“CHINA TALES”

THE HEAVY FUEL OIL POWER PLANTS IN TIMOR-LESTE

English version

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.

ISSUES WITH TECHNOLOGY

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).

ISSUES WITH OF E N V I R O N M E N T A L S T A N D A R D S 10
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).

2500
Company
World Bank
2000
mg/Nm3

1500

1000

500

0
Figure 1- A brief comparison between World Bank
SO2 NOx
Pollutant Standards13 and Chinese Standards14

ISSUES WITH 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 Y 15
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 R 18
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
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.

FUELING THE REFORM

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
ISSUES WITH ENFORCEMENT OF E X I S T I N G L A W 22
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.

ISSUES WITH 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 S 24
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,