Africa's state-owned forestry assets will
release much-needed cash for social and development programmes
currently restrained by tight government budgets.
Since 1996, the government has restructured or partially privatised a
number of assets, including the sale of a 20 percent stake in
national carrier South African Airways to Swissair and 30 percent of
telecommunications parastatal Telkom to SBC Communication Inc and
Telkom Malaysia.
($1-6.067 Rand)
Copyright 1999 Reuters Limited.