The Private Sector Commission has been advised by a special committee it appointed to study the phone company's application for domestic rate increases, that it had to adopt a position which supported the company on one hand and protected the consuming public and business community on the other.

The committee said that the 15 per cent internal rate of return being sought by the Guyana Telephone and Telegraph Company Ltd (GT&T) was "unrealistic" at this time.

"We have to balance the needs of the public for an affordable service against the needs of the company for a viable operation, which affords them an acceptable margin of profit. Under the terms of their agreement, it should have been an IRR (internal rate of return) of 15%. This figure seems unrealistic at this time. In any event, according to the Chief Executive Officer [Sonita Jagan] in her presentation, they are only earning around eight per cent. It seems they would be willing to accept a figure around this rate and they are seeking our moral support," the special committee reported. The committee comprises President of the GMA, Norman McLean, President of the Georgetown Chamber of Commerce and Industry, Eddie Boyer, Head of Guyana Stockfeeds Ltd, Robert Badal, and Finance Comptroller with the Edward Beharry Group, Paul Cheong.

Jagan met the PSC shortly after her company's application to the PUC for rate increases as high as 1,900% to solicit its support. GT&T is a member of the PSC. The PSC in turn appointed a special committee to look at the issue.

However, after one meeting, the committee said it was not in a position to make a presentation to the PSC as it did not have all the facts at its disposal. Nevertheless, the committee advised that the PSC's position should be one of general support of its member company whilst at the same time protecting the general interests of the public and the business community as a whole.

"This may be seen as a delicate balancing act, but there may be no other course open to resolving this issue amicably," the committee said, anticipating that the PUC would have ruled on the matter since January 16.

The committee said that whatever increase was granted by the PUC, the PSC should evaluate the impact of it over the following five months to establish either its adequacy or otherwise in real terms. It noted that the population could not live with increases close to 2000% and on the other hand the company needed to survive and grow.

In looking at the impact of the proposed increases on consumers, the committee noted the potential for consumers to employ cost-cutting measures causing GT&T to lose more in the long run.

On the impact on the company, the committee whilst noting the criticisms that the firm had made a killing in the past and should be made to bite the bullet, accepted that the reduction in the international settlement rates would impact negatively on the company's revenue stream.

Hence, the committee saw the need for an acceptable balance to be struck and hoped that the PUC would find instructive what prevailed in the rest of the Caribbean states in making a ruling on GT&T's case for increases in domestic rates.