TCRLA_Public/050119.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                    L A T I N   A M E R I C A

            Wednesday, January 19, 2005, Vol. 6, Issue 13

                            Headlines


A R G E N T I N A

APSA: Local S&P Retains `raBBB-` Rating
CABLEVISION: S&P Leaves Junk Ratings Unchanged
HIDROELECTRICA PIEDRA: Summons Class A Shareholders
MULTICANAL: $719M in Bonds Remain in Default  
PETROBRAS ENERGIA: Issues December Oil, Gas Production Averages

* ARGENTINA: Gramercy Advisors LLC Rejects Exchange Offer
* ARGENTINA: Italian Creditors Turn Down Debt Swap Offer


B A R B A D O S

C&W BARBADOS: FTC Denies Motion for Review


B O L I V I A

AGUAS DEL ILLIMANI: Bond Rating Trend Falls


D O M I N I C A N   R E P U B L I C

AES DOMINICANA/CDEEE: Arbitration Commission Impedes Debt Talks
* DOMINICAN REPUBLIC: Reschedules Debt With Paris Club


M E X I C O

EUZKADI: Reopens After Three-Year Closure
GRUPO ELEKTRA: To Pay Less than MXP500th for MNB Detroit Note


T R I N I D A D   &   T O B A G O

NWRHA: Minister Denies Having Contract With Eastman


V E N E Z U E L A

PDVSA: Plan to Develop Corocoro Oil Field Suffers Setback
PDVSA: Inks Cooperation Deal With Gazprom

     -  -  -  -  -  -  -  -                             

=================
A R G E N T I N A
=================

APSA: Local S&P Retains `raBBB-` Rating
---------------------------------------
The Argentine branch of Standard & Poor's International Ratings
assigned an `raBBB-' rating to ARS85 million worth of corporate
bonds issued by Alto Palermo S.A., according to the Comision
Nacional de Valores (CNV), the country's securities regulator.
The bonds, which will mature on April 7, 2005, were described as
"Obligaciones Negociables Simples no Convertibles en acciones"
and classified under `Simple Issue.'

The rating action was taken based on the Company's financial
status at the end of September 2004. Alto Palermo is the largest
shopping mall operator in Argentina.

CONTACT:  Alto Palermo S.A. (APSA)
          2/F
          476 Hipolito Yrigoyen
          Buenos Aires
          Argentina
          Phone: +54 11 4344 4600
          Home Page: http://www.altopalermo.com.ar

          Contacts:
          Eduardo Sergio Elsztain, Chairman
          Marcos Marcelo Mindlin , Vice Chairman
          Aaron Gabriel Juejati, Vice Chairman


CABLEVISION: S&P Leaves Junk Ratings Unchanged
----------------------------------------------
Standard & Poor's International Ratings, Ltd. Sucursal Argentina
maintains an 'raD' rating on the following corporate bonds
issued by Cablevision S.A.:

- US$100 million worth of "Series and/or Class" bonds described
as "Serie XI por un monto de USD 100 millones dentro del
Programa de ON a med. plazo por un monto de USD 1.500 MM." The
maturity of these bonds was not disclosed.

- US$100 million worth of "Series and/or Class" bonds described
as "Serie 9 de ON por USD 100 MM bajo el Programa de USD 1500
MM." The maturity of these bonds was not disclosed.

- US$275 million worth of "Series and/or Class" bonds described
as "Serie 5 por U$S 275 MM bajo el Prog. de Ons. a Mediano Plazo
por U$S1500 MM." These bonds will mature on May 1, 2009.

- US$250 million worth of "Series and/or Class" bonds described
as "Serie 10 por U$S 250 MM bajo el Prog. de Ons. a Mediano
Plazo por U$S1500 MM." These bonds will mature on April 30,
2007.

The rating action is based on the Company's financial status as
of September 30, 2004.


HIDROELECTRICA PIEDRA: Summons Class A Shareholders
---------------------------------------------------
Argentine hydro generator Hidroelectrica Piedra del Aguila S.A.
(HPDA) has called on Class A shareholders to attend a general
meeting on Feb. 21, 2005 at 10 o'clock am. The meeting will be
held in Av. Tomas Edison 2151, Buenos Aires.

Shareholders who will participate in the assembly are required
to send a notification to the company at this address: Av. Tomas
Edison 2701, piso 3, Buenos Aires, before Feb. 16 from 9 o'clock
am to 5 o'clock pm.


MULTICANAL: $719M in Bonds Remain in Default  
--------------------------------------------
The Argentine arm of Standard & Poor's maintains an `raD' rating
On a total of US$719 million of bonds issued by Argentine
company Multicanal S.A., according to the CNV.

The bonds are:

-- US$125 million of "Obligaciones Negociables simples, con
vencimiento a 10 anos, autorizada poa AGOyE de fecha 7.10.96",
due on February 1, 2007. These were classified under "Simple
Issue"

-- US$125 million of "Obligaciones Negociables simples, con
vencimiento a 5 anos, autorizadas por AGOyE de fecha 7.10.96",
which matured in February 2002, and classified under "Simple
issue".

-- US$150 million of "SERIE C, bajo el Programa de U$S 1050
millones", due on April 15, 2018. These were classified under
"Series and/or Class".

--US$175 million of "Serie E de Ons, bajo el Programa de U$S
1050 millones", also under "series and/or class". The bonds will
mature on April 15, 2009.

-- US$144 million of bonds called "Serie J de ON bajo el
Programa de ON de USD 1050 MM", with undisclosed maturity date.
These bonds are classified as "Series and/or Class."

The rating was given based on the Company's financial status as
of September 30, 2004.


PETROBRAS ENERGIA: Issues December Oil, Gas Production Averages
---------------------------------------------------------------
Petrobras Energia S.A. (Buenos Aires:PESA) announced Monday oil
and gas daily average production for December 2004.

Oil and Gas Production*
(thousands of boe/day)

                        Dec 04                  Dec 03
                   Month     12  Months  Month       12 Months

Oil Argentina         51.1        52.8       54.7       57.8
Oil Venzuela          48.1        48.0       45.5       40.1
Oil Peru              11.7        11.3       12.3       11.6
Oil Bolivia            1.3         1.4        1.3        1.4
Oil Ecuador            6.8         6.2        6.0        3.7
TOTAL OIL PROD       119.0       119.7      119.8      114.6

Gas Argentina         31.6        35.0       34.2       35.6
Gas Venezuela          3.7         4.2        4.1        3.5
Gas Peru               1.4         1.5        1.0        1.2
Gas Bolivia            6.1         6.3        6.1        6.4
TOTAL GAS PROD        42.8        47.0       45.4       46.7

TOTAL OIL & GAS PROD 161.8       166.7      165.2      161.3              

*Includes 2,8 and 3.2 thousands of BOE/day for December 2004 and
2003 respectively, for non-consolidated operations.

CONTACT: Petrobras Energia
         Phone: (5411) 4344-6655
         Mr. Daniel E. Rennis
         E-mail: drennis@petrobrasenergia.com

         Mr. Alberto Jankowski
         E-mail: Ajankows@petrobrasenergia.com

         Web site: http://petrobrasenergia.com

          
* ARGENTINA: Gramercy Advisors LLC Rejects Exchange Offer
---------------------------------------------------------
The following news release is being issued by Gramercy Advisors
LLC:

We have been asked for a reaction to Argentina's Exchange Offer
that was made public earlier this week; an offer that we believe
will fail to resolve Argentina's sovereign default. Gramercy,
for the reasons outlined below, intends to reject the current
offer, an offer that is really only Argentina's first official
offer made to the market since Argentina defaulted on their
obligations in December 2001. We encourage other investors to
follow suit.

Simple points, which compel Gramercy to reject Argentina's
current exchange offer:

1. The offer is unilateral in nature. It is not a result of good
faith negotiations.

2. The offer is not consistent with Argentina's capacity to pay.

3. The offer is not consistent with market precedents.

4. The offer fails to properly recognize and value past due
interest claims.

5. The offer is Argentina's first real offer to creditors, hence
it is just the beginning of negotiations not the end.

6. GCAB and its member organizations will remain in-place to
represent creditor interests around the world.

7. Participating in the current exchange eliminates the
possibility of higher recoveries.

8. The offer is not in accordance with Argentina's commitments
under its IMF program.

Gramercy is on the steering committee of the US-based creditor
group, Argentina Bondholders Committee "ABC" as well as the
Global Committee of Argentina Bondholders, "GCAB." We will
continue to work within these groups for deal enhancements
sufficient enough to merit our participation in any such deal.
We believe simple modifications of the transaction could be
effected which would significantly alter the exit valuation of
the deal. Absent of any such amendments, we will seek to recover
the contractual amounts due to us through litigation and
collection efforts. After having studied the exchange offer,
Argentina's intended payment methods and well established
precedents (Elliot vs. Republic of Peru, Pravin Banker vs.
Republic of Peru and Elliot vs. Republic of Panama and others)
we expect success in any such endeavor.

