For my readers not too familiar with Turkey, TOKİ is not Loki’s little brother. It is the
acronym by which the state-run Housing Development Administration is known
I started contacting folks in construction as well
as financial analysts covering the sector on Wednesday, when I decided to write
about TOKİ. By the end of the day, I was feeling like a high school geek
searching for a prom-night date after getting rejected by nearly a dozen people
despite explaining to everyone that the column was not about the five
people recently killed in a flood, trapped in housing complexes built by
the agency near a river bank.
Those I contacted by email wrote me back, as if on
cue, that TOKİ was implementing a successful urbanization model copied by other
countries. I don’t blame them: If there is someone they should not piss off, it
is TOKİ. Just as Loki is a jötunn,
a frost giant, the agency is a behemoth: It has built 550,176 residential units
since 2003, during which time around 6 million occupancy permits were granted.
It is difficult to gauge TOKİ’s performance: Other
than a few numbers from 2008 and 2009 reported in their 2010/2011
corporate profile, there is no data. My email request for some figures went
unanswered. Moody’s and Fitch, which rate TOKİ, were equally quiet. This is not
surprising, as the agency reports only to the prime minister. I have been told
that they thought about borrowing from the World Bank a few years ago, but
could not satisfy the bank’s corporate governance standards.
But I certainly don’t doubt that they are doing
very well. After all, they can develop land held by the Treasury and have the
power to modify zoning
plans when necessary. I am sure I could approach their 2008 net income of
1.8 billion liras without leaving my office in Marmaris had I so much power.
Writing in Turkish daily Radikal, fellow Daily News
columnist Güven Sak argues that the
agency’s impact on the economy may be even bigger. He notes that, because TOKİ
is so big, many local construction companies have essentially become its
subcontractors. Those that could not had to try their luck in international
markets, but without a domestic base, they too ended up being subcontractors.
My sources have told me that TOKİ has indeed
created its own ecosystem by working with its own “preferred” subcontractors. Some
of its tenders are not public, with only a “select few” invited to bid. And it
is known to cancel projects or file complaints with prosecutors at a whim. Many
contractors have been banned from public procurement as a result. So maybe TOKİ
is crafty Loki’s brother, after all.
I pushed this narrative further by looking at the
list of companies
that have completed TOKİ contracts, which is surprisingly on the agency’s
website, at least for now. Out of the 20 random companies whose records I
pulled from the Trade
Registry Gazette and the relevant chambers of commerce, only two were
registered before 2002, when the ruling Justice and Development Party came into
For those of you wondering about the source of
money for the SUVs driven by covered ladies, a common sight in Istanbul these
days, this might provide a clue.