Subject: Australian: Horta to Drive Gas Deal

The Australian

Tuesday, July 11, 2006

Horta to Drive Gas Deal

by Stephen Fitzpatrick in Dili, East Timor

JOSE Ramos Horta has been sworn in as East Timor's Prime Minister and immediately vowed to pass legislation ratifying a deal with Australia on the exploitation of natural gas in the Timor Sea.

Foreign Minister Alexander Downer said last night the renewed stability could see Australian troops withdrawing from Dili within weeks.

The Greater Sunrise agreement, signed by Mr Ramos Horta and Mr Downer in Sydney in January in a ceremony witnessed by John Howard and Mr Ramos Horta's predecessor, Mari Alkatiri, could see East Timor pocketing up to $13billion from Australia over the project's lifetime.

However, it has yet to be ratified in the Dili parliament, due to opposition from the ruling Fretilin party and other groups who feel it concedes too much to Canberra.

Mr Ramos Horta admitted yesterday the delay had damaged East Timor's credibility.

"We cannot be known as a country that signs agreements and then doesn't ratify them. Our credibility as a state and as a government is at stake," he said after being inaugurated by President Xanana Gusmao in a ceremony attended by foreign dignitaries including Australian ambassador Margaret Toomey and the Australian head of the multinational peacekeeping force, Brigadier Mick Slater.

"It sends a very bad signal to other governments, so this Government will look at the ratification as one of the priority issues."

Woodside said yesterday that while Mr Ramos Horta's reported remarks represented a change in attitude in Dili it would wait until the agreement was ratified both in Dili and Canberra before resuming work on Greater Sunrise.

Mr Horta said his cabinet, to be sworn in tomorrow would immediately meet to consider a proposed $US315 million ($420 million) budget "which we might review" and that he would then address the troubled tender process for national reconstruction and infrastructure projects.

He said he would "seek expert advice from those who know, like the World Bank, the IMF and other advisers" on how to fast-track this process.

Speaking in both of East Timor's national languages, Portuguese and Tetum, Mr Ramos Horta promised to provide an economic kickstart in the cash-starved regions outside Dili.

"We are going to mobilise all our financial and human resources to rapidly revitalise economic activity in those regions, through small projects that will have a rapid impact," he said.

Mr Ramos Horta argued that the collapsed government of Dr Alkatiri had "registered notable progress in many areas" including establishing a new legal framework and the reaching of "important agreements with our neighbours".

However, he admitted there had been significant failings.

"In a short time we managed to create by us and for us, a bureaucratic stranglehold that undermines our best intentions and political decisions and opens the door to corruption," he said.

Sworn in alongside Mr Ramos Horta were two deputy prime ministers, Estanislau da Silva and Rui Araujo, in a deal hammered out after two weeks of negotiations with Fretilin.

Mr Downer said he believed the situation would now stabilise substantially. "We'll be able to have another look in the next few weeks at the level of troops we have there and the kind of support we're providing," he said. "I don't want us to turn our backs on them but we can start thinking about those issues of downsizing our presence there." -- Additional reporting: Nigel Wilson

---------------------- Joyo Indonesia News Service

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