One of the positives of the current exchange offer is that
Argentina has now officially established a floor value for the
securities of approximately 30-35% of principal face value. We
interpret Argentina's current offer as an opening of
negotiations rather than the completion. As such, we will be
working diligently over the coming days and weeks to release a
counter-proposal.

Sincerely,

Robert Koenigsberger
Co-Managing Partner

CONTACT:  Gramercy Advisors LLC
          Robert Koenigsberger
          Tel: +1-203-552-1952
WEB SITE: http://www.gramercyadvisors.com


* ARGENTINA: Italian Creditors Turn Down Debt Swap Offer
--------------------------------------------------------
Italy-based creditors of Argentina have rejected the embattled
government's debt-swap offer, according to an Associated Press
report.

Argentine Finance Secretary Guillermo Nielsen was in Rome as
part of a European tour aimed at presenting Argentina's debt-
swap offer. But according to Elio Lannutti, who heads the
Italian consumer association Adusbef, Nielsen's meeting with
Italians was a "waste of time."

"We told him [Nielsen] that all Italians will reject the offer,"
said Lannutti. "Our proposal that Argentina increase the offer
was rejected. There weren't even any negotiations. We want at
least a 70 percent reimbursement."

Argentina is offering three different types of securities to
about 700,000 bondholders, who own 99 different defaulted bonds
denominated in eight different currencies. The government will
swap as much as US$43.2 billion of new bonds for US$81.2 billion
of defaulted bonds and isn't recognizing about US$20 billion in
past- due interest, according to a filing for the debt exchange
with the U.S. Securities and Exchange Commission.

Analysts say Italy, the first stop of Nielsen's tour, is a main
test overseas for Argentina's offer to restructure more than
US$100 billion in defaulted bonds. With some 450,000 individual
bondholders, Italy accounts for around 15 percent of the
eligible bonds.



===============
B A R B A D O S
===============

C&W BARBADOS: FTC Denies Motion for Review
------------------------------------------
                     IN THE MATTER OF
         The Fair Trading Commission Act CAP. 326B

                    AND IN THE MATTER OF
          The Utilities Regulation Act CAP. 282

                    AND IN THE MATTER OF
The Utilities Regulation (Procedural) Rules S.I. 2003 No. 104

BEFORE:

Mrs. Vivian-Anne Gittens
Chairman

Professor Andrew Downes
Commissioner

Mr. Gregory Hazzard
Commissioner

DATE: January 17, 2005


PART I - BACKGROUND

The Original Application

1. Cable & Wireless (Barbados) Ltd. "the Company" submitted an
application to the Fair Trading Commission "Commission" on
August 5, 2003 seeking:

  (a) an adjustment to the domestic line rate for business and
residential customers;

  (b) the introduction of flat rate charging plans and usage
based rates for domestic calls made from fixed lines;

  (c) such further or other relief not inconsistent with the
above as the Commission sees fit.

2. The Company in its application proposed revised rates for
residential and business users of the domestic service. The
Company stated that should the proposed domestic rates be
approved, the Company intends to adjust international direct
dialed (IDD) rates below the current maximum rates.
Original Decision

3. The Commission issued its decision on July 20, 2004 inter
alia denying the Company's application for a rate adjustment and
the introduction of usage based/flat rate plans for reasons
fully set out in its decision.

Filing of the Motion for Review

4. The Company filed a Notice of Motion for Review pursuant to
section 36 of the Fair Trading Commission Act CAP 326B and Rule
53 of the Utilities Regulation (Procedural) Rules, S.I. 104 of
2003 on August 5, 2004.

Order requested by the Company

5. The relief sought by the Company in its Motion for Review is
the relief sought by the Company in its original application.

6. In addition, the Company now seeks from the Commission a rate
adjustment in relation to domestic fixed to fixed voice and
domestic fixed line access as will result in these rates moving
towards cost that would allow the Company to make a reasonable
rate of return on the capital employed in the provision of
domestic fixed to fixed voice and domestic fixed line access.
The Company has left it to the Commission to determine the final
rate structure that would achieve this result be it that
proposed by the Company or some other rate structure, including
a flat rate as placed in evidence.

Written Hearing

7. The Commission decided that (a) the determination of the
preliminary review issue of whether the matter should be
reviewed and (b) the consideration of the review on the merits
to assess whether the decision should be varied or rescinded
would be by means of a written hearing pursuant to Rule 37 (1)
of the Utilities Regulation (Procedural) Rules S.I. 2003 No.
104.

8. On October 12, 2004 the Company filed written submissions
with the Commission. Intervenors having received late service of
the Company's written submissions were granted until November 2,
2004 to file their submissions. The Company filed a written
submission of reply on November 16, 2004.

9. The Commission granted leave to make brief oral presentations
to persons who so requested. On December 2, 2004 the Commission
heard oral summaries of their written submissions from the
Company, Public Counsel - on behalf of the Barbados Council for
the Disabled and Intervenors - Mr. Alvin Cummins, Barbados
Consumer Research Organization, CARITEL and Mr. Olson Robertson.

Consolidated Hearing

10. Rule 55 (1) of the Utilities Regulation (Procedural) Rules
S.I. 2003 No. 104 states:

"(1) The Commission shall determine with a hearing, in respect
of a motion brought under Rule 53 the threshold question of
whether the matter should be reviewed or whether there is reason
to believe the order should be rescinded or varied."

In accordance with Rule 55(3) the Commission decided that it
would combine the consideration of the threshold question and a
review on the merits and would hold a consolidated hearing. In
light of this the Company and some Intervenors addressed both
(a) the threshold question and (b) the review on the merits to
determine whether the decision should be varied or rescinded in
their written submissions.

Intervenor Participation

11. The following Intervenors participated in the proceedings by
filing written submissions and presented brief oral summaries in
response to the Company's Notice of Motion for Review:

Public Counsel
(on behalf of the Barbados Council for the Disabled)
Mr. Alvin Cummins
Barbados Consumer Research Organization Inc. (BARCRO)

CARITEL
Mr. Olson Robertson
Mr. Alvin Thorpe

Duty of Commission

12. In Regulatory Rate Hearings the Commission sits as an
adjudicative panel and is required by legislation and principles
of natural justice to make a determination based on the evidence
put before it. By virtue of section 36 of the Fair Trading
Commission Act CAP. 326B the Commission has jurisdiction on
application or on its own motion to review vary or rescind any
decision given by it. The decision to allow review is not taken
lightly and instances which it can review are prescribed by the
statutory instrument. The Commission's discretion to review and
vary or rescind a decision or order is applied with a view to
ensuring there is consistency and predictability in the
Commission's decision making process.

13. A review is not a vehicle for applicants or Intervenors to
reargue their submissions made at an earlier hearing simply
because they do not agree with the decision. Under the Fair
Trading Commission Act, the authority of the Commission to allow
a review is discretionary. An applicant must first demonstrate,
on a prima facie basis, the existence of the permissible grounds
of Review, this is referred to as the threshold question.

14. To discharge its first task vis a vis whether a review
should be granted the Commission considered the Motion for
Review and the complete written submissions and presentations
received from the Company and the Intervenors.

The Threshold Question

15. The Company invited the Commission to consider its full
written submissions when determining the threshold question of
whether the decision of July 20, 2004 should be reviewed and to
determine whether the decision and order should be varied or
rescinded - a review on the merits.

16. The Company cited Bell Canada case Telecom Decision CRTC 79-
1 Ottawa, February 2, 1979 in support of its view that to meet
the threshold for a review an applicant had to demonstrate on a
prima facie basis, the existence of one or more of the grounds
for review.

17. The Company further submitted that the Commission should
also consider the approach set out in Order 53 of the English
rules of the Supreme Court and the local equivalent where, for
leave to bring an application before the court i.e. standing, an
applicant needed only to establish that on a preliminary
examination an arguable case exists.

18. Public Counsel in his submissions considered that the
Company had misconstrued the threshold question by seeking to
rely on Order 53, as this Order establishes a procedure which
elates to standing. He further submitted that the Company is
required to show on a prima facie basis that an error of law or
fact exists by presenting specific examples of error by
reference to the evidence. It was his view that the Company had
not presented to he Commission any facts which would support (a)
the existence of an error in fact or in law or (b) that the
decision raised an important principle.

19. The Commission does not agree with the Company that the
rules relevant to Order 53 or those which seek to determine
issues of standing or locus standi are applicable when one is
determining the threshold question. Order 53 addresses a
situation where a potential applicant seeks to establish
standing. The Utilities Regulation Act Procedural Rules has its
own rules with respect to standing. These are set out at Rule
53. By virtue of the Utilities Regulation Act Rule 53(2) the
Company already has locus standi to request a review.

