Members of a Dail committee have expressed concern about the proposed £4 million takeover by Coillte of the Northern Ireland sawmilling company, Balcas. But the chief executive of Coillte, Mr Martin Lowery told them that the takeover would deliver more jobs and a new channel for exports.

The takeover is currently being examined by the Competition Authority which is due to report to the Tanaiste and Minister for Enterprise, Trade and Employment, Ms Harney in March.

All members attending a meeting of the Joint Committee on Agriculture, the Marine and Natural Resources yesterday criticised the proposal and said it could result in unfair competition in the sawmilling industry.

The deal has been strongly opposed by the Irish Timber Council (ITC), who say Coillte should not, as the monopoly supplier of sawlog to the sawmills, be allowed to control its largest sawlog customer, Balcas. The chairman of the committee, Mr John Ellis (Fianna Fail), said he was concerned about the system Coillte uses to sell its logs and he wondered could it be operated by an independent organisation.

Mr Paul Connaughton, Fine Gael, said if he was the owner of a private sawmill, he would be "very worried" about the proposal.

He said he found it hard to believe Coillte would not show favouritism to its biggest customer, Balcas, when it had an 80 per cent stake in the company.

Mr Lowery said there was no chance of this as the deal has to pass "very stringent competition legislation".

Mr Michael Kitt of Fianna Fail, said there was a conflict of interest in Coillte controlling its biggest customer and he asked Mr Lowery if the deal would result in job losses.

"There is no reason to fear job losses, we expect to see significantly more sawlog being processed this year than ever before," said Mr Lowery.