Georgia State Electric System

ESB International undertook a five year turnaround contract to manage Georgian State Electro System Ltd. (GSE), the state owned company responsible for the transmission and dispatch of high voltage power in Georgia. The Georgian electricity network had experienced deteriorating technical condition and reduced reliability caused by a lack of funds for maintenance compounded by a civil war. The turnaround contract involved ESB International taking full executive control of all aspects of the organisation with 4,500 staff, assets of over $300 million and turnover of $50 million. ESB International managed a $56 million investment raised from international funding agencies and fees were directly linked to delivering measurable performance improvements aimed at turning around the underperforming utility.

Services provided by ESB International

Under the terms of the contract ESB International took complete management control of GSE. The services provided included:

• Improving the technical and financial performance of GSE
• Improving efficiency of the transmission and dispatch system
• Improving efficiency of operating facilities, equipment and administrative accountability
• Assuring safe operation and security of the facilities
• Preparing annual operating and investment programmes
• Establishing account for annual emergency measures programme
• Reviewing and revising standard operating procedures

Achievements

ESB International achieved a complete transformation of GSE into a well organised and well managed modern utility. Major improvements to the financial performance and to the dispatch and operational efficiency were achieved. New systems for administration, procurement and maintenance were established. The organisational and human resource management practices of the company were completely overhauled and modern IT systems were introduced.

• Major transmission system projects were executed to international standards
• Transmission systems losses were reduced from 19% to 7%
• Modern financial control systems were implemented which enabled GSE to become the first major Georgian company to produce audited accounts to IFRS standards
• Retail collections outside Tbilisi achieved record high levels
• An automatic frequency protection scheme was introduced to prevent minor faults developing into nationwide blackouts