• OGE 2012- LAST DAY DEBATE- in Specialty, Friday, 25 November 2011

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OGE 2012- LAST DAY DEBATE- in Specialty, Friday, 25 November 2011

On the 25th of November the Parliament held its Last day Debate in Specialty on the OGE 2012, in an intense but democratic environment. In this session, the plenary continued its discussions on the annex two, the Infrastructure Funds, starting with the answers from the Government to the questions emanating from the previous sessions.

Minister of Agriculture, Mariano Sabino responded to the questions from proponents (Antonino Bianco and colleagues) regarding a “missing money of almost $2 Million” in relation with the Bebui’s Irrigation (proposal N. 141), said that when he started his job as Minister of Agriculture and Fishery, he faced various irrigations options /designs, one of them was Bebui Irrigation. In the meantime, PM advised him to choose Bebui as the top option due to its historical contribution during the struggle for independence. Regarding alleged missing money, he strongly denied the allegations and emphasized that the Bebui irrigation is a multiyear project from 2008 -2011. According to the contract, the contractor company will only be paid according to the progress achieved, and on an assessment report made by the MAF assessment team. This report will be verified by the Minister of Agriculture who in turn will submit recommendations for payment to Ministry of Finance. He further explained that due to climate change, the contractor could not achieve a desired level of progress in 2010, hence no payment could be made and the money was returned to the state cash. The project is now completely finished and just waits for inauguration by Prime Minister shortly. This year, MAF has allocated a budget of $198,000 for some small repairs on the facilities due to high sedimentation that has obstructed the water flowing into the irrigation channels. Therefore, the ceiling of the contract remains at $8.9 M and not $11 M as alleged by proponents.

Vice Minister of Justice, Ivo Valente said that his ministry has no objection as to the proposal N. 85 by Fernanda Borges regarding the Juvenile Detention Center, with a budget of $700,000. He underlined that the spirit of this project is in line with the Article 3, of the constitution. In this connection, he informed that the draft law on Juvenile Penal Code is now in the Parliament for debate and approval.
Other proposals relating to Ministry of Justice are: proposal N. 86, on rehab of prison in Suai and the proposal N.90 on the construction of 12 districts Land and Property Offices, all the three by Fernanda Borges. Meanwhile the proposal N. 89 on elimination of budget for Criminal Investigation Center by Antonino Bianco and colleagues was cancelled by the proponents themselves. VM suggested the budget concerning proposal N. 90 to be transferred to PDD II as the amount will be around $200,000 for each.

Minister of Finance, Emilia Pires, suggested that the N. 85, and 86 should be placed in the ministry of justice according to decree laws in force on procurement decentralization issued in 2010.

Further intensive debate was concerning the budget of $800,000 for construction of CAC office (proposal N. 54, by Fernanda Borges) that was eliminated and shifted from CAC budget to be posted under Infrastructure Funds. In this regards Minister Pires explained that decree law stipulates that “any amount above $1 M, or a multiyear project, must be placed in the IF “(managed by ADN).
Fernanda Borges added that this budget is to finance the initial phase of the construction, and that the design has not been prepared yet, due to land provision problems.

Minister Pires agreed with VM of Justice and confirmed that the 12 L&P districts offices should be placed in the PDD framework.

Minister of Social Solidarity, Domingas Alves commented on two proposals, 111 and 112, both by Virginia Belo and Riak Leman.

Proposal N. 111 by Virginia Belo which proposed reduction of $348,000 from $708,000 to be reallocated for construction of regional office of MSS in Same (Proposal N. 112) justifying that it is not mentioned in the budget book N. 6. Minister Alves admitted that her ministry did not allocate budget for regional office in Same, therefore her ministry will split the existing budget of $708,000 for rehabilitation of the old building of MSS in Caicoli and for new regional office in Same.

The proponents then cancelled their two proposals n.111 and 112.