20. The threshold question as set out at Rule 55(1) is a
distinct and separate matter from that of locus standi. The
Commission approached the threshold question by considering
whether the Company had established on a prime facie basis that
an error of fact or law existed or that the decision raised an
important principle that contravenes or contradicts established
regulatory principles.

21. According to Black's Law Dictionary, a prima facie case is:

(a) the establishment of a legally required rebuttable
presumption;

(b) a party's production of enough evidence to allow the fact-
trier to infer the fact at issue and rule in the party's favor.

22. The Commission in this hearing was in a unique position
because of the utilization of a written hearing and a
consolidated process to have before it all the submissions that
would have been presented to support a review on the merits.
With this body of arguments before it the Commission took the
opportunity to examine the allegations of error and all the
grounds submitted in support of the Motion for review, to first
determine whether the Company produced enough evidence to infer
the existence of a ground for review.

PART II - STATUTORY GROUNDS FOR MOTION

Onus of Proof

23. Under section 14 of the Utilities Regulation Act the onus
rests on the Company to prove its case and this burden applies
to this Motion for Review proceedings.

Evidence before the Commission

24. The Company has not filed an affidavit in this hearing
setting out the facts on which it relies in support of its
Motion for Review. The Utilities Regulation Act (Procedural)
Rules requires the filing of such an affidavit. Rule 54 (1)
states that the Company must comply with Rule 8 and file an
affidavit setting out the relevant facts it relies on in support
of its Motion.

25. The Company filed a Notice of Motion for Review and Written
Submissions. In its written submissions the Company simply
stated it would rely on the evidence on the record of the
original hearing.

26. In this Motion for Review the Company did not avail itself
of the opportunity to place before the Commission any facts by
way of affidavit. The Company has also not utilized the
opportunity presented by this Review proceeding to place before
the Commission any facts that were not previously placed in the
evidence in the original hearing and which could not have been
discovered by reasonable diligence at the time.

27. Further, while the Company initially stated it would request
leave to submit further evidence in support of its application
for a review the Company later withdrew this request.

28. The Intervenors were of the view that the Company did not
present any evidence which met the statutory grounds for review.
The Commission was therefore invited by the Intervenors to
reject the motion in its entirety.

Grounds for Review permitted by Statute

29. Rule 54 of the Utilities Regulation (Procedural) Rules sets
out specific grounds on which the Commission can review a
decision made in a utility regulation proceeding. These are
enumerated at Rule 54 as follows:

"54 (1) Every Notice of Motion for Review made under rule 53
(2), in addition to the requirement of rule 8 shall (a) set out
the grounds upon which the motion is made sufficient to justify
a review or raise a question as to the correctness of the order
or decision and the grounds may include (i) error of law or
jurisdiction; (ii) error of fact;(iii) a change of
circumstances;(iv) new facts that have arisen;(v) facts that
were not previously placed in evidence in the proceedings and
could not have been discovered by reasonable diligence at the
time;(vi) an important matter of principle that has been raised
by the order or decision"

PART III - POSITION OF THE COMPANY

30. The Company in its Notice of Motion for Review relied on the
following grounds:

(i) error of law;
(ii) error of fact;
(iii) an important matter of principle that has been raised by
the order or decision.

31. The Company arguments were set out in written submissions
comprising 169 pages. The Commission finds that a great deal of
repetition of argument has occurred and therefore sets out the
arguments presented by the Company, in summary form as follows:

- That contrary to the finding in the Decision the Commission
had all the information (including but not limited to the
revenues from the other services which used the domestic
service) which the Commission needed in order to make a proper
determination of the Company's application for rate adjustment
for the two services namely domestic fixed to fixed voice and
domestic fixed line access. Further that even if the Commission
needed further information it should have requested the same.

- That the Commission had misconstrued the Company's original
Application "Application" and had therefore erred in its finding
that it had to consider other sources of revenue from services
which used the domestic network.

- That by not allowing the Company an adjustment to its rates,
the Commission erred and acted in breach of the Utilities
Regulation Act in not allowing the Company to make a fair return
on capital.

- That the Commission misinterpreted the Application in respect
of which services were the subject of the Application and
misinterpreted the Company's evidence and arguments with respect
to the revenue requirement being greater than $24.7 million.

- That the Commission erred in that it failed to have any or
sufficient regard to the Company's cost allocation model called
the EAM and wrongly concluded that the EAM "was not particularly
useful in determining the Application and that the EAM co-
mingles regulated and unregulated cost and revenue."

- That the Commission erred in its finding that it could not
make a determination of the Application until it had information
on the availability of financial contributions from the
Universal Service Fund and Access Deficit Charges in that
revenues from these sources did not exist in the Test Year and
still do not exist and that this raises an important principle.

- That the Commission erred in law and fact in determining that
the Company did not prove on a balance of probabilities that a
rate adjustment was merited. Furthermore, this finding is
contrary to the evidence before the Commission which states that
the domestic services are provided in substantial deficit and
that relevant services are operated in deficit.

- That the Commission did have before it information on which it
could have fixed other alternative rates and, misinterpreted its
powers and duties under the Utilities Regulation Act which
imposes a duty and gives the Commission the latitude to fix
fair and reasonable rates.

- That the Commission ignored or failed to give weight to the
MOU and Government Policy Objectives outlined in the Green Paper
on Telecommunications Sector Policy.

- That the Commission misconstrued or ignored the evidence
before it in relation to the proposed mechanism for customers to
select a rate plan.

- That the evidence did not support the Commission's finding
that an unacceptable degree of uncertainty plagued the model
with respect to its ability to generate $24.7 million.

- That consideration of customer equity is irrelevant to the
proper determination of the proposed rate structure.

- That it was never the Company's case that the proposed rate
structure was designed to alleviate congestion.

- That the Commission erred in finding the Company did not
submit the terms and conditions relevant to proposed rate
structure and that this limited the Commission's full assessment
of the effect of the implementation and application of the
rates.

- That the Commission erred as it did not indicate to the
Company that it was required to carry out a marginal cost study
or sensitivity analysis.

- That such studies were not required by the Public Utilities
board or by any existing rule or principle.

- That the Commission breached the duty of fairness and
principles of natural justice in its failure to give adequate
and sufficient reasons for its Decision.

- That the Commission excluded legitimate costs from the
Company's revenue requirements without valid justification for
exclusion namely deferred taxes and rate case expenses.

- That the Commission erred in law and in fact in considering
the effect of CPE as the asset. CPE is irrelevant to the
determination of rates and cost of service.

- That the Commission misunderstood or misapplied certain
aspects of the law relating to the Revenue Apportionment Order
and section 15 (3) of the Utilities Regulation Act.

PART IV - REASONS FOR DECISION

The Company's Grounds for a Review

32. The Company argued in its Written Submissions that some
twenty-eight (28) instances exist that would show that the
Commission "erred in law and/or fact" in various areas of its
Decision; sometimes it cited law relating to each type of error
and referred to sections of the evidence presented at the main
hearing. However in large part the Company has failed throughout
to identify specifically any areas of evidence and to
demonstrate to the Commission where it fell into an error of law
or an error of fact, or possibly an error of mixed law and fact.

33. The Company left it up to the Commission to search the
record and the references it gave to determine whether the
evidence exists that would demonstrate a misinterpretation and
that would show where the mentioned situations were an error of
law or an error of fact.

34. The Company in its Motion for Review and Written Submissions
advances arguments in support of its request for review. Several
of the grounds presented by the Company contained repetition of
submissions where common or related issues are raised. For
convenience and clarity the Commission has sought to address
them as a group. The Commission has grouped the grounds as set
out below. The Commission will now deal with these grounds
seriatim in the body of the Decision.

Grounds 1, 2, 4, 5, 13, 17, 22, 25 and 26 of the Motion for
Review

- The Company argues that the Commission had all the information
(including but not limited to the revenues from the other
services which used the domestic service) which the Commission
needed in order to make a proper determination of the Company's
application for rate adjustment for the two services namely
domestic fixed to fixed voice and domestic fixed line access.
Further that even if the Commission needed further information
it should have requested the same from the Company.

- Further that the Commission had misconstrued the Company's
original Application and had therefore erred in its finding that
it had to consider other sources of revenue from services which
used the domestic network.

- That by not allowing the Company an adjustment to its rates,
the Commission erred and acted in breach of the Utilities
Regulation Act in not allowing the Company to make a fair return
on capital.

- That the Commission misinterpreted the Application in respect
of which services were the subject of the Application and
misinterpreted the Company's evidence and arguments with respect
to the revenue requirement being greater than $24.7 million.

