“CHINA TALES”

T H E H E A V Y F U E L O I L P O W E R P L A N T S I N T I M O R - L E S T E

E n g l i s h v e r s i o n

It is a great honor to be here today, I will have to beg your forgiveness if I sound over-passionate, I

know that I’m still young and unlearned and, as you may have noticed, Timorese politicians have

gone to a great lengths classify what actions and reasons for my activities in both local and

international newspapers1.

To my classificatory brothers and sister I would like to remind that:

The purpose of classification is not to set forth final and indisputable truths but rather to afford stepping

stones towards better understanding2.

With this in mind, I hope that this small presentation gives my audience stepping stones to

understanding some of the issues involved in the Heavy Fuel Oil (HFO) Power Plant construction

in Timor-Leste, and Timor-Leste’s current Energy Sector Strategy.

The HFO Power Plant is the largest infrastructure development envisioned by the current regime

and brings to light, according to Governments officials, the first step in Timor-Leste’s “real progress”3.

This case has since its announcement became the single most contested Government decision.

Just to put it into perspective the Government has allocated more money in 2009 for the

construction of the Power Plant than the budget4 for the entire activities of the Ministry of

Education, Health and of the Ministry of Agriculture. And even if we add the three ministries the

total budget is still significantly less than the budget allocated for this single development (Table 1).

1 I have been classified by the President of the Republic in a speech in 26 of November 2008 as “terribly unintelligent”, please check read through Agência Lusa (Portuguese News Agency), as anarchist, as subversive, the list goes on and on. 2 Graton, L.C. in Fred M. Bullard, Volcanoes of the Earth Chapter 4 (p. 30) 3 Government Media Release: East Timor to Electrify the Nation 4 Excluding the salary and wages

Table 1. Budget Projections (2009-2011)5

2009 2010 2011

POWER PLANTS 85,000 160,000 120,000

MIN. EDUCATION 37,379 22,754 18,852

MIN. HEALTH 21,406 20,849 22,934

MIN. AGRICULTURE 8,588 7,829 8,399

Other than the disparity in budget allocation and the eminent marginalization of Education, Health,

and Agriculture Sectors, the Government decision has been heavily criticized for the lack of

transparency6 in the tender process and in the very process of selecting of the winning bid7.

I S S U E S W I T H T E C H N O L O G Y

Despite the exorbitant price, the generators, the heart and soul of the Power Plants is outdated, frail

and heavily polluting. China Nuclear 22nd Nuclear Industry has sold second-hand, decommissioned

generators produced some 30 years ago. Neither one of these generators (Sulzer Generator Sets

14ZAV40S, PC-4 and PC2-6) can actually run, as they are, on natural gas, as assured by the Prime

Minister in National Parliament8. Interestingly, the Minister of Infrastructure has been quoted by

Chinese Government Official document(s) as saying that “Timor-Leste intends to purchase some

second-hand diesel or heavy oil generating sets to address power supply shortage immediately”9

months before the announcement of any international tender, the winning bid company has

apparent links with some of the entrepreneurs and companies that have him during his visit to

Guangdong Province (as mentioned in the Government media release).

I S S U E S W I T H O F E N V I R O N M E N T A L S T A N D A R D S10

The winning company has pledged “to the highest standards implemented by People's Republic of China”11as

incongruous as this may sound given China’s environmental reputation, these standards are actually

higher (meaning better) that the ones imposed by the Government12, that would allow the Company

5 MoF (2009). State Budget, book 2. 6 Asia Times, http://atimes.com/atimes/Southeast_Asia/JL03Ae02.html 7 Kla’ak edition, 45, front page, presents official letters and exchanged diplomatic notes between the Timorese Embassy in Beijing and China Merchant Bank proving that the company presented a series of forged documents to the evaluation panel 8 For better understanding and explanation please read through Kla’ak edition 42, pg. 9 and references therein 9 http://www.gdfao.gov.cn/english/news/guangdong/200802270021.htm 10 For more information read through the NTN report available from www.laohamutuk.org 11 Project Outline pag. 48-51 12 These standards were announced by President Horta in his speech “Timor-Leste, Challenges in Nation-Building and Peace Consolidation” Address to the Security Council New York, 19th February 2009

to pollute 50 times more (NOx) than the allowable by the standards proposed by the company

(Fig. 1).

