PRIME Minister Sam Hinds has vigorously refuted recent allegations by the main Opposition People's National Congress Reform (PNC/R) on the electricity situation in the country.

He also accused the PNC/R of trying to jeopardise the ongoing negotiations between the Government and AC Power - the major shareholders in the crisis-plagued Guyana Power and Light Inc. (GPL).

"It is the Government's determination to continue negotiations with AC Power until an agreement has been reached which satisfactorily addresses the issues on the table and it would be much more in the public interests if the PNC adopted a constructive rather than destructive position", the Prime Minister said a statement yesterday.

The following is the text of the statement issued by the Office of the Prime Minister:

"It is regrettable that the statement made by Mr. Lance Carberry at a press congress held by the PNC/R on Thursday (February 27, 2003), offers nothing constructive with regard to the electricity situation and, could easily place in jeopardy, the negotiations currently going forward between the Government and AC Power.

It continues to be the habit and practice of the PNC to protest and make wholly irrational and unreasonable demands, whenever the Government enters into negotiations with a major potential investor on behalf of the country, with the obvious and irresponsible intention of discouraging the investor and undermining the negotiations, and the PNC is at it again.

The Prime Minister, at his press conference on 14 February, made the Government's position very clear.

It is the Government's considered position that AC Power has failed to meet its obligations under the Operating Standards and Performance Targets in its Management Agreement.

It is the Government's position that the present management be replaced and that the investor meet its obligation to find financing sufficient to implement the Development and Expansion Programme and reduce the Technical and Commercial losses.

It is, therefore, nonsense for the PNC to claim that it is the Government's position `that the Guyanese people should be asked to continue to bear the cost of GPL's inefficiency and incompetence'.

It is precisely because of an almost totally collapsed electricity system handed over to the country by the PNC in 1992, that millions have had to be invested in restoring a reliable generation of electricity and that the inefficiencies in the distribution system remain yet to be addressed.

The PNC cries crocodile tears on behalf of the consumers and takes cheap political potshots at the Government, when, in fact, it is the cost of recovery of a ruined electricity system that, up to today, remains a burden on the consumer.

It is entirely false for the PNC to claim that `the Government refused to share the contents of the Agreement with AC Power with the Parliamentary Opposition'.

Months prior to the GPL Contract being entered into, on March 22, 1999, the Office of the Prime Minister circulated to every Opposition Party and Social Partners, a summary of the proposed transaction covering each aspect of the Agreement to establish GPL, including the Ownership Structure, the Company's Organisation, the Investment Arrangement, the Rate of Return proposed, the Tariff Rates and Rate Making Mechanism, the Management Contract and the fees to be paid, the Capital Structure and the Commercial and Technical inefficiencies to be addressed.

Prior to the Agreement being signed, the Government entered into the Quadripartite process with respect to the application of tariff rates and these agreements have been honoured.

The Government held numerous Press Conferences and Briefings with all of the major stakeholders and conducted a public workshop at the Ocean View Hotel in September 1999, detailing the proposed agreement, one month before its signing in October.

The GPL Agreement with all of its various documentation was laid before Parliament on 11 November, 1999.

So what is the PNC talking about when Mr. Carberry claims that `the Government hid their deeds from public view'?

What more does the PNC want to see that they do not already have in their possession?

Contrary to the PNC's claim, there was never the case that AC Power was allowed to defer payment of the US$23.45M purchase price.

The purpose of the phased payments directly to the Company was deliberate in order to avoid the severe impact which payment of the full investment would have had on the tariff rates. It was done, therefore, to protect the consumer.

If the Government, as the PNC claims, sought to renegotiate the Agreement with AC Power secretly, the Prime Minister would not have entered into consultations with all of the Social Partners on its intention to review the GPL Agreement and would not have specifically identified the issues which are on the table for negotiations.

In fact, the PNC declined an invitation from the Prime Minister to be briefed and consulted on the current situation.

At his Press Conference, the Prime Minister clearly identified the issues under discussion:

** The restructuring of the Agreement with AC Power

** The appointment of a new management under entirely different conditions

** A revision and reduction of the Management Fees

** A review of the role of the Board with regard to its authority over management supervision

** The performance obligations of GPL with regard to delivery of services and the financial viability of the company

** A review of the regulatory licence issues which govern the operations of the company

** The question of additional investment by AC Power.

It ought to be clear to even the smallest child, that no company, whether foreign or local, would be willing to invest substantial sums in the recovery and development of the electricity sector, if faced with a parliamentary imposed freeze on tariff rates.

It is an utterly senseless proposal intended only to play to the gallery.

As the Prime Minister pointed out at his Press Conference, the Government Directors on the Board of GPL and the Government as a 50% shareholder, at consecutive meetings since November 2001, has registered its concern over the cost of continuing Technical and Commercial losses being passed on to consumers.