The Government chooses more expensive fuel fattening Sunshine whilst the public loses US$810,000.00.

Jacinto Alves: You should looking at me.

In the middle of the month of May 2009 the Fourth Constitutional Government was forced to terminate the fuel supply contract to the EDTL by the company Pualaka Petroleu after there was a clash between the three directors.

When the contract with the Company Sunshine ended, the government opened a public tender through its central procurement, which a number of companies competed for in the month of November 2009, and the company Sunshine continued to supply fuel to EDTL.

This tender process took some time, up to the time when the government announced to the public that the company ETO had won the tender. The other companies lodged protests and allegations of Collusion, Corruption and Nepotism emerged as well as concerns of a monopoly being created because the director of ETO is the nephew of the Prime Minister Xanana and he had also been awarded other project tenders by the government at the time.  As a result the government was forced to freeze the tender until now.

Consequently the government extended the contract with the company Sunshine up to 31/01/2010.  For the month of February until now into March it is still the company Sunshine that is supplying fuel to EDTL and the result of the tender is still not known.  As a result the total time duration in which Sunshine has been has now been supplying fuel to EDTL has been nine months with an original six-month contract that was merely extended from the end of December until the end of February.

FRETILIN MP Arsenio Paixao Bano from FRETILIN loudly questioned this contract extension through a telephone interview alleging that, “when a contract is amended but despite the price of fuel falling, they still continue with a higher price then this is theft of public moneys.”

According to invoices from Sunshine Petrol group number 53/SPG/P.O/RDTL dated December 2009 the company Sunshine supplied EDTL with fuel valued at US$00.953 whilst other importing companies like Pertamina sold fuel at between US$00.79 – US$00.80 and Atauro Oil sold fuel at US$00.78 per liter.

A comparison of the price between sunshine and Pertamina results in a difference of US$00.15 (fifteen US cents) and compared with Atauro Oil’s price that shows that the public loses US$00.17 (seventeen US cents) per liter.

This difference in prices shows that for the month of December the state lost US$450,000 that could have been saved and used for some schools instead of being wasted as Bano said.  On Monday last the FRETILIN parliamentary bench in the plenary of the national parliament questioned the condition of a school located at the foot of Mount Matebian, which was in a decrepit condition, insufficient rooms for all the students, in need of teachers, without a room for the staff and yet the state carelessly threw away US$450,000.

He alleged, “public funds were stolen because the price of fuel feel but the government carried on as normal.”  He added to his accusation that, “If the price fell and the government decided to pay the same price they had been paying, then that means stealing from the public purse.”

“If a tender has been held, but the contract is yet to be signed but is merely extended, then why hold the tender in the first place?” Bano questioned.

According to Bano, “this should not happen, this is maladministration. Who will take responsibility for facilitating this contract, these persons who did this are irresponsible, immoral, are not serious or responsible,” alleged Bano.

Arsenio said that on one hand the government spends money without properly calculating what it is spending but on the other hand the peoples’ living conditions is still very poor. “this is throwing money out aimlessly just in order to fatten up a few people,” he accused.

The Vice President of the most voted party who lost the opportunity to govern in 2007, thus becoming the major opposition party said that, “the problem with the government is that they do not have a plan, so they just throw money away aimlessly, just to fatten up some people.  Look at the schools many of which are in a state of disrepair and instead of repairing them they fatten up companies with contracts such as the type Sunshine was given.”

He said that if they calculate their spending properly then they will save a lot of money that they can use to pipe water to communities and fix quite a few schools in Dili and in rural areas including to better a lot of the irrigation schemes that are not currently functioning, instead of looking after companies who sell with a price that causes a lot of concern and doubt,” Bano said.

The MP followed up saying that according to the normal processes you cannot make more than one amendment for the same contract.  He explained that you could amend a contract once after a tender has been held and the winning bidder has been announced.

Responding to the concerns of Mr. Bano, Joao Martins who is the owner of Sunshine said that the government selected his company because of its superior service in the last nine months when it had faced problems with the previous supplier. “The government made this decision and I just followed them because I assumed the government acts in Timor’s interests,” Joao Martins told this newspaper during an interview at Hotel Timor on Thursday, 25 February 2010.

According to the invoice from Sunshine Petrol Group that was signed by its general manger Chian Choon Ning on 24/12/2009, which this newspaper was able to obtain, it was written on the front page and second page that the amount of fuel supplied to EDTL was 1,257,890 liters to generate electricity for 12 days in Dili, whereby the state paid US$1,198,768.17.  “Right now we calculate that more or less EDTL consumes 3.5 million liters per month,” said the Sunshine company proprietor Joao Martins.

Responding to questions regarding the price of Sunshine fuel being more expensive than the others Mr. Martins said, “When we compare the price of fuel we must compare apples with apples.” The reason it is more expensive than other fuel is that, “their (the other companies) fuel is light heavy fuel, or NGIO with 1.5% sulfur or 1% I don’t know, but Sunshine’s fuel is High Speed Diesel fuel with sulfur content 0.05% and this is superior quality from that of those who are claiming that this fuel is more expensively.”

He explained that regarding the price of fuel for the month of December, “If we compare from December till now, the price of fuel pre barrel rose to US$80.00, so for this very reason we have to look at the fact that this fuel comes from a premium refinery that is properly refined and therefore its quality of price is evaluated in this context.”

According to Joao Martins, “at the moment we calculate that EDTL consumes approximately 3.5 million liters per month.