Nature of the Company's Application

35. In its application the Company requested that the Commission
approve an adjustment to the line rental rate for business and
residential customers. In order to do this the Commission as
regulator must examine the revenue requirement of the domestic
service as provided in the test year by the provider of the
domestic service. Such is the proper remit of a regulator in a
rate adjustment exercise and is the accepted approach.

36. Revenue requirement is the amount of revenue required by a
utility to cover the sum of operating costs including debt
service, depreciation, taxes and allowed return on rate base ($
rate base x cost of capital). The revenue requirement is the
total amount of money a utility is eligible to collect from
customers through rates.

37. The revenue requirement provided in evidence was that for
the domestic service. The Commission was specifically requested
by the Company in the relevant part of its application to
consider:

"An adjustment to the domestic line rate for business and
residential customer;"

38. The Company then sought to have a fair return on its rate
base. The rate base being an amount of investment in the
domestic service. The Company argues in essence that the
Commission should have disregarded this request and only seek to
address the revenue requirements of the domestic fixed-to-fixed
voice calling and domestic fixed line access.

39. The Company has at times invited the Commission to consider
the domestic service and to assess its revenue and costs, yet at
other times has requested that the Commission only consider the
revenues and costs with respect to the domestic fixed line
access and domestic fixed-to-fixed voice calling. This was the
first time that the Company sought to introduce a new
categorization and sub-division of the existing line rental
service.

40. The Company presented evidence as to the cost of domestic
service and the revenue earned from the domestic service as a
whole and sought to demonstrate to the Commission that there was
a short fall in the global revenues [as set out in Memorandum of
Financial Information with respect to $199 million revenue
requirement]. The application included domestic revenues of $127
million which were over and above that which was ascribed to the
sub-divided line rental service which the Company called (a)
domestic fixed-to-fixed voice calling and (b) domestic fixed
line access. In this Review as in the original hearing the
Company continues to vacillate about the nature and scope of the
application before the Commission. This resulted in an
inconsistency of argument and requests.

41. There are no regulated services known as domestic fixed line
access and domestic fixed-to-fixed voice calling. The existing
service is known as line rental for which a ($28) charge
applies. The domestic fixed-to-fixed voice calling and domestic
fixed line access are constituent parts of a line rental
service, which is one of a number of services provided under the
category of domestic services.

42. The invitation for the Commission as regulator to only look
at the two services presents a danger in itself given the
amalgamation of the Company and the consolidation of the
Company's statutory and other financial statements. The
regulator's concerns include variations in accounting separation
objectives, cross subsidies between regulated and non-regulated
services as well as anti-competitive practices. The appearance
of a deficit or surplus on a "service" is inextricably linked to
the manner in which revenues are imputed and or allocated as
well the manner in which costs are treated and reported.

43. The Company argued that the Commission erred in fact and in
law in its determination that "the full pool of applicable
revenues from the domestic service had not been put before it in
that such information was put before the Commission in evidence
and/on the record."

44. The Company has in this hearing failed to identify in the
evidence the quantum of revenue the domestic service received
from the other users of the domestic facilities.

45. International Revenues: In the original hearing the evidence
was that in the financial statement for regulatory reporting for
the year ended March 31, 2002, the Company declared revenue of
$184,264,000, which included an amount of $56,691,000 in respect
of international calls. The Company claimed this amount was a
revenue transfer from CWBET on the basis of the revenue sharing
arrangement. The Company states in Schedule 4 of the Application
for rate adjustments that "the revenue transfer is not
reflective of the underlying cost of domestic service provision
and is not cost oriented and was not a commercially determined
fee based on cost."

46. The Company's witness Mr. Paul Taylor, who designed the
proposed tariff structure in his affidavit, included a Peat
Marwick Study which states:

".The current revenue sharing agreement is not an appropriate
mechanism for the transfer of the subsidy from the international
operations to the domestic network. With respect to
international calls BarTEL provides customers with access to the
international network owned and operated by BET. Looked at
another way, BET needs BarTel in order to gain access to the
customers who make international calls. BarTel should be paid
for providing this access. The revenue sharing approach however
does not reflect the costs BarTel incurs in providing access to
the local customer."

47. The Commission`s conclusion that the revenues properly
earned by the domestic service and due to it from the
international service for the latter service's use of the
domestic service was not before it remains unaltered.

48. The Commission therefore rejects this as a ground for
review. The Company's submission on this ground disregarded the
totality of the evidence presented at the original hearing on
these issues. Further the Company does not identify the specific
contravention of any important principle. The Company has not
established on a prima facie basis that a ground for review
exists.

49. Cellular Revenues: It was the Company's evidence as
presented by its expert witness at the original hearing that
revenues should go to the domestic service from the cellular
service for the use of the domestic network. It was the evidence
of the Company in response to interrogatory set 1 #3.3 that the
$4.8 million revenue received from CWCC was payment to CWBARTEL
for a number of items which included line and equipment rental,
management fees, lease circuit revenue, airtime and moneys for
rental of space at Grazettes. This amount was not presented as
the total revenue paid to the domestic service for use of its
facilities.

50. Internet Revenues: The Company did not provide to the
Commission an amount which represents the revenue the Internet
service pays for use of the domestic service facilities. The
evidence provided by the Company's Financial Controller, Mr.
Cochrane was that "the costs that are considered to relate to
the provision of the Internet service are costs of Bartel that
have been charged out to Cable & Wireless BET and do indeed form
revenue of Bartel."

51. Moreover, the Internet service was provided by a subsidiary
of CWBET and the revenues would have been included in the CWBET
Revenues and not in the CWBARTEL revenues. These revenues
therefore would not have been in the amount of $127 million
which was revenue earned by the domestic service in the test
year.

52. Interconnection Revenues: The Company in its evidence stated
that persons interconnecting to the domestic network and using
its facilities (PSTN) should be paying the domestic service for
this use. At day 36 lines 1338 - 1352 of the transcript the
Company's President, Mr. Austin states that revenue from
interconnection would contribute to a reduction of the deficit.

53. The Commission remains of the view that it needed to
ascertain the revenue from this source; such being relevant to
the application before it for an increase in rates and a
revision of the tariff structure.

54. The Company's arguments that the revenues were provided is
contrary to the body of evidence presented and does not on a
prima facie basis establish the existence of an error of law or
fact or raise an important matter of principle. It is therefore
rejected.

Burden of Proof

55. While the Commission sought to clarify the case as presented
by the Company through interrogatories, questions to witness and
data requests, the legislation clearly states at Utilities
Regulation Act section 14 that the burden of proof shall be on
the service provider.

56. The Commission is entitled to ask questions of the Company
and it is entitled to ask the Company to produce further
evidence to which the Company makes reference, or clearly relies
on to establish its case. It is entitled to ask the Company to
produce exhibits in support of this case. However, there must be
a limit for the burden of proof always remains on the Company.

57. There is no duty on the Commission to think of or devise,
every possible question or combination of questions to put to
the Company, nor is there an inexhaustible duty to require the
Company to produce exhibits. The record will show that the
examination of witnesses by the Commission and its counsel was
exhaustive, covering diverse technical and relevant areas. The
Commission cannot be faulted for not putting questions or
seeking presentation of the exhibits that the Company now seeks
to determine was a breach of statutory or other duty. In the
original hearing the Commission made requests for information
due to the incomplete and inadequate nature of the responses and
as oftimes responses were provided without relevant information.

58. The Commission is of the view that it is ultimately for the
Company to determine the extent and nature of evidence it will
lead. It is not the duty (statutory, by custom or otherwise) for
the panel take over the Company's burden and prove its case for
it.

59. These matters raised do not present a prima facie basis a
ground for review.

Proposal to recover $24.7 million

60. In determining whether a deficit exists on the domestic
service the revenue earned by and attributable to the domestic
service must be fully accounted for and presented before one can
ascertain the existence and magnitude of a deficit. The
Commission finds that this submission does not raise a prima
facie case of an error in fact or in law in the Commission's
ascribing relevance to the other revenues that should be
attributed to the domestic services.

61. In Schedule 6 of its Rate Application the Memorandum on Rate
Structure submitted by Mr. Chris Carpenter stated at paragraph
90 " the proposal seeks to recover from the domestic calling and
line access an amount of $24.7 million in two phases." Further
paragraph 22 of the Memorandum of Financial Information attached
to the Application noted that the revenue arising from the new
domestic rates is $24.7 million.

62. The Commission therefore rejects this as a ground for
review. The Commission finds that the Company has not
established on a prima facie basis that an error of law or fact
was made in the Commission's finding that "the Company stated
that the new rate structure as proposed is intended to provide
additional $24.7 million to meet the revenue requirement of the
domestic service."

