FERRY SERVICE LINKS OECUSSI WITH DILI

The East Timor Transitional Cabinet today agreed to the operation of a passenger ferry service between Oecussi and Dili and to provide a subsidy to the service. Australian-based East Timor Shipping and Supply (ETSS) will operate the ferry service, which is expected to begin in early October.

The Cabinet approved a fuel subsidy of US$5,000 a month to enable ETSS to operate the ferry service, as well as a waiver to ETSS for passenger liability. Passengers will be informed about the absence of liability when purchasing tickets. The Cabinet also authorized ticket-issuing facilities in connection with the ferry.

The ETSS link is a temporary solution and it is expected that another company could take over the operation early next year.

Oecussi has been without transportation links with the rest of East Timor – except limited air service – for more than a year. The distance between the enclave and the East Timorese border is approximately 45 kilometers.

SRSG Sergio Vieira de Mello and Indonesian Foreign Minister Alwi Shihab signed a Joint Communiqué in February providing for unimpeded access for goods and people on a special transit corridor between the enclave and East Timor proper.

The takeover of parts of West Timor by militia groups makes it unlikely that a land corridor can be established anytime soon. Therefore, the only economic possibility for transport between Oecussi and East Timor proper is by sea.

CABINET APPROVES TAX INCREASES

The East Timor Transitional Cabinet today agreed on a proposal to increase the excise rates on certain imported goods such as wine and spirits. The proposal will be forwarded to the National Consultative Council as a draft amendment to existing regulations.

Additionally, the proposed excise rate on cars and passenger vehicles was increased to 30 per cent with a minimum value of US$ 400 per vehicle and a further 30 per cent on any part of the value over US$ 20,000 for expensive cars. Private airplanes and recreational yachts would be subject to the same excise as expensive vehicles. Guns, ammunition and fireworks would be subject to a 100 per cent excise tax. A 10 per cent excise tax was also proposed on a further list of other goods.

The Cabinet was also briefed by Sarah Cliffe, the Director of the World Bank in East Timor. The purpose of the briefing was to report for the month of August on the activities of the programs funded under the Trust Fund for East Timor (TFET) and implemented by the East Timor Transitional Administration.

Overall, a total of US$7.4 million has been disbursed from the Trust Fund for East Timor. Cliffe noted that the disbursement for the months of September and October was expected to increase considerably as numerous projects complete their initial procurement phase.