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Celgar/city see eye-to-eye; $55-million project to resume

In a rare moment of accord, Celgar officials say they are as pleased as City of Castlegar representatives at the outcome of this year's Union of B.C. Municipalities (UBCM) convention.


Celgar manager Al Hitzroth said the UBCM resolution urging the provincial government to re-examine major industry taxation in B.C. is good news.


“I'm still disappointed in the provincial government's wait-and-see attitude,” he said. “They're just kind of sitting back ... I think they're hoping it (the taxation issue) will just go away.


“The UBCM said, 'we need to engage the provincial government on this issue', and that's a good thing.”


Meanwhile, Celgar is enjoying even more happy tidings from other levels of government – Hitzroth said the mill is expecting a grant of roughly $60 million to be forthcoming from the federal government any day now.


“The $1-billion federal program for the pulp industry is in response to the U.S. black liquor subsidy program, trying to balance that,” he explained. “How much we get will be based on how much black liquor we fired (in proportion to how much other grant recipients fired), so we don't know for sure how much it's going to be. The $60 million figure is our best guess.”


Of that $60 million, he said, $40 million is earmarked to get Celgar's green energy project, which was put on hold due to the economic downturn, back on line. The project involves the installation of a condensation turbine, that will convert excess steam, now just being wasted, into electricity that Celgar will then sell into the grid via an agreement with BC Hydro.


“There's still a fair bit of work to be done,” Hitzroth said. “If we're able to get the money, say, by mid-October, the project should be completed sometime in the summer of 2010.”


As for the remaining $20 million (if their estimate is correct), Hitzroth said the grant requires project to be either environmental improvements or energy efficiency improvements.


“We're still in the process of defining the other projects that benefit the mill and meet the criteria of the funding,” he said.


Overall, he said, the mood at Celgar seems to be one of “cautious optimism”, as the economy continues to recover, but at a slower pace than some had hoped to see.


“There seems to be some light at the end of the tunnel, but I guess it remains to be seen.”


He said no date has yet been set for Celgar's suit against Castlegar in the B.C. Supreme Court, nor yet has there been a ruling on a similar case involving Catalyst Paper and a handful of coastal communities.