23 February 2011

East Timor navy base dispute snares Australian engineering company

Mark Dodd  The Australian February 21, 2011 12:33PM - PLANS to build a new patrol boat base for East Timor have stalled over a stand-off between the Gusmao government, its defence force and an Australian engineering firm now suing for damages.

Sydney-based Lifese Engineering whose chairman is former NSW Liberal MP and international jurist John Dowd, is claiming more than $695,000 for damages, saying it has been unable to finish contracted work at the Port Hera naval base, east of Dili.

Political observers in Dili say the dispute is a turf war between civilian bureaucrats and the East Timor Defence Force over control of $7.7 million in funds to build the base, with Lifese caught in the middle.

But the debacle serves as a reminder of the risks for foreign companies wanting to do business in East Timor.

In its demand for damages, contained in a letter dated October 20 last year, Lifese alleges the East Timor Defence Force prevented the company's workers from entering the port.


After spending $3.8 million to get the project finished Lifese said its coffers are now empty and accused the Gusmao government of failing to honour the contract and release further funds for building works to continue.

"Lifese has been confronted by a series of ongoing delays and disruptions, all of which have been beyond our control," the company said.

"Such causes of delay include but are certainly not limited to the delays encountered with the contract being negotiated and signed, delay of funds being released - and the lack of restricted access to the site."

Meanwhile problems have continued to pile up - literally.

Steel piling bought in Australia and shipped to Dili to complete the base construction has been stuck at Dili port, accumulating storage charges of $US7000 per day.

Lifese's commercial manager and legal counsel, Zena Dabboussy-Bardouh, declined to comment when approached by The Australian Online.

But nobody is disputing the urgency of the project given the arrival within months of two new, donated South Korean patrol boats to tackle illegal fishing and people-smuggling.

They will join the Timorese flotilla's two new Chinese patrol boats and two appropriately named Albatross class patrol boats, donated years earlier by Portugal but hardly ever used.
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