He thanked the government for the confidence they had in him to work together with them in the electricity sector.  “I want to thank the Government for seeking stability in Timor and Sunshine will also makes its own efforts to ensure that the power stays on in Timor,” Joao closed.

According to documents obtained by this newspaper from the Office of the Secretary of State for Electricity, they show that the company Atauro Oil had already sent a quotation price for fuel for January and February 2010 to the relevant office.

“I want to present to you a price quotation for High Speed diesel for the current month of January (2010),” sated the quotation document from Atauro Oil Supply LDA.

This quotation presented a price for the fuel of US$00.77 (seventy seven US cents) per liter and Atauro quoted a price per liter for February of US$00.80.  This compares with the price quoted by Sunshine of US$00.893 per liter for the month of January, which is US$00.12 (twelve US cents) more expensive.

If the government had accepted the January quotation from Atauro it would have saved the public US$360,00.00. The government decision to buy fuel in December 2009 and January 2010 resulted in a total loss of US$810,000.00 to the public.

Atauro oil also presented other documents such as “certificate of quality” from Schutter Far East Sdn Bhd guaranteeing that Atauro Oil would be importing High Speed Diesel.  The director of Atauro Oil Mr. Lorenco declined to make any comments when this newspaper tried to confirm this with him because he did not wish to embroil himself in problems with other companies.

But MP Inacio Moreira condemned strongly the moneys misspent by the state arising from the calculations presented in this article.

“They have to do the mathematics on the funds allocated for fuel acquisition properly; they should not exaggerate the price of fuel; the price fluctuations in the world market should be taken into account.  I see that the company that is presently supplying fuel to the EDTL has an exaggerated price,” alleged Moreira.

“The government should select the company that sells fuel at the lower price so that the state budget benefits instead of buying more expensive fuel simply to enrich a company in which they have friends,” Moreira lamented.

He suspected that, “This was clearly a case of not doing the mathematical calculations but just deciding to go ahead, I suspect that this was intentional.”

The MP suggested that, “the government should have sought quotations from all companies that import fuel so as to evaluate which could supply the cheapest fuel.”

Moreira too said that the price at which Sunshine supplied fuel was “over the top”.  His reasons were that, “the world price fluctuations is usually between 70-80 cents per liter, so why is that the government decided to acquire fuel as high as 95 cents?  This needs to be investigated, as perhaps this did not involve a proper evaluation process but that was simply decided on.  I have my suspicions that this was intentional,” alleged the MP from the FRETILIN parliamentary bench.

“Such conduct that breaches the law or involving ill intent to just hand over benefits to one another cannot be permitted to go on,” said Moreira.

The MP suspects that there are many doubtful issues surrounding the process for supply of fuel.  “One thing for example, Sunshine has some relationship with a member of government; so from our point view it is like handing out favors to one another, with a price that we can see is inflated, because we can all see that the price fluctuation has gone from 70 cents but not beyond 80 cents.”

He said that for some time now the contracts for supplying fuel to EDTL has been given to family of members of the government, so he asks, “that there needs to be control exercised by the government to ensure that the fuel supply contracts are decided on a proper basis.  They should not be allowed to just pass on favors to one another, but there has to be a process according to the law because all Timorese businesses should have the opportunity to compete for these contracts because many have the capacity to fulfill the contracts with the EDTL,” Inacio declared.

EDTL staff also acknowledged that the price of fuel from Sunshine was more expensive and so on the 29th of January 2010 the Director General of EDTL Mac Maidens wrote letter reference number 018/DG/1/10 to Manuel Monteiro, director of Procurement at the Ministry of Finance stating,

“Based on the letter from the Secretary of State for Electricity, Water and Urbanization with reference number 10/SE-EAU/1/10, the EDTL national directorate wants to request that you decide on Atauro Oil Supply, and EDTL wishes to confirm that the price from the current supplier of the fuel to EDTL (Sunshine) is very high compared with what we have ascertained from the price of fuel in the market.  Thank you for our collaboration,” signed by Mac Maidens, which was also Ccd to the Minister for Infrastructure, the Secretary of State for Electricity and the director General of Financial Administration at the Ministry of Infrastructure.

According to another document from the Secretary of State for Electricity he acknowledged that fuel from other companies was better than Sunshine’s.

When this newspaper questioned the Secretary of State’s document ref. 10/SE-EAU/1/10 he pretended diplomatically saying, “The tender was not done here, but was done in Central Procurement, so I do not know and you have ask there.”

He explained with a curious face that, “The contract was done in the Ministry of Finance so ask there, because we just wait and receive. When it involves a contract for a large amount they advertise and evaluate, we only send our technical people to sit together to help them decide and we just comply with the decision that is made.”

When this newspaper tried to seek clarification from Francisco Soares he said that, “The issue is not the price, but it depends on the price in the international market which is always fluctuating.”

When asked why they had given the contract to Sunshine again Burlaku argued that, “because they had previously won the tender, that is the reason, they were still contracted because they had been through a process.”

It is interesting though that the shift from Pualaka to Sunshine has been described as a rotation as the director general of Sunshine himself said.

Francisco also explained a little regarding the tender that ETO had already won.  “Just wait for the government’s decision, because the government has not yet decided, so Sunshine will attend to our needs.”  Despite Mac Maidens having already stated that Sunshine’s fuel was more expensive Francisco Soares continued to maintain that it should be Sunshine.  The Secretary of State Januario Pereira has already proposed another company that sells cheaper fuel that will save public funds that are being squandered.