At a news conference yesterday at the Office of the President, he said a letter has been sent to the Commonwealth Development Corporation (CDC), the other major shareholder in the power company, stating the Government's dissatisfaction with the performance of GPL's management team.

Prime Minister Sam Hinds wrote the CDC last week, recommending a delay of three months in any implementation of the 2002 rate exchange.

He said this delay would allow for the completion of the audited accounts and confirmation of the rate revision calculation of GPL.

He noted that the two Government Directors on the GPL Board have enquired into some of the numbers and have not been able to satisfy themselves on the accuracy of some of them, such as construction in progress.

It would also allow for an inquiry by the watchdog Public Utilities Commission (PUC) into the issue of performance targets.

According to the Prime Minister, it is being argued in the public that if the licence requirement of 29 per cent for technical and commercial losses had been achieved instead of the 40 per cent level recorded by the company, no tariff increases may have been required.

Mr. Hinds also stated that some have estimated that GPL's expenses may have been reduced by as much as $1.9B if the targets were achieved.

"When compared to the deficiency of $1.6B, the argument is made that there should be no increases," he pointed out. He, however, noted that this is a complicated issue.

The Prime Minister also noted that some have argued that if losses were reduced there would be more power available to meet demands. GPL's investment in emergency generation additions may have not been required, he said.

While the sets have improved service, they add to the rate base, he explained. GPL was scheduled to have 10 MV of base load capacity installed in 2001 but this was installed instead as a medium speed set.

"As shareholders, we do have an obligation to ensure that consumers do not pay for inefficiencies. As shareholders, we chose the Manager and we have the responsibility to ensure that the Manager delivers," Mr. Hinds said.

One of the obligations of the management team was to effect a more efficient distribution system for the power company.

The Government and CDC are the two main shareholders in GPL.

GPL wants to impose a 15.8 per cent increase on light bills for this year, but there have been strident objections to the proposal.

Meanwhile, the President is of the view that as shareholders, it is their responsibility to ensure that the management team performs. "In this case, they have not performed as they should have," he told the news conference.

He added that as shareholders the Government and CDC should get together to review the situation. According to him, it was suggested to the CDC that the shareholders forego their rate of return on capital so there would be no basis for the increase.

He said too that the PUC still has the jurisdiction to penalise the company for failing to live up to contractual arrangements.

This would include reducing the line loss in the distribution system and increasing the generation that customers are paying for.

Such penalties could be monetary which would be returned to consumers.

Restricting rates increases is beyond the jurisdiction of the PUC, the President noted.