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 Heavy Oil Power Project not yet stopped

Response from La'o Hamutuk to article in Australian newspapers

24 March 2009

Click here for more information about the heavy oil power project.

On 18 March 2009, the Melbourne Age reported that Timor stops work on power plants in (text below), a version of which also appeared in the Sydney Morning Herald. The articles headlined that Timor-Leste President Jose Ramos-Horta had ordered that work on the Heavy Oil Power Plant project be halted.

These articles are incorrect on many points, including their main one. Work on the heavy oil power plants has not been suspended, and President Ramos-Horta has not asked for it to be stopped.

When I asked journalist Lindsay Murdoch where he got the information in this article, he replied that it was solely based on President Ramos-Horta's speech to the RDTL National Parliament. However, the President simply expressed his concerns about transparency, national consensus, and environmental issues relating to the heavy oil project. As neither civil society, Parliament nor the President has been allowed to see the contract between the RDTL Government and Chinese Nuclear Industry 22nd Construction Company for this $375 million project, Mr. Ramos-Horta had to speak in generalities.

The President's request for "an independent body that will carry out an environmental impact assessment and a technological evaluation to determine the risks that the project poses to the environment" merely underlines what is already required by the Indonesian law currently in effect in Timor-Leste, although it appears that the Government was not intending to prepare an independent, public, EIA prior to proceeding with the project.

The Age and Sydney Morning Herald cited the President as stating that work has not yet begun on the project. In fact, land clearing began at the Hera site in early February, and continues to this day. (See photos.) In addition, for a project as large and complex as this one, much is done before on-site construction starts: research, design, detailed engineering, subcontracting, hiring, purchasing, etc.

The President correctly pointed out "how important it is to provide more information and to ensure greater transparency ... [to] seek to generate the broadest consensus possible." La'o Hamutuk will continue to research this project and publish information as we receive it, and we continue to be concerned about the secretive policies which envelop many aspects of the heavy oil power plant and national electricity grid project, by far the largest undertaking ever in Timor-Leste.

On 4 April, the same newspapers published East Timor hit over 'dirty' power plants, also by Lindsay Murdoch, which corrected many of the errors in the earlier article.

Timor stops work on power plants

The Age,  March 18, 2009
Lindsay Murdoch, Darwin

EAST Timorese President Jose Ramos Horta has intervened to delay the construction of three second-hand and highly polluting electricity plants.

Mr Ramos Horta told parliament yesterday that concerns about the plants needed to be dealt with, including the way the $US400 million ($A606 million) deal was negotiated with China for their purchase.

He said he had asked the coalition Government to establish an independent body to carry out an environmental impact assessment and technological evaluation of the country's largest infrastructure project. That group would determine any risks that the project posed to the environment.

Environmental groups, non-government organisations in Dili and the Fretilin opposition have criticised the purchase of the plants amid secrecy and rumours about irregularities in contracts with the Beijing-owned Chinese Nuclear Industry 22nd Construction Company.

The deal would oblige gas-rich East Timor to import heavy oil for at least three decades for plants using difficult-to-manage technology that has already been phased out in many countries for environmental reasons.

La'o Hamutuk, an independent non-government organisation in Dili, said the plants that had operated in China for more than two decades would create acid rain, water pollution, toxic solid waste, particulate air pollution and greenhouse gas emissions.

Mr Ramos Horta told parliament he shared many of the concerns, including the "technology to be used, its environmental impact, the costs involved and the reciprocal arrangements that were negotiated with the company to whom the contract was awarded".

His unusual intervention comes amid growing concern about lack of transparency in the awarding of government contracts and possible high-level corruption in Dili.

He said Prime Minister Xanana Gusmão had assured him he would accept any recommendations from the independent body and that if the plants went ahead, the Government would be "meticulous and transparent" in managing them.

Construction on the first plant near the coast at Hera, a few kilometres east of Dili, was to begin last month but has been delayed. The Government has said the power plants and a national power grid would be operating by the end of the year.

La'o Hamutuk questioned the project after the Finance Ministry gave only three weeks for expressions of interest in power generation in June 2008.

"We believe that the Government already knew who would get the project and conducted an open tender only as a formality," La'o Hamutuk said. It described the project as unrealistic, saying the plants would generate so much electricity that they would make alternative energy power sources unnecessary.

The plants would not be able to use oil and gas found in East Timor or in the Timor Sea.


The Timor-Leste Institute for Development Monitoring and Analysis (La’o Hamutuk)
Institutu Timor-Leste ba Analiza no Monitor ba Dezenvolvimentu
Rua dos Martires da Patria, Bebora, Dili, Timor-Leste
P.O. Box 340, Dili, Timor-Leste
Tel: +670-3321040 or +670-77234330
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