THE watchdog Public Utilities Commission (PUC) is to rule shortly on whether it will grant the Guyana Telephone and Telegraph Company (GT&T) temporary increases on its current rate tariff, pending a final determination on proposed steep hikes for this year.

PUC Chairman, Justice Prem Persaud, made the announcement prior to adjourning yesterday's hearing at about 17:20 hrs to allow the commission to consider submissions put forward by the GT&T to substantiate its claim for increase on its tariff; those by the Guyana Consumers Association (GCA), the Consumers Advisory Bureau and concerned customers.

Persaud had on Tuesday said he wanted the latter category to also be involved.

The hearing at the Hotel Tower in Georgetown which concluded yesterday, has its genesis in an application by GT&T for the tariff establishing new rates to prevent substantial revenue shortfalls, which the company says it expects through the reduction of international settlement rates.

The new rates of US23 cent instead of US85 cents to be paid by U.S. carriers to Guyana came into effect on January 1 last, and by way of a United States Federal Communications Commission (FCC) order.

The company had projected earning a 1.05 per cent rate of return on its invested capital for wire-line services, but says that to achieve the minimum 15 per cent rate of return, it will require additional revenues of $5,556M by way of increased rates and charges.

Sources, however, noted that for last year, GT&T realised a 26.19 per cent profit on cell phone operations from the introduction in May to December and 13.54 per cent for land lines, thereby realising a 14.71 per cent rate of return in overall operation, as against the 15 per cent benchmark stipulated in the purchase agreement.

This includes a six per cent advisory fee which GT&T pays its parent company ATN and other depreciation which the PUC had rejected.

Sources pointed out that had the six per cent been taken out, the rate of return would have exceeded the 15 per cent benchmark.

GT&T employees have been flocking the hearing in numbers, claiming they may lose their jobs if the company does not receive the increase which according to the proposal, will see, among other steep increases, domestic telephone rental up from $250 to $1,500 and business/commercial rentals from $1,000 to $3,000 per month.

The company also wants to increase the charge for calls within the exchanges from 20 cents to an astronomical $4 per minute during the day, and from 10 cents per minute to $2 per minute at nights, representing an approximate 75 per cent increase for out-of-exchange calls.

The PUC, however, at an initial hearing on January 9 convened at the Supreme Court Library in Georgetown, suspended the application for six months and fixed the sessions this week to address the fixing of temporary rates.

At the first session Tuesday, Counsel for the CAB and GCA, Mr. Stephen Fraser emphasised that GT&T has to establish a basis for being entitled to higher tariffs, while the commission's Legal Counsel, Mr. Allan Lewis requested that the telephone company identify and submit to the PUC, a list of areas it feels there are no disagreements on and others where agreement is likely.

Former GT&T employee at the administrative level and now the company's consultant "on matters of these nature", Mr. Godfrey Statia who was being cross-examined, undertook to have the documentation submitted.

At the resumption yesterday, Chairman Persaud reported that the documents were submitted at noon.

Statia reiterated to the commission that "he stands by the application", copies of which were also given to Fraser on behalf of the GCA and CAB, and subsequently admitted as Exhibits `A'; `B` and `C'.

Following the admission of the exhibits, Mr. John Willems, PUC member and Fraser sought clarifications on some minor issues.

Willems then asked Fraser to take the commission through a document prepared by consultant Mr. Joseph Tyndall on behalf of the CAB and signed by Ms. Eileen Cox, to which he immediately replied that he had just minutes earlier received the document.

The paper addresses a number of issues relating to the awarding of temporary rates to GT&T, among them non-compliance, separation of accounts; the inclusion of certain services such as Internet which should not be and are included in the application; methodology in the calculation of the rate base.

A principal point highlighted in Tyndall's document is the valuation of the property of GT&T in the United States, along with reference to authorities which specify in some cases the methodology which should be adopted in determining rates by the public or the Utilities Commission.

Asked by the Chairman if the document refers specifically to the determination of temporary or permanent rates, Fraser replied temporary.

He also pointed out that an opening submission of the document states that the commission "is not obliged to consider at this stage the issue of temporary rates and can embark upon the hearing of permanent rates."

Senior Counsel, Mr. Rex McKay of the GT&T legal team, had raised objection to the document being considered, but it was admitted as an exhibit after Fraser gave a brief outline into it.

Unlike Tuesday when several persons posed questions from the floor when the opportunity was given, there were only two persons yesterday, Mr. Loris Richards and Dr. Sobryan, both consumers.

Richards first took the opportunity and immediately caused some furore among the GT&T ranks when he requested of the PUC that the rules of cross-examination be suspended.

He also pointed out that Statia was facing the firing line while the three GT&T top administrators, including Chief Executive Officer, Ms. Sonita Jagan, like "generals" sat in the front row and are not being cross-examined.

Richards further contended that Statia, who is no longer a senior employee of the telephone company and functions only as a consultant, will not be privy to "certain" information, and as such can only answer queries to "the best of his knowledge".

He then sought to find out from Statia if when the 15 per cent rate of return was prepared this was done "on the basis of investment or total of assets as acquired...and is the focus on an internal rate of return or not."

But McKay took issue, asking the Chairman whether it is the regular procedure for members of the public to be allowed to cross-examine witnesses.

Persaud reminded that he had said on the first day of the hearing that he would allow members of the public to be involved.

After some amount of back and forth talking, Richards asked whether GT&T will "remain viable for our children and grandchildren", noting that there is no benchmark by which to judge the company.

Sobryan suggested that the PUC, before considering a rate increase, should ensure that there is a physical audit of the company.

And, after some brief deliberations among the PUC membership, Chairman Persaud announced the adjournment.