Proposal N. 83 by Antonino Bianco and colleagues proposed reduction of $5.5 M from the allocated budget of $9.5 M for the MOF building. This budget is the first phase budget from the whole budget of $35 M until the building is concluded in 2016. This was one of the crucial points during the debate. Proponents said that this sky building and one of the mega projects like this in TL is an irony because many people are still poor and struggling for their basic needs. Other reason of rejecting this project is the absence of legal basis to regulate the buildings construction in the country, in terms of size, height, etc.; they also justified that with such a tall building, it will be easily exposed to high risk in case of an earthquake because of the volatility of soil structure in Dili.

Minister Pires responded that the office is extremely necessary because currently the ministry has many staff using kobe houses and lots of archives are unsafe due to lack of space. Minister underlined that as a key institution of the state and responsible for the nation’s money, it has to be ensured the security of the systems and the archives to be kept in the safety manner. To convince, Minister informed that an engineering design has been completed, and the engineers have guaranteed that the building will be resistant to earthquake. According to contract, the company will bear the liability in the amount of $5M in case something happen to the building. The total budget is estimated to be around 28-30 M and the company has done its due diligence on the site. It will take maximum 3 years to conclude the project.

The proposals were voted as follows:
Proposal N. 141 (Bebui irrigation), in favor 19, against 31, and abstain 6, not approved;
Proposal N. 54 (CAC office), in favor 48, against 1, and abstain 8, approved;
Proposal N. 83, (MOF building), in favor 22, against 34, abstain 1, not approved;
Proposal N. 85 (Centro detencao menores), in favor 43, against 3, abstain 11, approved;
Proposal N. 86, (rehab prison Suai), in favor 46, against 1, and abstain 10, approved;
Proposal N. 39 (12 Districts L&P offices), in favor 39, against 2, and abstain 16, approved;
Proposal N. 118 (construction of National Resistance Museum and collection of relating documents – $2.5M), in favor 39, against 2, abstain 16, approved.

Note: 4 proposals, n.54, 85, 86, by Fernanda Borges and Domingos Mesquita, both from PUN) were approved almost unanimously by AMP and some from Fretilin.

Another cluster of proposals were also presented for discussion, such as : n. 102, n. 103, n. 84, n. 117 and n. 140.

Proposals N. 103, by Joaquim Amaral and colleagues proposed reduction of $100 Million from $261.3 Million for what they called “mega project” Central Electrica Hera and Betano. Proponents justified that in 2011 the government has also allocated $445.7 Million for the same category, for purchase and installation of generators and transmission lines. Proponents alleged that the huge money was used and transferred to other projects without transparency in such a way that parliament has not been unable to control. Joaquim said that the mega project has spent more than $1 Billion since 2008, but people have not benefited its results yet. He even said that the quality of some electricity towers does not meet the required standard.

SE of Electricity responded that the government has been quite rigidly monitoring the quality of project materials. To this end, his part has established a technical team comprising of Timorese and international experts who have been doing monitoring visits to Indonesia to see in loco the materials fabrication. Therefore he dismissed the allegation of low quality of towers, and assured that the materials for the towers really meet the internationally recognized standards. Regarding the generator that fell down in Metinaro is now being evacuated by the company, and it is the responsibility of the contractor to replace by a new one, without paying any additional money. Concerning the budget amount of 261 Million, he said it is completely disaggregated, not only the technical components but also other non technical components such as church building, football field, etc, all of them constitute an integrated package.

Proposal N. 84, by Antonino Bianco and colleagues proposed a reduction of $5.1 Million for Free-Balance justifying that in 2011 it was allocated $7.7 Million for the same item, so that with this budget the total money allocated for FB will be $13.8 Million. Moreover, they said according to the budget book n. 6, a total budget of 21.5 Million will be allocated for this item, but there is lack of information on the utilization of this money. They also said that there is not much has been achieved with FB system, because connectivity is still problematic.