Figure 1- A brief comparison between World Bank

Standards13 and Chinese Standards14

I S S U E S W I T H P R O P O S E D M I T I G A T I O N T E C H N O L O G Y15

The Timorese Government has signed off a contract (No.RDTL-812931) in which its project

outline mentions not only in some cases “shady” pollution abatement technology but in other

inexistent technology16. Furthermore National Toxic Network has put out a report alerting to some of

the environmental imbroglios signed-off by the Timorese Government.

Nobody actually knows what is written in contract No.RDTL-812931, as the government has denied

to provide copies National Parliament, the courts and citizens. This opens doors to the discussion of

important legislation such as the “Freedom of Information”. The President says he has seen the

document however he didn’t do any photocopies, therefore his Excellency could not provide any

photocopies to local NGOs17.

B R I T T L E P O W E R18

As rightfully pointed out by La’o Hamutuk, the way in which the power grid is designed is over

centralized, thus making it frail, in theory, a malfunction in one of the power stations (some that

13 World Bank (2008).Environmental, Health, and Safety Guidelines for Thermal Power Plants 14 Boiler air pollutant discharge standards” 01313271-2001 and “Air Pollutant Emission Standards for Thermal Power Plant” G1313223-2003 15 For more information read through Kla’ak edition 43, 13 April, page 8-9 and references therein 16 Ibid. 17 Meeting between Rui Pinto and Dr. José Ramos-Horta, 19th June 18 For more information please refer to La’o Hamutuk’s bulletins

0

500

1000

1500

2000

2500

SO2 NOx

mg

/Nm

3

Pollutant

Company

World Bank

happens very often in Timor-Leste in case you haven’t notice) with switch off 1/3 of the country.

Furthermore the grid design is not able co-opt the alternative energy such as wind, geothermal, gas.

F U E L I N G T H E R E F O R M

I have put forward a series of renewable energy alternatives (some of which the next two speaker

will mention) to government officials as a way of showing that Timor-Leste has other clean energy

alternatives.

Table 2. Alternative 1 a series of decentralized hydroelectric plants

Lautem Iralalaro 28 MW

Atasabe Magapu River 11 MW

Ossu Kuiña River 11 MW

Soibada Buarahun River 12 MW

Airnaro Be lulik River 19 MW

Laclo I River system 20 MW

Laco II River system 24 MW

Laclo II River system 8.5 MW

The President Office has received a copy of a proposal put forward by Lotus mentioning a series of

feasible sites to establish wind farms (Figure 2)19 nonetheless, the Office has approved the 2009

budget allocation for this over expensive and polluting project.

Figure 2- Image take out of the Lotus wind studies signaling the

possibility of feasible wind power farms.

Besides that, Timor-Leste does not produce any HFO, which means that the country would become

dependent on suppliers such as IPALO20, PUALAKA21 and most of the money would go abroad.

19 This document has been leaked to the media and since some government officials have denied the existence of such studies. 20 Managed by the husband of another prominent Minister 21 With notorious share holders such as Minister of Justice’s husband

I S S U E S W I T H E N F O R C E M E N T O F E X I S T I N G L A W22

In accordance to Timor-Leste’s legislation the Government bound by law to commission a

Environment Impact Assessment before starting any of the works. The Prime Minister refused to

do follow the legislation as he was tired of conducting studies23. Based on the legislation the

Government can be taken to court and the Prime Minister and/or the Minister for Infrastructure

may face imprisonment for not complying with the environmental legislation.

I S S U E S W I T H I N T E R N A T I O N A L E N V I R O N M E N T A L A G R E E M E N T S24

Timor-Leste has ratified Kyoto and signed a series of international environmental agreements. In

accordance to these documents the Government of Timor-Leste is bound to reduce emissions and

ensure that the choices do not compromise the future generations. This Project is in clear breach of

all international environmental agreements, despite so, and despite having been warned by National

Parliament the Government chose to continue with this project.

Government officials have given their interpretations of what is “legal binding” and what is not and

have categorically announced that Timor-Leste has no intend of following the international

conventions nor has the obligation to ensure less polluting sources of energy generation25.

22 Kla’ak edition 44, pg. 4 and references therein 23 National Parliament 24 Kla’ak edition 43, pg. 6 and references therein 25 Interview with the Secretary of State for the Environment, “TL La Iha Obrigasaun Hatun Emisaun Oliu Pezadu” [Timor-Leste does not have any obligations to reduce the emissions generate by Power Plants] edition 08219, Thursday, 19th March 2009,