Grounds 3, 8, 9, 10, 13, 14 of the Motion for Review

The Company argued that the Commission erred in that it failed
to have any or sufficient regard to the Company's cost
allocation model called the Enhanced Allocation Model (EAM) and
wrongly concluded that (a) the EAM "was not particularly useful
to the Commission in determining the subject matter in this
Application" and that (b) the EAM "co-mingles regulated and
unregulated cost and revenue."

The Company's Enhanced Allocation Model

63. The Company in its Motion for Review has argued that the
revenues from users of the domestic facilities are contained in
the EAM. The Company submitted that this EAM "the costing model
used by the Company in support of its Application, was submitted
to the Commission to assist the Commission in being able to
separately identify the costs and revenues of the relevant
services."

64. The Commission maintains its view that the EAM was not
particularly useful to it in its determination of the
application. There are in excess of one hundred (100) individual
regulated services that comprise the domestic service. However,
the EAM as presented to the Commission only contains twenty-
eight (28) services, the categories and titles of which do not
correspond in large part with the list of regulated services. It
was not demonstrated to the Commission that the EAM captures or
records costs and revenues for each regulated service that
comprise the domestic service. The Commission therefore could
not identify or ascertain the separate costs and revenues
attributed to each regulated service that makes up the domestic
service. Services such as Smart Choice or Comnet are not
recognizable within the service profitability model referred to
as the EAM.

65. Moreover, the Commission was not in a position to reconcile
he information in the EAM with the figures submitted in the
application document. The EAM provided no support to the
Company's claims with respect to the revenue requirement of the
domestic service i.e. the $199 million. During the course of the
original hearing the Commission expressed to the Company its
concern that the figures in the EAM and the revenue requirement
ere not reconciling. On day 34 of the hearing the Chairman of
the panel sought to ascertain whether the figures in the EAM
were reconciled to the regulatory financial statement.

66. The Chairman of the panel (on day 34 line 91 -101)
specifically requested that reconciliation be done by the
Company to assist the panel in ascertaining the cost, revenues
and rate base with respect to the regulated domestic service.
The commission as regulator was particularly interested in, and
had to concern itself with the regulatory financial statements
to see if these displayed a deficit after revenues and costs
were appropriately allocated.

67. If the input data was deficient or the revenues and costs
inappropriately apportioned among the 28 categories this would
have a direct effect on the costs and revenues assigned to the
sub-divided services presented by the Company i.e. line rental
and its constituent parts including (a) fixed to fixed line
access and (b) fixed to fixed voice calling.

The Commission maintains that the cost of the domestic service
is fully borne or ascribed to the domestic rate payers.

68. The Commission therefore rejects as a ground for review that
it erred in finding that the costs are borne by the domestic
network as such has not been established on a prima facie basis.

69. The failure to provide reconciled information to the
Commission meant that the Commission could not check or verify
the figures or the reports generated from information in the EAM
against those presented in the regulatory financial accounts for
the test year.

70. The amount of deficit recorded in the EAM which co-mingles
costs and revenues of the services provided by the four former
entities of C&W is significantly less than the over $72 million
which the Company claimed for the domestic service and which was
provided by one entity CWBARTEL. The Commission finds that the
numbers just do not reconcile. The EAM, as a consolidated
document presents the costs and revenues of the four C&W
entities together which includes the former CWBARTEL (domestic
service) and CWBET (international service), and does not
highlight the costs and revenues associate with regulated
services.

71. In light of the above the Commission finds that it did not
err in law or in fact when it found that it must consider all
the relevant sources of revenue. Such sources have not been
placed before the Commission for its consideration during the
Review.

72. The Commission acknowledges that the Company's witness Mr.
MacPherson attested to the robustness of the methodology of the
EAM model used by the Company primarily to determine the
profitability of its retail (not regulated) services. This
witness did not test the nature or quality of the input data to
the regulatory financial reports, as that was not his remit. Nor
did he carry out any tests of the data. He stated he examined
the methodology of the model.

73. The Company's submissions do not demonstrate on a prima
facie basis show that an error of law or fact was made or an
important principle was contravened by the Commission. The
Company's arguments amount to a dissatisfaction with the weight
the Commission attributed to the evidence about the EAM. It is
within the proper purview of the Commission to determine the
weight it attaches to the evidence before it and this was done
in the case of the EAM.

The Company's Cost Allocation Model

The Company argued that the Commission erred in finding that the
Company had refused to develop and put before it a cost
allocation model.

74. The evidence of the Company's Vice President was that the
Cost Allocation Model "CAM " to all intents and purposes was
dropped from further development and replaced by the EAM
(Transcripts page 2235 lines 2683 - 2691.) The CAM has different
objectives. The primary objective of the EAM was to determine
the profitability of its retail services.

75. The Commission therefore does not see that an error is
established on a prima facie basis in its conclusion that the
CAM was not developed, and placed before it.

Ground 6 of the Motion for Review

The Company argued that the Commission erred in its finding that
it could not make a determination of the Application until it
had information on the availability of financial contributions
from the Universal Service Fund and Access Deficit Charges in
that revenues from these sources did not exist in the Test Year
and still do not exist and that this raises an important
principle.

Access Deficit Charge & Universal Service Fund

76. The Company has not identified any particular error in the
Commission decision but has only stated that there was
"substantial doubt as to the correctness of the Commission's
determination" and that the Commission established a new
principle in its Decision by finding that it was not in a
position to determine rates without knowledge of the
availability of the financial contributions from the two
sources.

77. The Company argues that statements made by the Commission in
a draft consultation paper should be considered in this Hearing.
The draft Access Deficit Charge (ADC) consultation paper was not
a part of the record/evidence of the original hearing or this
Motion for Review proceeding and will therefore not be
considered by the Commission.

78. While the Company now submits that the issue of the
availability of funds from the Universal Service Fund was not
relevant, the Company's evidence on the record contradicts this.
The Company's President in his Affidavit stated that "existing
and future services which are not cost oriented will be funded
by universal service contribution from all service providers in
Barbados on a non discriminatory basis." The Company itself
underscored the relevance of this issue to the determination of
the original application by addressing this issue in its
evidence at that hearing. This means that funds from this source
would meet any deficit that exists on the domestic service which
the Company argues is not cost-oriented. Moreover in the EAM the
Company has inserted a figure under the heading Access Deficit.
This may represent an estimate of the ADC.

79. The Commission therefore finds that on a prima facie basis
the Company has not established a ground for review. This is
because neither an error of law or fact has been established on
a prima facie basis nor has it been established that the
decision raises an important principle.

Ground 16 of the Motion for Review

The Company argued that the Commission erred in law and fact in
determining that the Company did not prove on a balance of
probabilities that a rate adjustment was merited. The Company
further claims that this finding is contrary to the evidence
which states that the domestic services are provided in
substantial deficit and that relevant services are operated in
deficit.

Balance of Probabilities Test

80. The Commission did not find that there was a deficit in the
provision of the domestic service (see paragraph 130 of
Decision) because it was not in a position to ascertain critical
revenues. The full revenues earned by domestic services must be
ascertained before one can determine whether the domestic
service is operating in deficit or meeting its costs.

The Financial Controller and the Vice President, Regulatory
Finance in speaking of the deficit claimed relied on the EAM.
The Commission has rejected the EAM as the nature and quality of
the input figures were not tested even by the witness Mr.
MacPherson and did not tally with regulatory financial
statements. They were conspicuous lacunas in the evidence.

81. Throughout this Review the Company while seeking to have the
Commission rebalance rates sought to draw the Commission's
attention to only two categories of services and ignored other
services that appear to be provided in excess of costs, that is
with significant high profit margins. The Commission's mandate
was to ascertain (a) whether the Company had enough revenue to
meet the revenue requirements of the domestic services to allow
the Company a fair rate of return on rate base, (b) whether a
rate adjustment was needed from line rental to meet the
foregoing and (c) to consider for approval the tariff structure
proposed.

82. The Company has not indicated the important principle that
the Commission failed to consider by its Decision.

83. The Commission remains of the view that until the Company
properly attributes revenue to domestic services that it earns
by allowing others to use its facilities, that the Company has
not proven its case that a rate adjustment is needed on a
balance of probabilities.

84. The Commission finds that this submission does not establish
on a prima facie basis the Existence of any of the statutory
criteria for review.

Grounds 17, 21, 22, 23, 24, 25 of the Motion for Review The
Company argued that the Commission did have before it
information on which it could have fixed other alternative rates
and, misinterpreted its powers and duties under the Utilities
Regulation Act which imposes a duty and gives the Commission the
latitude to fix fair and reasonable rates.

