with the Bermuda Electric Light Company over what the utility will pay for energy generated by the incinerator.

Informed sources indicate, and a Government minister agrees, that the original assertion that Government could sell a million dollars worth of electricity to Belco annually, was little more than wishful thinking.

Our sources, who spoke on condition of anonymity, indicated that the Government's original expectation may have been far too optimistic.

For one thing, a question remains as to the amount and continuity of power supply that the incinerator can generate.

That will be a critical factor, because both sides have already been busily working towards the scheme which has involved major capital costs.

The aim is to get the power from the incinerator onto the Belco grid. But there is still no word from incinerator officials as to exactly when they will be able to get the electricity flowing in any great magnitude.

It is understood that it will not be for quite some time, even though the incinerator has already begun to burn trash.

The current Works and Engineering Minister, the Hon. Leonard Gibbons, conceded, "I would agree that a million dollars was more than a little optimistic.'' In fact, it is believed that the two sides are very far apart in agreeing on a price after weeks of discussions. Mr. Gibbons said that he was not close enough to the negotiations to know many details, and he would not discuss the matter until the talks were concluded.

He did say that the incinerator would not be fully operational until October and he did believe that the plant would be able to produce some electricity for the plant's operation quite soon.

BELCO shareholders were painted a rosy picture at yesterday's AGM of the company's finances, but it is unlikely that there would have been any discussion of these top level talks.

When asked about the state of negotiations, Mr. Garry Madeiros, president and CEO of BELCO, yesterday declined to comment, except to say that talks were continuing.

"I would not like to comment on the state of the negotiations at this time because the talks are still on-going,'' he said. "Obviously the agreement is quite comprehensive. We're not just talking about supplying power when they need it, but also Belco purchasing it.

"There are a lot of technical discussions that are going on apart from the financial talks.'' THE HON. LEONARD GIBBONS -- Initial estimate optimistic.