Minister Pires said that with the establishment of FB, it will facilitate the public to have easy access to the financial management through e-procurement and transparency portal. Minister emphasized that opting FreeBalance, a Canadian Accounting system is a smart decision as it is the most viable system that is also applied in many other countries. The FB also helps the ministry to set up contract management and able to detect in case of a “kongkalikong” between ministry’s staff and contractors. The FB is also expected to be harmonizing with other systems including the future CFP systems particularly in relation with the payroll so that “ghost staff” can be avoided. Minister informed that CFP will get a maximum $3.8 to have the complete system in place.

Proposal N. 102, by Antonino Bianco and colleagues proposed to reduce $25 Million from $75 Million for MDGs housing, justifying that the government has signed a contract with the company the amount of $99,944,060 and that at the end of 2011 the government will only need $54 Million for this project. This proposal was widely and intensively debated by the MPs across the benches.

The pros (of proposal) said that the prefabricated model as presented by the government is similar to a kobe house which is far from the desire of the Timorese people, in the villages, who have different housing typology.
Other comments who disagreed with the model reminded that modernization of housing in villages must be exercised with high caution, otherwise it will collide with the local cultural values and habits and may cause unnecessary social, political and economic costs.

The cons of the proposal (pros of MDGs housing) said that people deserve to undergo a transformative process of modernization regardless of its model. They emphasized that, despite some resistance from elements of society, the majority of people have welcomed this innovative housing and some of them have even voluntarily provided their lands for construction of houses.

Minister of Solidarity ascertained that the government is now approaching the local communities and will adopt the eligibility criteria, similar to what has been applied to other programs.

Minister of Finance reiterated again the clarification by Prime Minister earlier that the project is highly beneficial for the population. ADN has visited and discussed with the local population who accepted the project. Thousands of jobs will be created. The project uses fabricated materials aiming to avoid population cutting trees that will consequently cause environment degradation, and that we are not ready yet to supply raw and processed materials for the project in terms of quantity and quality.

Proposal N. 117, by Arao Noe and Riak Leman proposed to add $2.5 Million to $133.861 Million in the category of Transports, for rehabilitation of Aiasa Bridge that was broken down in 2010. The bridge is important to connect to important parts of the region.

Proposal N. 140, by Joaquim Amaral and colleagues , proposed to reduce $45.220 Million from $162.8 Million for the TASI MANE Project, bearing in mind that despite this reduction, there will be enough budget necessary to start up the project of “high way” connecting Suai-Betano-Beaco in south coast, which they claim as another “mega project”. Proponents were skeptic on effectiveness of the project taking into consideration the reality in the field where the majority of people are still poor and live in a very modest situation. Therefore, having such a mega project with modernized infrastructure in the project sites, is an irony. Then they suggested to first rehabilitating the existing roads that are in bad conditions and later we can move to modernize the south coast gradually. They also questioned about the beneficiaries and the socio –economic return of the mega project. Other MPs doubted the results of surveys and feasibility studies.

Minister of Infrastructure Pedro Lay responded that the volume of the high way project is 160 KM long with 4 lanes. In the first phase, the government will probably construct 2 lanes and the remaining 2 lanes will follow soon when it is needed. Besides roads, the network will also include 30 bridges to be constructed. Designs are ready to begin with the first phase for only 45 km long.

In addition, the SERN Alfredo Pires acknowledged that it is really a mega project but it is the best time for us to grasp the “mega opportunities “ in front of us, otherwise we lose them. The economic return includes the absorption of thousands of jobs, and other multiplier effects that will contribute for the economic growth. The high way will drastically reduce the trip hours from 10 hours from Suai to Beaco to only 1.5 hours, once the project is finished. The SERN also said that the results of the studies are in 65 containers and made by more than 80 scientists who have high expertise and internationally recognized reputation, so that if the MPs want to see, he can arrange time to visit it. The designs are available in the FreeBalance. He added that based on the data, Timor Leste now has more than 50,000 cars, and expected that in two years this number will be increased to 70,000 cars . From this number, he believes that minimum 10,000 to 20,000 will be circulating in the south coast,.

