Subject: East Timor PM Under Fire For Rice Import Deal

ETimor PM under fire for rice import deal

DILI, East Timor, July 10 (AFP) -- East Timor's prime minister was under fire from the opposition Thursday over his decision to give a close associate a multi-million-dollar contract to import rice into the impoverished country.

Opposition leader Mari Alkatiri accused Prime Minister Xanana Gusmao of ignoring due process in awarding the 14.4-million-dollar contract to businessman and ruling CNRT party member Germano da Silva.

The May 7 contract, which gives da Silva's Tres Amigos company the sole right to import 16,000 tonnes of rice, was awarded without a proper tender process, Alkatiri told reporters.

"I say to my friend Xanana that he has given up 14 million dollars to one person, moreover a collaborator of his. This clearly points to wrongdoing. Why didn't he invite other people to participate?" Alkatiri said.

The contract has raised eyebrows in East Timor, where Gusmao's ruling CNRT-led government has been reluctant to spend a windfall from natural gas on large-scale programmes out of fear of creating a corrupt bureaucracy.

Gusmao has denied any wrongdoing, telling reporters on Wednesday the deal was signed after he told a meeting of 12 importers in February that rice stockpiles needed to be boosted to stabilise prices.

"At that time we asked who had the warehouses and was able to import rice, and everyone was quiet. (But) Germano raised his hand and said (Tres Amigos) was ready," Gusmao said.

"It wasn't just that I called Germano and gave him the contract but it was through open negotiations with importers and I didn't do it under the table and all (of the importers) agreed to it," he said.

East Timor, which gained independence in 2002 after 24 years of Indonesian occupation, is one of the world's poorest nations with an unemployment rate of around 50 percent.

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