A DELAY in a promised $2.8 million federal government grant is stopping Dorset Renewable Industries from buying a majority of the former Gunns Ling Siding site at Scottsdale from RNG Property Developments.
North-East earthmoving contractors Robin and Noel Gerke bought the site from receiver KordaMentha only last month.
Dorset Renewable Industries chairman David Hamilton said an agreement had been reached to buy the site's industrial land to establish an integrated timber processing hub.
However, he said the sale would depend on the group receiving the Tasmanian Jobs and Growth Plan grant - promised by former prime minister Kevin Rudd.
"Although the incoming federal government has confirmed that the grant is available, it has made it conditional upon a value for money test," Mr Hamilton said.
"The paperwork we need to complete for that value for money test reads very much as if we are actually applying for the grant from scratch. Our plan is to encourage existing and new industries to consolidate their operations at Ling Siding, so they can share resources and pass materials to each other."
Mr Hamilton said he would contact Bass Liberal MHR Andrew Nikolic for his support.
He said the grant was to help diversify the timber industry in the North-East and the new hub would hopefully create new and innovative industries over time.
"While Robin Gerke has been positive, productive and helpful in our discussions ... no reasonable person could expect him to wait forever while the status of our funding continues to be uncertain," Mr Hamilton said.
"There will be a date after which our agreement may cease to exist and our opportunity to buy Ling Siding to re-establish timber processing there may evaporate."