Alternative Rate Structures

85. While the Company's witness Mr. Taylor, at pages 1646 -1648
of the Transcript and in particular at lines 1040 - 1048
outlines the various options he examined in designing the rate
structure he highlighted the difficulties and problems with each
option and summarily dismissed them as viable options. The
Commission therefore could not consider these comments as
proposals of alternate tariff structures put before it for its
consideration.

86. Moreover the Company's Chief Executive Officer on day 35
lines 2526 - 2554 of the Transcript further outlined the
shortcomings of a $36 flat rate as he stated that it would
result in consumer inequity, unfairness and low users
subsidizing heavy users of the service.

87. The Commission is of view that evidence must be presented at
the original hearing with respect to a viable alternative rate
structure was not sufficient to allow it to ascertain inter
alia:

(a) the level of revenues the Company would have been able to
attain from alternative rate structures to meet the cost of
providing the domestic service;

(b) the fairness and the reasonableness of the rate derived the
rate from each alternative structure; and

(c) the ease of implementation.

88. The submission by the Company that evidence of an
alternative tariff structure was presented to the Commission,
does not present a full and accurate picture of the nature and
extent of the evidence at that hearing.

89. Further the Company did not identify the important principle
raised by the Commission In this proceeding there is no evidence
before the Commission on these issues and the Commission rejects
the submission as a ground for review.

Government Policy

The Company claims that the Commission ignored or failed to give
weight to the Memorandum of Understanding (MOU) and Government
Policy Objectives outlined in the Green Paper on
Telecommunications Sector Policy.

90. In the original hearing the Commission took into
consideration all existing Government policy that it is legally
bound to consider as a statutorily established regulatory body

91. The Commission is of the view that this submission does not
present a ground for review as it does not establish on a prima
facie basis that the Commission fell into error of law or fact
or raised an important matter of principle that contravenes
established regulatory and other principles.

Locked into plans

The Company claims that the Commission misconstrued or ignored
the evidence before it in relation to the proposed mechanism for
customers to select a rate plan.

92. The Commission notes that the Company in paragraph 21.2 of
the Motion to Review states that ".to the extent that 30 days'
notice is required to change plans, the Company concedes that
the customer would be locked into a particular plan for a period
of time".

93. The Commission therefore sees no possible error in it
stating that the customer is locked to that plan for a period of
time and therefore rejects this as a ground for review.

Uncertainty of recovery of $24.7 million   

The Company claims that the evidence did not support the
Commission's finding that an unacceptable degree of uncertainty
plagued the model with respect to its ability to generate $24.7
million.

94. The revenue collected by the Company from the proposed
revised tariff structure is dependent on the extent of the
movement of all customers to plans based on their usage. If all
persons moved to the lower plan then the Company would receive
less than the $24.7 million in revenue it sought.

95. The regulator must have a sense of how the elasticized in
demand would affect revenue when there is a change in prices.
Furthermore revenue generated from any rate structure is
sensitive to the extent of movement from one plan to the next.

96. The Commission remains of the view that information
generated from a sensitivity analysis and marginal cost study
would allow a Company and regulator to determine the efficacy,
affordability and appropriateness of a revision to an existing
tariff structure. The reasons are set out in the sections
entitled Sensitivity analysis and marginal cost study.

97. The Commission also remains of the view that it is not
possible to reasonably predict whether significantly more or
less than the stated $24.7 million would be generated. As the
Company did not present any significant evidence or analysis to
demonstrate the behavior of its proposed rate structure with
changes in customer demand, an unacceptable degree of
uncertainty surrounds the revenue that would be generated.

98. The Commission finds that the Company has not established on
a prima facie basis that a ground for review exists.

Customer Equity

The Company claims that the Commission's consideration of
customer equity amounted to an error in law or fact as the issue
of consumer equity is irrelevant to the proper determination of
the proposed rate structure.

99. The Commission has the statutory responsibility to consider
consumers' welfare and to ensure that there is no undue
discrimination in the rates vis a vis classes of consumers. The
Commission is of the view that customers who buy the same volume
of calls should pay the same amount otherwise inequity would
result. The evidence of the Company at the original hearing
underscored the relevance of this issue in the evaluation of the
appropriateness of a tariff structure. The Commission was also
invited by the Company to assess the rate plan with respect to
its ability to produce consumer equity. At page 8 paragraph 26
of Mr. Taylor's affidavit evidence he, on behalf of the Company,
stated "The Applicant also considered moving to a purely metered
regime. The Green Paper notes, at p. 74, that "consumers should
be given the opportunity to pay only for what they use, thereby
ensuring a situation of equity and fairness among consumers with
respect to their use of the service."

100. Further, the Company's Chief Executive Officer in giving
evidence on day 35 lines 2526 - 2554 of the transcript noted a
shortcoming of a $36 flat rate option was that it would result
in consumer inequity.

101. It has not been established that on a prima facie basis
that the Commission has erred in taking this factor into
consideration and therefore this ground for review is rejected.

Return on Capital

That by not allowing the Company an adjustment to its rates, the
Commission erred and acted in breach of the Utilities Regulation
Act in not allowing the Company to make a fair return on
capital.

102. The Company argued that the Commission's failure to fix
rates did not allow the Commission a reasonable return on
capital in respect of the two services (a) domestic fixed to
fixed voice calling and (b) domestic fixed to fixed line access.

103. The Commission remains of the view that the statutory
reference to earning a reasonable return on capital must be
determined by examining the revenue requirement for the
provision of the domestic service by CWBARTEL not by examining
specific individual services provided by the domestic service
provider.

104. The Company has not established on a prima facie basis that
the Commission has erred and this round for review is rejected.

Congestion

The Company claims that it was never the Company's case that the
proposed rate structure was designed to alleviate congestion.

105. The Company's witness presented evidence on the issue of
congestion. The Company's engineer in Schedule 5 of the
Memorandum on Network discussed extensively the current
congestion problem and attributed part of this to the flat rate
system. In addition when asked whether the move to a usage based
pricing would resolve the congestion problem, the witness
responded that it would.

106. The Company has presented the recurring congestion problem.
Its attendant escalating costs, as a major challenge. A change
in rate structure may significantly dampen (or increase) network
operating and capital costs, which would in turn affect the
rates. The Commission remains of the view that the impact of the
proposed rates on the Company's network congestion problems is
relevant and that the Commission did not err in fact or law in
finding that the proposed rate structure was designed to
alleviate congestion and rejects this as a ground for review.

Additionally, the Commission is of the view that this ground did
not raise an important principle.

107. The Commission therefore finds that on a prima facie basis
this ground has not been established.

Terms and Conditions

The Company claims that the Commission erred in finding the
Company did not submit the terms and conditions relevant to
proposed rate structure and that this limited the Commission's
full assessment of the effect of the implementation and
application of the rates.

108. The Commission considers that each rate structure should
have terms and conditions. The new rate structure is
significantly different to the current rate structure and the
Company admits at paragraph 25.1 of the Motion for Review ."that
the terms and conditions would vary significantly if the new
proposed rate structure was approved." The Commission is of the
view that terms and conditions to the new rate structure are
relevant and should have been submitted by the Company.

109. The Commission therefore finds that on a prima facie basis
this ground has not been established.

Grounds 19, 20, 27 of the Motion for Review Sensitivity analysis
and marginal cost study

The Company claims that the Commission erred as it did not
indicate to the Company that it was required to carry out a
marginal cost study or sensitivity analysis and that such
studies were not required by the Public Utilities Board or by
any existing rule or principle.

The Company argues that the Commission breached the duty of
fairness and principles of natural justice in its failure to
give adequate and sufficient reasons for its Decision.

110. The Company must do more than merely state that a duty is
breached. It must demonstrate on a prima facie basis that an
error has occurred which would be reviewed by the Commission.

The Commission provided extensive reasons in its fifty-four (54)
page Decision. The Company's submissions in this regard provide
no basis for review.

111. The evidence presented in Mr. Taylor's affidavit in
paragraph 27 stated "The Applicant is mindful of the
sensitivities and perception about usage based prices for
telephone service. Furthermore, while consumers in Barbados are
already accustomed to pay for services such as electricity,
water and mobile telephone services on a metered basis, some
consumers have been openly opposed to the introduction of usage
based charges for the domestic phone service. These
sensitivities, however, have to be weighted against the concerns
to keep rates for basic telephone service affordable for
residential customers".

112. The issue of the sensitivity analysis was relevant and
warranted the Commission's consideration.

113. The Company requested that the Commission approve (a) a
revision of the tariff structure and (b) authorize the
introduction of a flat rate/usage based charging scheme. In
revising a tariff charging scheme, the Commission is duty bound
to ensure that it produces fair and reasonable rates. Therefore
the question of affordability of the new rates generated by the
revised tariff structure becomes germane and has to be
considered.

The Company on day 23 at lines 1266 to 1301 of the transcript
itself raised the issue of affordability as one of the
considerations in the design of a rate structure.

