15 February 2007
Georgia Energy Overhaul Project Wins International Award
Partnership for a Better Life
"We consider the reform of the United Energy Distribution Company to be one of the most -- if not the most -- important successes to date in our energy reform program," said Alexander Khetaguri, Georgia's first deputy minister of fuel and energy.
In 2003, the U.S. Agency for International Development (USAID) began working with the government of Georgia to transform the country's largest state-owned energy utility from a corrupt, inefficient operation into a trusted, efficient company.
In 2006, the effort won the Platinum Award from the Management Consultancies Association, an industry group of management consulting firms in London. An independent panel of business leaders, journalists and academics selected the most innovative and successful projects with which its member firms had worked. The award was given jointly to USAID and the government of Georgia.
The project was part of USAID’s energy security initiative. It included a multiyear management contract for UEDC, Georgia’s largest electric utility. At the time the contract was awarded, the energy company had been notorious for its bloated work force and poor management.
Often braving personal danger, the USAID-financed team battled corruption throughout UEDC and drastically improved its performance.
The company now provides customers with reliable electricity for the first time since Georgia’s independence. It is paying taxes and its foreign energy suppliers in full and has increased employee salaries. It also is investing in improving customer service. Customer payments for electricity have even climbed from as little as 11 percent in 2003 to more than 75 percent in 2006.
"We definitely appreciate the work of the UEDC management team. They took on the challenge of reforming a company that many felt was impossible to turn around," said the Georgian deputy fuel and energy minister.
Although further challenges lie ahead, including the company’s privatization and changes to Georgia’s electricity tariff, the USAID-sponsored team has demonstrated the ability to rebuild a company from the ground up, transforming it from a major cause of the country’s energy instability into a model for reform of state-owned companies.
(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
