Gems on custom dir are ignored

Hi:

Im working on my hosting linux platform and Im trying to use custom gems
not that default installed on /usr/lib/ruby/gems/1.8
I installed gems on $HOME/apps/lib/gems/1.8
I export:
export GEM_HOME=$HOME/apps/lib/gems/1.8
export GEM_PATH=$HOME/apps/lib/gems/1.8

I got rails 1.1.2

rails -v shows
Rails 1.1.2

but on a page using dispatch.rb I got
/usr/local/lib/ruby/gems/1.8/gems/activerecord-1.14.1/lib/active_record/connection_adapters/abstract_adapter.rb:120:in
`log’

this shows that the default gem path is used.

I dont know where to specify the paths for gems

thanks