114. This case is therefore distinguishable from previous rate
cases in that the application before the Commission was twofold,
for a charge in rate and a change in tariff structure. This was
not the case in the previous applications before the Public
Utilities Board.

115. In the absence of other information to verify the
appropriateness of the new tariff, the Commission would have
found valuable the Company's presentation of a marginal cost
study or sensitivity analysis.

116. The information list at Rule 60 of the Utilities Regulation
Act Procedural Rules does not envisage or relate to a revision
in a tariff structure merely to an application for an adjustment
in rates and even being so applicable was not exhaustive. While
there was no legal obligation, the burden of proof was on the
Company. The Company must submit the evidence that would support
its case. The Commission therefore finds that on a prima facie
basis the Commission has not established any ground for review.

Ground 11, 15 of the Motion for Review

The Company argues that the Commission excluded legitimate costs
from the Company's revenue requirements without valid
justification for exclusion namely deferred taxes and rate case
expenses.

Deferred Taxes

117. The Commission is of the view that there must be a
distinction between a request for information and acceptance of
specific information. While the Commission acknowledges that
this information was specifically requested, the Commission
indicated at the onset of the Hearing (Day 9, lines 81-85) that
"For the avoidance of any doubt the Commission would like to
make it abundantly clear that the Company must establish the
Company's entitlement for deferred taxes as a legitimate and
reasonable cost of service for this Application."

118. In addition the Utilities Regulations Act Procedural Rules
are designed to cater to a variety of utilities namely; water,
telecommunications, gas, sewage and electricity. The Commission
must take the specifics of the particular utility into
consideration when determining which items the utilities have
proven are applicable as relevant costs incurred in the
provision of the service.

119. The evidence did not support the inclusion of deferred tax
as legitimate expense and accordingly the Commission did not
then proceed to analyze or examine the amount presented by the
Company. The Commission is of the view that it is not an
accepted regulatory principle that deferred taxes are
automatically included in the cost of service of a utility.

120. No additional evidence has been presented at this hearing
and the Commission finds that on a prima facie basis that a
ground for review has not been established.

Rate Case Expenses

121. The Commission has a duty to ensure that rate case expenses
were fair and reasonably incurred in the provision of domestic
service. Although requested by the Commission, the Company did
not present any supporting invoices or other information on the
details of the expenses.

122. A breakdown of the rate case expenses was specifically
requested by the Commission on day 5 lines 1021 - 1026 and was
promised by Mr. Shorey at line 1048 - 1057. However, his
supplementary affidavit at paragraph 13 and 14 provided no
breakdown, merely a cumulative figure together with a historical
recitation of the rate case allowances applied for rate cases
from 1972 through 1998.

123. The Commission is of the view that it did not ignore
important regulatory principles by denying the Company any rate
case expenses.

124. In this review hearing the Company has not presented any
evidence or sought to identify for the benefit of the Commission
where in the evidence the information which shows the Commission
fell into error lies. The Commission is therefore left with no
alternative but to reject this ground as it was not provided
with sufficient evidence to justify on a prima facie basis that
an error occurred in law or in fact.

Ground 12 of the Motion for Review

The Company argues that the Commission erred in law and in fact
in considering the effect of CPE, and that CPE is irrelevant to
the determination of the application.

Customer Premises Equipment (CPE)

125. The evidence of the Company's witness Mr. David Shorey was
that the CPE was included in the rate base. In his evidence he
noted that CPE was deregulated in October 2003 (day 4 pages 135
-136). The deregulation of CPE meant that the Company would no
longer be receiving regulated revenue from the rental of CPE or
incurring regulated costs related to its provision of CPE. This
removal of CPE from the regulatory services would affect the
Revenue requirement of the domestic service.

126. While the Company has expressed its dissatisfaction with
this Commission's finding it has not raised or established even
on a prima facie basis that the Commission's finding amounted to
an error of fact or law or that it raised an important matter of
principle.

Ground 7 & 18 of the Motion for Review

The Company argues that the Commission misunderstood or
misapplied certain aspects of the law relating to the Revenue
Apportionment Order and section 15 (3) of the Utilities
Regulation Act.

Revenue Apportionment Order

127. There are a number of carriers providing and expected to
provide national or local telecommunications services and or
international and external telecommunications. The terms cannot
at present be uniquely attributed to C&W (Barbados) Ltd.

128. The revenue apportionment order was established in a
monopoly telecommunications environment where Cable & Wireless
was the only provider of national and external
telecommunications. The Telecommunications Act section 114 (3)
specifically provides that if the Barbados Revenue Apportionment
Order 1989 is inconsistent with the Act it will not survive.

129. With the amalgamation of the companies, CWBET and CWBARTEL,
the continuation of the revenue apportionment order would amount
to the Company being ordered to make a paper transfer from one
cost center to another within a single Company, and being
directed to carry out a mere accounting reporting function vis a
vis revenue.

130. Having considered all of the relevant legislation and the
regulatory environment in Barbados, the Commission considered
that its interpretation as stated in the Decision is correct.
The Commission rejects this matter as a ground for review as it
has not been shown on a prima facie basis that the Commission
has erred in its finding in law or fact or that it can be
considered that the Commission established an important matter
of principle.

Section 15(3) - Ability of a second rate review within a year

131. If the original hearing had resulted in the Commission
setting rates which were to be effective for a fixed period then
section 15(3) would not permit a review.

132. The Commission acknowledges there would be no contravention
of the legislation if rates were not set to apply for a specific
period. However having rejected the proposed tariff structure
because of other shortcomings the Commission is of the view that
this misstatement was not material to its decision and would not
cause it to vary its decision.

PART V - THE COMMISSION'S RULING

133. The Motion for Review has 28 grounds or `reasons for
review' however, the Commission finds that many of the reasons
are redundant, while others can be categorized as being no more
than complaints or requests. Much of the Company's written
submission attempts to reassert its arguments presented at the
original hearing, which were fully considered by the Commission
in reaching its decision.

134. The Commission is of the view that the Motion as presented
and the arguments do not even support a review on a prima facie
basis, nevertheless having the full submissions before it the
Commission sought to give full consideration to them.

135. The Commission generally considered the existence of an
alleged error or the important principle being raised by the
decision to be unsubstantiated on a prima facie basis for the
following reasons which are summarized below:

- Alleged errors were not adequately demonstrated or specified
by reference to evidence to allow them to be assessed by the
Commission.

- Allegations of error were not substantiated by the evidence on
the record of the original hearing.

- The arguments were previously fully canvassed during the
original hearing and were considered by the Commission in
reaching its decision.

- The burden of proof throughout was on the Company. It is not
the responsibility of the Commission to request additional
information ad infinitum.

- Specific data elements critical to the application requested
by the Commission were not provided and were deemed relevant by
the Commission.

- Arguments presented were inconsistent and seemingly
contradictory with respect to the nature and extent of its
application.

136. For the reasons expressed in this decision the Commission
therefore finds that the Company has not demonstrated that
errors of fact or law exist or that the decision raises
important principles even on a prima facie basis. The sole error
which was acknowledged by the Commission was not significant
enough to merit a variation or rescission of the decision.
Accordingly the Motion for review is denied.

DATED this 17th day of January 2005

Original signed by

Mrs. Vivian-Anne Gittens
Chairman of Panel

Original signed by

Professor Andrew Downes
Commissioner

Original signed by

Mr. Gregory Hazzard
Commissioner



=============
B O L I V I A
=============

AGUAS DEL ILLIMANI: Bond Rating Trend Falls
-------------------------------------------
The Bolivian arm of Fitch Ratings changed its rating trend on
the bonds issued by local water concessionaire Aguas del
Illimani to negative from stable.

The action, according to Business News Americas, follows the
government's decision to revoke the utility's concession
contract.

Fitch will finalize its Illimani bond rating once Bolivia's
government makes official the concession cancellation.

The government decided to cancel the utility contract earlier
this month after El Alto protestors caused citywide strikes and
argued among other things that Illimani had not extended
services to a sufficient number of residents. According to the
original concession guidelines, Bolivia will have to pay
Illimani the net value of its fixed assets upon contract
cancellation.

French water company Suez holds a 55.5% controlling share in
Illimani, which served more than 230,000 residents in cities La
Paz and El Alto.



===================================
D O M I N I C A N   R E P U B L I C
===================================

AES DOMINICANA/CDEEE: Arbitration Commission Impedes Debt Talks
---------------------------------------------------------------
Discussions leading to a consolidation of the debts between
Dominican Republic power distributor AES Dominicana and state
power company CDEEE suffered a setback because of an arbitration
commission, which was set up for this very purpose, reports DR1
Daily News.

