...corruption at all levels had left even the IMF without a choice but to turn its back on Georgia. Entering a less than familiar, developing country, AES faced several common types of international risk: obsolescing bargain mechanism, socio-political instability, local preferences & attitudes, and particularly weak and ineffective institutions. They attempted to mitigate these risks initially with contractual demands, and later with PR and a zero tolerance corruption policy. Though AES’s goal was supported by many western entities looking to create greater stability in Georgia for FDI, the only “ally” in Georgia was President Shevardnadze who authorized AES to circumvent a restriction in their contract. Upon entering the country, AES was viewed by the government purely as dollar signs rather than an entity to collaborate with in order to improve the stability of the people and the country long term. The opposition groups were numerous, and included members of the government as well as members of the neighboring Russian government. They opposed AES, for several self-serving reasons ranging from bribes (government officials, meter readers, kerosene monopolists), to weakening the Georgian government to maintain a certain level of influence over a former territory (the Russian government). After leading the bid for AES-Telasi, Scholey knew it was going to be a very difficult road to their goals. However, he didn’t realize just how difficult until actually arriving in country...
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...What were the risks posed by Georgia and what mechanisms did AES use to mitigate these risks? The financial losses of the electricity sector of Georgia totaled between a quarter of a billion and $400 million. The government believed that a private investor could help mitigate the risks and losses for Georgia. One profound problem that needed attention was the delayed maintenance and repairs that the government lacked the capital to undertake. This, in effect, allowed for only 42% available capacity. Another problem was the egregiously low collection rates, which ranged from 20 to 40 percent because most of the population stole electricity using illegal lines. A third problem Georgia had was the rampant corruption in the energy sector. The rate of theft of domestic funds was very high, which as a result left less money for the industry to utilize. One last risk posed by Georgia was their shortage of fuel and the unwillingness of neighboring countries to supply them with it. AES- Telasi decided to implement a two pronged strategy to negate the risks posed by Georgia. The first component was to invest in plant, equipment, and technology to bring the company up to the standard. The single largest expenditure item was imported fuel which was necessary to generate electricity. The new investments helped AES not only to meet financial commitments but it helped generate revenue, improve electricity supply and most importantly helped create goodwill. The employees loved Scholey and...
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... for appropriate behaviour standards are sterner, penalties for international laws and rules offences are severe. Those against this view I perceive are for monopolistic enterprises and purely to gain profits no matter the means. From the Independent Lens website, the documentary film “Power Trip” by Paul Devlin depicts the challenges faced by the AES Corporation, an American energy company, during its attempt to operate an electric company in Tbilisi the capital of the former Soviet Republic of Georgia, a country that offered substantial economic potential. I strongly believe throughout this particularly interesting film there are several management lessons that relate these issues to the legal business environment, and can help me to be more appreciative of the corporate world mechanisms, my co-workers and business associates who are of different countries, culture and political background. AES, headquartered in Arlington Virginia, USA is one of the world’s largest independent energy companies and utilizes competitive supply, growth distribution and ethical management techniques. AES spent $35 million in 1999 to acquire Telasi, Georgia’s privatized power distribution Company which was formerly state-run. Georgia is strategically positioned in the unstable Caucasus region bordered by the Black Sea, Turkey, Armenia, Azerbaijan and the Russian Federation, and at the time of the film, was led by President Edward Shevardnadze. As seen in the film, the country was facing frustrating...
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...Descripción AES Gener S.A. (constituida el 19 de Junio de 1981), es una sociedad anónima abierta cuyas acciones se transan en tres bolsas de valores: Bolsa de Comercio de Santiago, la Bolsa de Valores de Valparaiso y la Bolsa Electrónica de Chile. Gener está orientada fundamentalmente a la generación de electricidad en Chile. Su mayor accionista corresponde a Inversiones Cachagua Limitada con él 70,67% de las acciones. Con su parque generador*, proporciona al Sistema Interconectado Central, SIC, energía eléctrica generada a través de cuatro hidroeléctricas de pasada, dos centrales turbogas a petróleo diesel, todas pertenecientes directamente a Gener. También entrega energía eléctrica al SIC mediante una central de ciclo combinado que opera indistintamente con gas natural o diesel, y una central a diesel, ambas pertenecientes a su filial Sociedad Eléctrica Santiago S.A., y por una central termo eléctrica a carbón, perteneciente a la a la filial Empresa Eléctrica Ventanas S.A. Adicionalmente entre energía eléctrica al SIC a través de una central termoeléctrica a carbón perteneciente a la coligada Empresa Eléctrica Guacolda S.A., que opera cuatro unidades a carbón en la isla Guacolda, en Huasco, Región de Atacama. La compañía también es proveedora de energía eléctrica al Sistema Interconectado del Norte Grande, SNG a través de sus filiales. Adicionalmente a su participación en el sector eléctrico en Chile, AES Gener es productora de energía eléctrica en Colombia a través...
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...GRADUATE SCHOOL OF BUSINESS STANFORD UNIVERSITY S HR-3 FEBRUARY 1997 HUMAN RESOURCES AT THE AES CORPORATION: THE CASE OF THE MISSING DEPARTMENT Dennis Bakke, the CEO of AES, a company that develops, builds and operates electric power plants, sat in his office late in 1996 and thought about the question that was perennially posed to him: could AES, soon to have some 25,000 people located literally all over the world following a recent purchase of power plants in Kazakhstan, continue to operate with virtually no staff functions and, specifically, without any human resource staff anywhere in the corporation? The absence of centralized staff — or, for that matter, much staff at all — had been one of the themes guiding the design and operation of the corporation since its founding. The company, in addition to having no personnel department, had no public relations, legal, environmental, or strategic planning departments. Its chief financial officer, Barry Sharp, saw his job not so much as running a centralized finance function but rather as helping all the AES employees as they made important decisions about financing and investments in a very capital intensive business. But the company was becoming much larger and increasingly geographically dispersed. Perhaps those early decisions needed to be rethought. Could what worked for so long continue to work as the corporation grew and operated increasingly on a global basis? Could the advantages of flexibility and having virtually...
