New procedure for allocation of Timber Utilization Contracts

A major policy reform in the forestry sector is the introduction of a competitive system allocation of the timber resource. This reforms are based on Legislative Instrument (LI 1721), and its parent law, Act 547 (also amended in Act 617).

Under the new system, allocation of timber utilization contracts (TUCs) will be on the basis of public bidding for rights to harvest timber in each area on the basis of an annual Timber Rights Fee. TUCs for Forest Reserves will have a term of forty (40) years, while TUCs for other lands will have a term of five (5) years.
As part of the allocation process, a floor price would be set for each bidding area/lot. The floor price would be set by an independent third party (ITP) who would also maintain the confidentiality of the floor price until the bid opening on the bidding day.

A procedures manual has been developed for the process of competitive bidding.