The said commission is headed by Jose Luis Moreno San Juan, a
prominent writer on energy issues. An unnamed source said that
delaying tactics by the commission have made the conclusion of
the talks impossible. Moreno San Juan has attacked the
government measures as being "too short term."

The latest figures show that AES Dominicana is owed US$50
million for electricity subsidies for the poorest neighborhoods,
and government institutions that receive constant power supply.


* DOMINICAN REPUBLIC: Reschedules Debt With Paris Club
------------------------------------------------------
The Paris Club of nations has agreed to a rescheduling of the
Dominican Republic's outstanding debt, paving the way for an IMF
agreement to move forward without further difficulties.

Citing Finance Minister Vicente Bengoa, DR1 Daily News reports
that the rescheduling frees the country from an immediate
payment of US$193 million that had been due in 2004 and another
US$139 million which was to have been paid during 2005.

Bengoa said that the agreement with the Paris Club takes a lot
of pressure off of the exchange market, since the government
won't have to go after these US$332 million right away.



===========
M E X I C O
===========

EUZKADI: Reopens After Three-Year Closure
-----------------------------------------
A Euzkadi-brand tire factory in the western state of Jalisco,
which was shuttered in 2001 due to labor problems, has been
reopened, the Associated Press reports.

Mexican President Vicente Fox commended the reopening of what is
now known as the Western Tire Corporation El Salto Tire Factory.
Fox said the plant demonstrated that "today we have new forms of
solving conflicts, inclusive and participatory forms, now we
listen and dialogue and reach solutions that benefit everybody."

The factory had been operated by the Hulera Euzkadi subsidiary
and at its peak employed 1,164 people. Hulera was forced to
close the plant because unions had blocked efforts to implement
international productivity standards.

At the time of its closure, about 360 workers accepted severance
packages. However, more than 600 other Euzkadi workers had
picketed the plant and filed lawsuits, demanding severance and
other payments.

With the coordination of the Mexican government and a group of
Mexican private investors, the plant was reopened, and the
former owners - German tire-maker Continental AG - signed over
part of the installations to settle claims, a Labor Department
spokesman said. Those installations are estimated to be worth
around US$80 million.


GRUPO ELEKTRA: To Pay Less than MXP500th for MNB Detroit Note
-------------------------------------------------------------
Grupo Elektra S.A. de C.V. (BMV: ELEKTRA; NYSE: EKT; Latibex:
XEKT), Latin America's leading specialty retailer, consumer
finance and banking services company, clarifies a press note
published Monday.

Elektra Mexicana, S.A. de C.V., a subsidiary of Grupo Elektra,
S.A. de C.V., will pay less than Ps. 500,000 (Ps. 444,251.25) to
Manufacturers National Bank of Detroit (part of Comerica Bank
today) for a promissory note dated 1982 according to a
definitive suspension of payments court proceeding. However, the
final amount to be paid from the accrued interests during a
three-month period of 1983 is still pending a court injunction.

Grupo Elektra is Latin America's leading specialty retailer,
consumer finance and banking services company. Grupo Elektra
sells retail goods and services through its Elektra, Salinas y
Rocha, Bodega de Remates and Elektricity stores and over the
Internet. The Group operates more than 1,000 stores in Mexico,
Guatemala, Honduras and Peru. Grupo Elektra also sells and
markets its consumer finance, banking and financial products and
services through its Banco Azteca branches located within its
stores and in other channels. Banking and financial services
include consumer credit, personal loans, money transfers,
extended warranties, savings accounts, term deposits, pension-
fund management and insurance.

CONTACT: Investor and Press Inquiries:
         Mr. Esteban Galindez, CFA
         Director of Finance & IR
         Grupo Elektra, S.A. de C.V.
         Phone: +52 (55) 1720-7819
         Fax. +52 (55) 1720-7822
         E-mail: egalindez@elektra.com.mx

         Mr. Rolando Villarreal S.
         Head of Investor Relations
         Grupo Elektra S.A. de C.V.
         Phone: +52 (55) 1720-7819
         Fax. +52 (55) 1720-7822
         E-mail: rvillarreal@elektra.com.mx

         Ms. Samantha Pescador
         Investor Relations
         Grupo Elektra S.A. de C.V.
         Phone: +52 (55) 1720-7819
         Fax. +52 (55) 1720-7822
         E-mail: spescador@elektra.com.mx

         Web site: http://www.grupoelektra.com.mx



=================================
T R I N I D A D   &   T O B A G O
=================================

NWRHA: Minister Denies Having Contract With Eastman
---------------------------------------------------
Contradicting recent media reports, Trinidad Health Minister
John Rahael said that the Northwest Regional Health Authority
(NWRHA) has no contract with recruitment institution Eastman and
Associates.

The Trinidad Express reports that Gloria Eastman, the entity's
managing director, also denied the reports, saying her firm had
no official contractual agreement with the NWRHA. She recalled
that as far back as 1999, the NWRHA has been requesting
assistance from her firm in identifying suitable candidates for
filling of vacancies in the organization.

She added that in keeping with well-established procedures "we
have at all times responded by submitting to the NWRHA lists of
names and resumes of highly professional individuals from whom
selections could be made".

Eastman added that this was done "even before the appointment of
the current chairman".

Eastman said the most recent request was made on July 28 last
year and it was the only request received during the term of the
current chairman.

"Our responses are made on the clear understanding that
institutions are under no obligation to recruit any individual
whose names and resume we present for consideration."

The Eastman executive said "as one of the highly regarded
recruitment institutions in Trinidad and Tobago, for the past 28
years, we will continue to service our clients with
professionalism and dignity and with the highest regard for
ethical standards and practices befitting the industry".

Former health minister Dr Hamza Rafeeq quoted from a report of
the Internal Auditor of the NWRHA and said it painted a picture
of corruption, nepotism, favoritism, mismanagement and probably
fraud at the authority.

Rafeeq, who is the MP for Caroni Central, said the report
covered the period June 2002 to June 2004. According to him, the
report stated that the human resource department of the NWRHA
was unable to provide a personnel establishment list.

Rafeeq said the human resource department was also unable to
provide information about where 321 people were working.

"They were being paid but the human resource department could
not determine where these people were working." While the total
number of permanent positions listed on the registrar was 1,690,
the number of people actually being paid was about 4000. "Where
are the other 2,310 people?" he asked. What are their names and
where are they."

Rafeeq said that during his tenure as Health Ministry he
discovered a scam at the NWRHA where a few non-existent doctors
were being paid.  He added that the Fraud Squad was called in
and it did an investigation and the matter is now before the
court.

Rafeeq said a number of unadvertised positions, such as food
service supervisor and special projects officer, have been
filled by one person.

When asked to comment on Health Minster Rahael's statement that
the NWRHA had no contract with Eastman and Associates, Rafeeq
said that was not the issue.

Rafeeq said the issues involve whether or not Eastman and
Associates was hired by the board to do any work at the NWRHA,
whether or not they were hired and paid, and whether or not the
Chairman of the NWRHA, having a beneficial interest in the
Company, was part of the discussion to hire Eastman and
Associates.



=================
V E N E Z U E L A
=================

PDVSA: Plan to Develop Corocoro Oil Field Suffers Setback
---------------------------------------------------------
A conflict has erupted between state-run oil company, Petroleos
de Venezuela SA (PDVSA) and ConocoPhillips, Houston, over a plan
to develop the Corocoro oil field off Venezuela's eastern cost,
reports Dow Jones Newswires.

Drilling was initially set to begin last month but according to
Venezuelan Oil Minister Rafael Ramirez, plans have been put on
hold due to changes in ConocoPhillips' business plan for the
area.

However, sources close to the project say Venezuela is pressing
the Texas-based company to buy more locally produced supplies, a
request the company rejects.

Both parties have expressed willingness to tackle the issues at
hand.


PDVSA: Inks Cooperation Deal With Gazprom
-----------------------------------------
Russian gas giant Gazprom and local oil company PDVSA has formed
an alliance directed at pursuing joint exploration and
production projects as well as locating new export markets, says
Business News Americas.

The two companies signed a memorandum of understanding (MOU)
during a conference in Caracas that outlines the areas of
cooperation in the energy sphere, the exploration and
development of gas fields, development of oil and gas transport
infrastructure, gasification, processing of natural gas, the use
of new technology, and the training and preparation of staff.

While details regarding the projects to be undertaken have not
yet been revealed, reports say that PDVSA and Gazprom will
create a committee to study future joint projects.  



                            ***********


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter - Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick,
Maryland USA. John D. Resnick, Edem Psamathe P. Alfeche and
Lucilo Junior M. Pinili, Editors.

Copyright 2005.  All rights reserved.  ISSN 1529-2746.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
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Information contained herein is obtained from sources believed
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* * * End of Transmission * * *