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...Name : Reza Relen Indriyanto NIM : 29110049 RESUME OF HUMAN RESOURCE AT THE AES CORPORATION: THE CASE OF THE MISSING DEPARTMENT From the beginning AES had a strong set of core values and beliefs about people that it worked hard to operational on a continuing a basis, there four values are 1) Integrity 2) Fairness 3) Social responsibility 4) Fun. AES also had a set of core assumptions about people that it tried to use in designing and managing its organization, there are 1)creative 2)responsible 3)fallible 4)Desire to make positive contributions to society, associate with a winner and a cause like a challenge 5) unique person. In fact AES use four measured to assess the company’s performance and progress ; 1) shared values 2) Plant Operations 3) Assets 4) Sales Backlog. AES-Thames had a low turnover as did AES generally, because AES different and special place and people knew it and valued that fact. And when the AES hiring people essentially sought people who would fit with the company, the interviewers typically did not ask technical questions, they believed technical skill could be learned, the questions looked for self-motivated dependable people. Compensations and benefit was determined by looking at what others were being paid, both inside and outside of the company. Information on the performance of the company was widely shared; the measurement philosophy was to focus comparatively more on plant-wide measures of performance. Also the corporation had many conferences...
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...PROLOGUE Fortress of the Light Pedron Niall's aged gaze wandered about his private audience chamber, but dark eyes hazed with thought saw nothing. Tattered wall hangings, once battle banners of the enemies of his youth, faded into dark wood paneling laid over stone walls, thick even here in the heart of the Fortress of the Light. The single chair in the room heavy, high-backed, and almost a throne - was as invisible to him as the few scattered tables that completed the furnishings. Even the white-cloaked man kneeling with barely restrained eagerness on the great sunburst set in the wide planks of the floor had vanished from Niall's mind for the moment, though few would have dismissed him so lightly. Jaret Byar had been given time to wash before being brought to Niall, but both his helmet and his breastplate were dulled from travel and battered from use. Dark, deep-set eyes shone with a feverish, urgent light in a face that seemed to have had every spare scrap of flesh boiled away. He wore no sword - none was allowed in Niall's presence - but he seemed poised on the edge of violence, like a hound awaiting the loosing of the leash. Twin fires on long hearths at either end of the room held off the late winter cold. It was a plain, soldier's room, really, everything well made but nothing extravagant except for the sunburst. Furnishings came to the audience chamber of the Lord Captain Commander of the Children of the Light with the man who rose to the office; the...
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...AES-Telasi: Power Trip or Power Play? (A) It would take too long to explain why there was very little electricity and no heat in Tbilisi in the winter months….The reasons were so intertwined with Georgian networks of “patronage,”, black hole, patchwork, and jerry-rig that it was impossible to separate sabotage (a strange and sudden fire at Gardabani, the country’s only thermal power station) from corruption (the bungling and greedy idiots as SakEnergo, the state energy concern) from non-payment (less than 30 percent of the population in Tbilisi paid their electricity bills; Georgia owed Russia millions in electricity back debts) from theft (part of the copper transmission line between Armenia and Georgia was nicked one winter), from black clan economics (someone had the kerosene trade sewn up; it was in someone’s interest to make sure there was no cheap clean alternative) from incompetence (the next winter the pride of Gardabani’s brand new gleaming Unit 10, repaired with sackfuls of German money, broke down because the engineer on duty didn’t know what to do when a red light on the computerized panel started to blink unexpectedly) from infrastructure deterioration (once the whole of eastern Georgia went black as the 500 kW line from the Enguri hydro plant collapsed under the weight of what one commentator described as “pre-election” abuse) from the oft-repeated worn excuse: “The Soviet Union collapsed; there was a civil war.” —Wendell Steavenson (2002), Stories I Stole (Grove...
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...DESAI Globalizing the Cost of Capital and Capital Budgeting at AES In June 2003, Rob Venerus, director of the newly created Corporate Analysis & Planning group at The AES Corporation, thumbed through the five-inch stack of financial results from subsidiaries and considered the breadth and scale of AES. In the 12 years since it had gone public, AES had become a leading independent supplier of electricity in the world with more than $33 billion in assets stretched across 30 countries and 5 continents. Venerus now faced the daunting task of creating a methodology for calculating costs of capital for valuation and capital budgeting at AES businesses in diverse locations around the world. He would need more than his considerable daily dose of caffeine to point himself in the right direction. Much of AES’s expansion had taken place in developing markets where the unmet demand for energy far exceeded that of more developed countries. By 2000, the majority of AES revenues came from overseas operations; approximately one-third came from South America alone. Once a critical element in its recipe for success, the company’s international exposure hurt AES during the global economic downturn that began in late 2000. A confluence of factors including the devaluation of key South American currencies, adverse changes in energy regulatory environments, and declines in energy commodity prices conspired to weaken cash flow at AES subsidiaries and hinder the company’s ability to service subsidiary...
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