Government yesterday warned Bermuda businesses which have not yet addressed the "Millennium Bug'' problem, that they may be ill-prepared to deal with the fall-out of non-compliancy at the turn of the century.

The Finance Ministry has assembled representatives of two Bermuda banks and two utilities who can provide informal guidance to Bermuda firms who may be behind the eight ball in preparing their computer systems for the year 2000.

In Bermuda and around the world, it is anticipated that many companies will not be completely ready at the appointed time, especially because many have not yet begun to even consider the problem.

Finance Minister Grant Gibbons said, "Government and business leaders feel there are some who are not giving this issue the seriousness that it deserves.

To some degree, Bermuda is in competition to provide services on a global basis.

"As a country, we have to take this seriously because it could affect our global reputation. There is a whole spread of services here, which outside people are dependent upon for business.

"These representative companies are trying to make it clear the extent to which they are seeking to be 2000 compliant, and we hope that others will be prepared to take a closer look at their own situation, if they are not already doing so.'' The representatives were at a Cabinet Office media briefing yesterday to express that concern, as Government outlined its moves to put its own systems in order.

Globally, firms that use computers for anything from operating elevators and security systems to information processing, have been preparing those systems for the start of the new millennium.

The original computer method of encoding dates used a two-digit system instead of a four digit code (97 instead of 1997) and there remains considerable uncertainty as to what those computers will do when the century expires.

It has been hypothesised that computers may "think'' that the year is 1900, instead of 2000, and it is believed that some systems may malfunction, or not function at all. Testing has already proved that some systems will cease to function.

Computer buffs tracking the issue believe that while many companies will fix the obvious, such as their information systems and computerised machinery, many will forget to get the problem corrected in the more mundane systems such as elevators, lighting systems, etc.

Technology is so pervasive in the operation of companies and in the lives of individuals that it is easy to forget that computer systems are the reason traffic lights turn from green to red and ATMs provide instant ready cash.

Many Bermuda companies that are heavily systems-dependent have budgeted substantial sums toward making their systems compliant.

Major companies, including Belco Holdings Ltd., The Bermuda Telephone Co.

Ltd., the Bank of Butterfield and the Bank of Bermuda, have long been engrossed in the task of ensuring that non of their major systems will be exposed to the potentially crippling problem.

Leading local and international companies have been at the forefront of preparing systems for the turn of the century.

But even executive vice president, systems and operations of the Bank of Bermuda, Peter Le Noury, conceded, "I would be the first, most surprised person if my bank doesn't have a problem.'' The chances of missing some non-compliant aspect of systems which are as diverse and complicated as those in a bank, are in fact considered to be high.

The issue for such firms is to reduce, as much as possible, their exposure so that any problems that should be identified at the turn of the century will not have a catastrophic effect.

Belco's team leader Donna Watson and Bank of Butterfield's senior vice president for information systems William Francis gave assurances that testing and corrective measures for key firms, like their's, have long been in hand.

But the telephone company's development manager for information systems, David Bedard, noted that procrastination on this issue is not an option.

He said, "Businesses are probably run very much like our own personal lives.

We write a list of five things to do. But we never get passed number two.

"If people haven't listed this problem for their business in the top two, they are in trouble, because they won't get to it.'' Dr. Gibbons said, "Within our own computer systems, Government has been working for some time to fix the problem to avoid consequences of computer or software failure. A working committee was set up over a year ago to meet the challenge in a cost effective way and to ensure uninterrupted service to the public.''