MEDIA RELEASE

Dili, October 20 2006

Timor-Leste critical of delays to delivery of passenger ferry

Timor-Leste has strongly criticised an Indonesian boat building company after it failed to deliver on time a new 50-metre passenger and cargo ferry.

The 300-passenger Nacroma was funded by a grant from Germany and was scheduled to be in service next month (November). But delays at the PT PAL Indonesia boat building company in Surabaya mean she will not be delivered to Timor-Leste until at least the end of the year.

"Contrary to the contract and the pledges made by PT PAL in Surabaya that the Nakroma would be in service in November, we are now told the boat will not finish its trials until December," the Prime Minister's Chief of Staff Mr Marcos dos Reis da Costa said.

"Today, following a meeting between the Minister of Transportation and Communication Excellency Inácio Moreira, and officials of the company, the Prime Minister of Timor-Leste was informed that there would be even more delays.

"The company has not lived up to its commitments and this is now an issue of trust between PT PAL Indonesia and Timor-Leste."

Mr da Costa said he was concerned about the delays and he was determined that the Nakroma would be finished to the high standards specified in the contract.

"We are so concerned about these matters that we will be ensuring that a company from a third country ­ perhaps Singapore, South Korea, Australia or Germany ­ signs off on the necessary pre-delivery inspections and sea trials before the vessel is accepted," Mr da Costa said.

"The generosity and kindness of Germany has made this vessel possible and it will open up much of our coastal and remote areas to improved services.

"We were assured that following the christening of the Nakroma on September 14 sea trials would begin immediately. A month later and these tests have not even started.

"This is particularly disappointing."

The Nacroma will carry 20 first class passengers and 280 economy passengers. Its twin 225 kW Volvo Penta diesel engines will allow it to cruise at between 10 and 12 knots. It will have a crew of 15 and be capable of carrying 170 tonnes of cargo.

The contracts were signed in September 2004.

For further information please contact::

Joel Maria Pereira Information Officer Gabinete Primeiru Ministru Email: riko_joel@yahoo.com Telephone: +670 7254740

Ivana Belo Information Officer Gabinete Primeiru Ministru Email: unugina2004@yahoo.com Telephone: +670 724 3559.

Julian Swinstead Communications/Media Advisor Office of the Prime Minister Email: jswinstead@hotmail.com Telephone: +670 732 7776.