Head of the Presidential Secretariat, Dr. Roger Luncheon said negotiations were continuing in Washington with American and Caribbean Power (AC Power), a main shareholder in the troubled power company.

At his weekly post-Cabinet press briefing, he said the Government and AC Power are involved in the panel process which is focusing on the accessing of the final tranche of US$3.5M of the investment sum by GPL.

"Cabinet was advised that the company's delivery of electricity to consumers continues to be affected by the cash flow problem being experienced. Cabinet was also advised that payments to the tune of $100M had been made to the company to cover State and Government arrears payments for January and February of 2003," Luncheon reported.

He added: "Cabinet was further advised that the two shareholders, the Government of Guyana and AC Power, are involved in the ongoing panel process in Washington, deciding on the company's access to the last US$3.5M tranche - that is of the investment made by CDC (Commonwealth Development Corporation) - the 50% deal for the access of the then GEC (Guyana Electricity Corporation)."

He noted that Cabinet has recognised the imperative of increasing and securing financial inflows to the company and insisted that it would be the focus of the shareholders.

He added that the Government has reiterated its commitment to exercising all possible avenues to ensure that power outages are not continued.

As regards the report on the negotiations between AC Power and the Government by Minister of Housing and Water, Mr. Shaik Baksh, who is heading the Administration's team of negotiators, Luncheon said that has not been finalised and is in the process of being fine-tuned to highlight those areas where consensus has been reached by the two parties and those issues where a fairly wide gap still exists.

The Government and AC Power recently concluded discussions on the future of GPL and Baksh is in the process of compiling the report on the talks which is to be submitted to Prime Minister Sam Hinds for his study in the shortest possible time.

One of the more contentious issues during the discussions was the decision on whether GPL would be accessing the final tranche of US$3.5M under the investment agreement.

While the talks have not led to conclusive agreements, it facilitated the narrowing of the gap between the two parties on the options identified to move the process forward, the spokesman said.

The options identified include the withdrawal of AC Power from GPL, the collaboration of the two parties towards a secure financial environment of GPL and the way in which targets and standards would be addressed by both sides.

A team from AC Power which represents the CDC, has been holding discussions 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.

Luncheon said Cabinet took the position that an extremely comprehensive approach is needed 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 currently under discussion.

Electricity bills were set to be higher from February 1, but the move by the power company came under heavy fire from businessmen and other sections of society and the matter eventually ended up in court which has put the proposed increases on hold.