Media Release: Call to investigate Gusmão's rice contract for mates

FRENTE REVOLUCIONÁRIA DO TIMOR-LESTE INDEPENDENTE
FRETILIN

Media Release
July 7, 2008

Call to investigate Gusmão's rice contract for mates

The de facto Prime Minister of Timor Leste, Xanana Gusmao, is being widely condemned for awarding a US$14.4 million rice supply contract to a ‘mate’, without a competitive tender.

FRETILIN today called for an independent investigation into the contract which went to the company Tres Amigos, headed by Mr Germanu da Silva, Vice-President of Gusmao’s CNRT party, and an old friend and a member of Mr Gusmao’s Finance Department when he was President.

FRETILIN Vice President, former minister and MP Arsenio Bano today condemned the contract and called for a full and transparent independent inquiry into the deal that even some CNRT MPs have criticised as indicative of “Corrupt, Collusive and Nepotistic” conduct, known in Timor-Leste by its Indonesian acronym “KKN”.

“It is well known that Gusmao and Germanu da Silva are long time friends and political allies,” Bano said. “It raises many questions when the Prime Minister gives him a contract for US$14 million, with no public tender or other competitive bidding process.”

Bano said the growing furore in Dili over the rice deal would embarrass Gusmao’s “luminary foreign advisors who have shouted long and loud about the Gusmao government’s anti-corruption credentials”.

Bano said copies of contract documents obtained by FRETILIN, show that an original contract was awarded by Gusmao on 29 February 2008 for the supply and storage of 8,000 tons of rice, at US$510 per ton, with a total contract value of US$4.08 million. This original contract was amended by Mr Gusmao on or about 7 May 2008 to increase the amount of rice to be supplied to 16,000 tons at a unit price of US$900 per ton and a total contract price of US$14.4 million.

“When you read the copies of the contract documents, you see that at first there was one amount to be supplied for the price of US$4.08 million, then it was changed by hand to 10,000 tons, then it was reduced again by hand to 8,000 tons. It looks to us like rice price speculation on the run,” Bano said.

“This is very suspicious especially when it involves a single source contract, without any other competitive bidder being involved. To anyone looking at the documents, it looks like they have colluded to play around with the amount of rice to be supplied to get a better deal for the supplier.”

Critics of the rice deal include two MPs from Gusmao’s own CNRT party – Mr Cecilio Caminha, Vice President of the Parliament's Economics, Finance and Anti-Corruption Committee C (Timor Post 3 July 2008) and Ms Maria Terezinha Viegas (Timor Post 4 July 2008).

Arsenio Bano said Mr Gusmao could not legally commit his government to the contract purchase rice because parliament had not approved the budget.

Bano said there were serious doubts about the integrity of other major contracts awarded by the Gusmao administration, including for two patrol boats and two heavy fuel-oil powered electricity plants.

“To cover these and other contracts, the administration is seeking a supplementary budget increase of 122% for 2008. All indications are that they cannot be trusted with such a huge increase,” Bano said.
Bano said FRETILIN had already referred cases of suspected corruption involving Gusmao’s deputy prime minister and others to the Ombudsman for investigation.

Contact: Jose Teixeira +670 728 7080
Nilva Guimaraes +670 734 0389