After intensive discussions two proposals were cancelled by the proponents, such as N. 84 (Freebalance) and N. 103 (Central Eletrica. Proponents said that despite cancelling the proposals, they reminded the government to take into consideration the real cost of the project so as to avoid waste of money, leaving only three proposals for voting, n.102, n.117 and n.140.

Proposal N. 102, in favor 21, against 38 and abstain 3, not approved, which means that the government ‘s proposal on MDGs housing remains;
Proposal n. 117 (Aiasa Bridge) , in favor 53, against 0 and abstain 9, approved;
Proposal N. 140 (TASI MANE), in favor 21, against 36, and abstain 6, not approved, which means the TM project goes on according to the government ‘s plan.

Then the Annex IV, for the Infrastructure Funds (IF) was voted and approved , in favor 45, against 9 and abstain 8;

One proposal by Arao Noe proposed additional budget of $10 M for the road network from Maubise-Ainaro-Same. The proposal was voted and approved, in favor 37, against 7 and abstain 10.

For the annex V, there was no proposal and then the annex V was voted and approved, in favor 38, against 7, and abstain 13.

Then the article 2 as a whole (including the additional budgets as per the proposals) was voted and approved, in favor 38, against 20 and abstain 0.

There was no proposal in relation with the article 3 and 4. The chair announced the preliminary number as a clue for the voting, but MP Joaquim Santos suggested to have an exact figure before voting, because, before the budget law is approved it requires a precise figure to avoid problems in the future.

The Chair announced another break for the technical staff coming with the right calculation.
The final exact number was $1,494,900,000 ($1.494 Billion), to be withdrawn from Petroleum Funds.
The plenary voted and approved the articles 3 and 4 of the bill, in favor 40, against 10, abstain 8.

For article 5, there was one proposal by Manuel Tilman and Arao Noe, who proposed to change the text of the article 5 relating to the borrowing number from “33.1 M” to $160 M. This is in line with the projections in the budget book n. 6, which says until 2016 the government is allowed to get loans up to 180 M and will be paid back in 40 years. Fretilin strongly reacted and criticized the inconsistency of numbers, that in one side says 33.1 M, on the other side says 160 M, and in the budget book n. 6 it says $180 M. Fretilin criticized this attitude which deliberately ignores consensus with the political parties, in particular Fretilin.
After intensive and heat debate, the plenary had to break again to negotiate between the two blocks AMP and Fretilin).

Minister of Finance tried to clarify the amount of loans. Minister stressed that no agreement can be made between the government and the agency (World Bank, ADB, etc). if the amount is only 43.1 over the long period of 4 years, and if so the agencies will cancel their loans. If this happens, it will cause serious consequences, including people’s disappointment, and so forth.

Because the plenary did not seem to reach consensus, Fretilin walked out at 8.40

The chair regretted the attitude of Fretilin bench abandoning the plenary. He said that this demonstrates undemocratic behavior, and disrespect for the majority’s decision, which is one of the principles of democracy. He also said that the plenary has agreed the amount of $43.1 for loans, and this number of $160 M appears because it is a requirement of the loans agencies as happening in everywhere across the world to set up the loan in a longer period, and not in annual basis.

In the absence of Fretilin, the plenary continued its debate and proceeded for voting of the proposal by Manuel Tilman and Arao. The plenary approved the proposal, in favor 40, against 0 and abstain 0. Automatically the text of this proposal will replace the text of the article 5 from the government’s bill.

Unexpectedly, right after the voting for article 5, as above, Fretilin walked in again to participate in the debate and voting of the following articles. Then the articles 6, 7, 8, and 10 were voted and approved globally, in favor 39, against 20 and abstain 1.

Finally, the parliament approved the OGE 2012 in “FINAL GLOBAL” with: in favor 39, against 20 and abstain 1.