He said the discussions are on the current agreement in the electricity sector with the intention of resolving the issues affecting the provision of a reliable supply of electricity at a reasonable cost.

The other shareholder in Guyana Power and Light Company (GPL) is the Government of Guyana.

Luncheon told his regular post-Cabinet news conference that Cabinet was updated and examined the options aimed at resolving issues confronting GPL at its meeting Tuesday.

He said the Government and CDC through AC are holding discussions on the way forward for the troubled power company.

"The two shareholders, the Government and the CDC through AC Power...are currently involved in discussions on the way forward.

"Among the issues that Cabinet was presented with was the issue surrounding the release of the last tranche of the original investment", he said.

Luncheon said the tranche of US$3.5M is being held in escrow, pending the resolution of a claim by AC Power.

The shareholders agreed that meetings between the Government of Guyana and AC Power would continue with Water and Housing Minister Shaik Baksh, the head of the Government's team of negotiators, he told reporters.

Cabinet also agreed on the mechanism for the appointment of its nominees to the panel that would be considering the move by AC Power to withhold that last tranche of US$3.5M, he said.

He added that on the whole, Cabinet noted that the situation needed an extremely comprehensive approach to resolve the multitude of problems confronting the company and to provide a solution that would see it return to provision of power to consumers and adherence to the agreements that were concluded and are under discussion.

GPL had proposed sharp hikes in electricity bills from February 1, last, but the move by the power company came under heavy fire from the Government, the business sector and others.

A consumer last week got a High Court order blocking the proposed increases until the determination of the issue in court.

GPL had submitted to the watchdog Public Utilities Commission (PUC) prescribed information showing that energy (kwh) rates will be increased by between 13.9% for residential consumers and 16.6%, compared to rates billed in December last year.

According to GPL Chief Executive Officer, Mr. John Lynn: "While no one likes to see a tariff increase, we wish to note that the increases are needed to permit GPL to meet expenditures essential to the maintenance and improvement of electricity supply to our customers."

The Government, however, categorically rejected the decision by GPL to implement the hikes.

The Office of the President stated that the GPL management has failed and should be removed and that the tariff increases are not justified as consumers are being punished for management's incompetence.

It said the consequence of management's failure has led to increased tariffs, which is a source of much concern and frustration to consumers, and observed that the Government among others have repeatedly pointed out the weaknesses of management.

Clarifying the position of the Government in relation to its call for the removal of the management, Luncheon yesterday said the focus of attention of the statement was in relation to the management firm ESBI.

"Representing the shareholder CDC, AC Power has an arrangement with the Irish Electricity Board which created the management company ESBI.

"It is that management company that Cabinet has identified, perhaps the entire Guyana has identified, as failing to deliver on its obligations and meeting their agreements (and) the call was made for their removal", Luncheon explained.

"The reality is that the matters confronting the company are more profound than just the removal of the managers and although that is an important aspect, Cabinet's case was that there were other considerations that need to be addressed", he said.