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To meet its contractual obligations, KPC had to spend tremendous amounts of money 

 to construct a pulp mill. SBA and independent operators have no such obligation. 



This brings me to the specific terms of the legislation being considered. Why is 

 this legislation needed? I will try to explain why. 



Why a 15-Year Extension? 



Fifteen years plus the remaining term of the contract is the minimum time 

 required to recoup the planned investments alluded to earlier. KPC plans to invest up 

 to $200 million over the next 5-8 years to continue to be environmental leaders and 

 remain competitive in the world pulp market. To make these investments, the 

 assurance of an adequate, economic supply of timber as well as a fifteen-year extension 

 are needed. Changes necessary to enable the Forest Service to honor and extend the 

 contract must come through the legislative process. Such changes need to be 

 accomplished in 1996; otherwise investment plans must be reviewed and the viability 

 of KPC may be threatened. Strong, state-wide bipartisan support exists to maintain 

 KPC as the cornerstone of a responsibly managed and diversified Alaskan forest 

 products industry. 



KPC has begun an aggressive investment program that will total up to $200 

 million to upgrade its facilities to ensure not only that it meets evolving environmental 

 requirements into the next century but that it remains competitive in the world pulp 

 market. Specifically those investments include: , 



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