Construcao das Centrais Electricas - Xanana ba Lasama. POWER Plant Mystery.

 

This letter, from Prime Minister Xanana Gusmao to the President of the National Parliament dated 4 November 2009, just 6 days ago, reveals much of the particular issues relating to the controversial power plant project signed between the Government of Timor-Leste and the Chinese 22nd Nuclear Power Plant company and about Government plans for electrifying the country.  In 2008 the Government of Timor-Leste promised to electrify much of the country by the end of 2009.  This appears to be impossible to achieve with less than two months left in 2009 and the power plant projects mysteriously on hold.  This letter reveals much behind the mystery and will be the subject of further Tempo Semanal inquiries.  To download the complete fil in .pdf format please click here.

 

Unofficial Translation

Democratic Republic of Timor-Leste

Office of the Prime Minister

Ref. No. 1981/GPM/XI/09

To His Excellency 

President of National Parliament, 

Dr. Fernando Lasama de Araujo

Issue:  Project for the “construction of power stations”

Excellency, 

Through this letter I inform your Excellency, and the distinguished deputies of the National Parliament, regarding the current situation relating to the project for the construction of power stations that will provide stable and regular electricity at national level, as has been desired by all Timorese long ago.

Following the allocation of budget funds needed to further this objective in the 2009 general budget of the state, for the phased construction of two power stations, the transformer stations and the distribution grid at national level, we entered into a consultancy contract with Elc-Bonifica JV (EB-JV) on the 16^th of July 2009, so as to ensure that the requirements and the results intended by the government would be complied with by the firm contracted to construct the power stations, CMI22.

Acknowledging now that the involvement of a consultancy firm in this process for the construction of the power station should have been considered earlier, in the mean time in this having been considered in the 2009 State Budget and approved by the National Parliament on 30^th of January 2009, given that the public tender process took more time than was initially anticipated and because of this the selected of the consultancy only began its work at the end of July.

Together with the consultant, we saw the need to make an immediate correction to the whole of the electrification plan of the country and consequently the correction of the respective contract for the “construction of the power stations”.  This decision was also pondered on the basis of the preparation of the strategic development plan, which is in its final phase, which has as its principal objective the integrated development of the nation and, in this sense, adding to the already obvious need to provide electricity to the whole of the Timorese people, increasing the need to guarantee that this project has long term sustainability to respond to the energy needs involved in the construction of infrastructure, development of the agriculture, industrial and tourism sectors, inevitable for the economic growth and well being for the Timorese.

This totally innovative and crucial project for the development of the young nation of Timor-Leste is without doubt a grand challenge that we want to overcome in an efficient, transparent and sustainable manner, to protect the best interests of the people of Timor-Leste.  This transition phase which the country is going through at this moment, is the passage from the post conflict period to a phase of national stability and security, constitutes a unique opportunity to create the basic conditions for the (step by step) start up of economic growth.

Therefore, and taking into consideration the perspective of foreign investment  that the government is increasingly coming to be able to attract, as with the anticipated development in the north of the country of industries for example minerals) tourism and other factories that allow the reduction of dependency on imports: and the plan to develop in a phased manner the south of the country,  through the construction of a refinery, a supply base and an LNG industry, amongst other projects, led us to decide on the increase of the electricity capacity which will not merely meet the current demands but that to the contrary, takes into consideration the medium and long term development.

In this sense and following the study undertaken by the Italian consultancy firm, we will proceed with the following alterations to the initial project:

·         The two power stations to be constructed, one in Manatuto and the other in Betano, would have had a productive capacity of 180 megawatts (MW), making the revised electrification plan coming to have a production capacity of 250 MW;

·         The initial plan to construct one of the stations in Manatuto with a capacity of 120 MW was altered to Hera and with the same capacity;

·         The initial capacity foreseen for the Betano station changed from 60 MW to 130 MW, taking into account the needs of the development of productive sectors on the south coast as previously referred to;

·         The high voltage transmission lines, with an initial capacity of 110 KV, suffered an alteration to a 150 KV and these same were extended from 630 kilometres to 749 kilometres, taking into account that the solution should be the most definitive possible.  After the revision of the plan, it was considered that the KV foreseen in the initial plan will not have sufficient capacity in the future to support the projects in the long term.  Because of this we consider that it would be more prudent to act immediately than to wait until the project is implemented that would later have to be restructured, with the respective inherent additional costs.

·         The increase in the length of the medium voltage distribution lines of 20 KV to 120 kilometres was also considered as  a way of covering the district, sub districts and communities;

·         On the other hand, the initial plan to use a station in Hera as a back up to Dili changed tot eh Comoro station, taking into account the demands of new infrastructures to be constructed in the future in the capital of the country;

·         It was therefore considered that due to the physical irregularities of the country (its topography); “in the new activities plan” the construction of transmission line towers and sub stations will have priority, whilst the physical construction of the two power stations proceeds.  These lines are in fact fundamental because more importantly than having places for the production of electricity, is to guarantee its distribution to the people in general and to the zones of development.  In this sense we opted for a longer time frame, but also more prudent, so that this project fundamental to the start up of economic growth will be the structural change that Timor-Leste needs.

·         Opting for a longer period for the implementation of this project does not mean in the mean time that it will not be concluded earlier, but after verifying “in loco” the of difficult access, it became prudent for us to extend the timeframe for the implementation and the extension of the transmission grid.

Following these alterations to the initial project and taking into account the timeframe for the implementation will be up to 2011, there will therefore be sufficient time to proceed with the ordering of new generators for the two power stations.  This strategic change which included, above all, guaranteeing the general transmission and distribution to secure access by the population, will permit the acquisition of generators during an acquisition period estimated for at least 12 months.

I take this opportunity to clarify to the distinct deputies, that with respect to environmental questions as well as compliance with international standards, whether it be in the configurations or in the contractual documents, these are being seriously considered by the government.

In this sense, the use of fuels considered to be polluting which has generated such buzz in some distinct deputies, is a question being considered along with their suggestions.

I should merely add that, whatever type of generator is acquired, it will have the potential of using one of the sources of energy – gas, diesel or heavy oil – in accordance with what will be considered more adequate to the specific circumstances of the country.

In conclusion, when the project is in the final implementation phase, the government will present to the national parliament the various options for expenditure in relation to the fuel to be used – from the more expensive to the least – so that the decision can be made through an evaluation of the budget framework.  The development compromise with responsibilities over one of the poorest nations of southeast Asia is a question of principle and determination.  In the mean time, we cannot ignore the context of our current reality, and the frequent need to assess data and priorities and the perception of daily challenges in various specialized areas.  This demands flexibility and timely revisions to all of the plans in order to achieve the more efficient plan.

The perception that our society is unique, with great difficulties in terms of know-how and human resources, and that only a constructive vision of together overcoming the inherent obstacles of our own reality cannot be neglected.  I would like to illustrate this observation with a very practical example and one that is generally known to all distinguished deputies – we inherited a procurement law based on the best international practices of the most developed countries but, unfortunately, our own society is still in the phase of learning the simpler processes of fulfilling these intrinsic purposes of this process.

Step by step and with a strategic vision, we are capable of continuing to secure the basic and immediate needs for electricity, through the investment in generators and the construction of high voltage transmission lines, whilst we can also invest now in the future, in the medium term, to significantly alter the state of the nation.

Counting on the active participation of distinguished deputies of this project of relevant national interest, I present my highest esteem and consideration.

Government palace, 4 November 2009

Kay Rala Xanana Gusmao – Prime Minister