Government incompetence killing the National Electrification Project

MEDIA RELEASE


Dili, 4 April 2011


Government incompetence killing the National Electrification Project


Timor Leste’s National Electrification Project has been clouded by failed contracts let without tender and its estimated cost has almost tripled to US$900 million, Aniceto Guterres MP, parliamentary leader of FRETILIN said today.


Mr Guterres said the cost blowout would likely go even higher because the project which started in 2008 is less than half built, although it is difficult to measure how much has been completed because of the patchy nature of the work. It is however due to finish this year.


“The Gusmao administration has bungled the procurement, contracting and monitoring of this vital project,” he said.


“Public money has been squandered through costly delays and the quality of the infrastructure has been compromised, as revealed by a damning report from the Italian consultants.


“As the head of the government, Prime Minister Gusmao must be made accountable for this disaster.”


In 2008 the Gusmao Government contracted the China Nuclear Industry No. 22 (CNI 22) company without tender to provide and install old and highly-polluting heavy fuel generators, substations and a national medium voltage transmission line at a total cost of US$377 million – almost one third of the sum now budgeted to be spent by completion.


However, in November 2009, after opposition from FRETILIN and national civil society groups, Mr. Gusmao ditched the Chinese heavy fuel generators in favour of new dual fuel capability generators from Finnish company Wartsilla – again without a tender.


China’s CNI 22 would remain contractually responsible for building the power stations, sub-stations and transmission lines, under the supervision of Italian consultants ELC Bonifica, who were retained by the government.


Mr Guterres said Mr Gusmao had never explained why he was determined to give the original contract to the Chinese CNI 22 company without a tender, without any economic feasibility, environmental or other technical studies and without properly assessing the company’s capacity to handle the job.


“Other companies put forward better alternatives but the government specified it had to be heavy fuel, meaning the process was a charade to ensure the contract went to CNI 22.


“It is well known that Mr Gusmao’s close political ally and friend Germano da Silva has some involvement with the company CNI22.


“The government has refused to show parliament copies of the contract documents nor any of the technical studies, if any were ever done.”


Mr Guterres said other National Electrification Project contracts let without tender went to the Indonesian company Tehate for construction of the Liquica –Maliana –Suai - Betano part of the power transmission grid, and the Indonesian company Puri Akraya Engineering Limited, for procurement.


“Monitoring and oversight of the works by ELC Bonifica points to costly delays, very poor workmanship and mismanagement of environmental and workplace safety by CNI 22,” he said.


In its report of January 2011 ELC Bonifica said: "With the present trend we believe that the Contractor is not able to meet the completion dates given to H.E. the Prime Minister.”


The report continued: "From Liquica substation up to Lospalos substation ... no substantial progress is visible. The number of towers in this north part of the Power Grid is 554, at the end of January a total of 249 towers were erected, but many of them have missing pieces, are incomplete and require additional time to make an overhaul."


"The situation which seemingly had improved as far as the quantity of the work is concerned had been badly darkened and affected by the quality of the workmanship. A lot of reparation works are required and therefore towers can not be considered completed."


"The conductors strung in the section of 10 towers in Hera-Manatuto have been heavily damaged and must be dismantled and done again. The heavy deterioration of the quality of the workmanship in the transmission line, the tower erection and the stringing of the conductors are carried out in a manner which do not have a proper word to be described ­ ghastly ­ horrible, the photos produced as evidence of the quality of the work show that workers are not at all qualified rather they are common labourer. The Contractor is warned that all the towers with defects and conductors damaged will not be paid for till all adequate reparation is carried out. The Consultant had shown a lot of tolerance collaborating in order to have the work done fast, but there is a limit to be tolerant .... Those workers responsible of this situation are incompetent and should be sent back to China and replaced,” ELC Bonifica said.


For further information please contact Jose Teixeira MP on +6707287080