In October 2008, the Chinese Nuclear Industry 22nd Construction Company had been awarded a US$390 million power project to build two power generating stations in Manatuto central Timor and in the south coast, along with an electricity grid.
But, the project has been stalled by the Court of Appeal on 27 October 2008 based on a petition submitted by 16 members of parliament from the opposition Revolutionary Front for an Independent East Timor (FRETILIN) party.
The court ruled that the project budget was unconstitutional and illegal because those funds would require an amount beyond what is allowed under existing laws regulating East Timor's sovereign wealth fund the Petroleum Fund which draws its revenue from East Timorese energy resources.
Observers have noted that China did not enjoy any political mileage in this sense from being the first country to acknowledge East Timor's independence in 2002 and a major donor of food to military equipment to East Timor in addition to constructing the country's new Ministry of Foreign Affairs building and a new presidential palace.
These two new buildings together with a large Chinese embassy were the largest construction projects in the capital city Dili.
China had also been a strategic balancer to Australia's influence over East Timor, especially with disputes between Australian companies like Woodside and the East Timorese government over the destination of piped gas.
Crook, Matt, "East Timor kills Chinese power deal" dated 3 December 2008 in the Asia TImes website [downloaded on 25 December 2008], available athttp://www.atimes.com/atimes/Southeast_Asia/JL03Ae02.html.