For my readers not too familiar with Turkey, TOKİ is not Loki’s little brother. It is theacronym by which the state-run Housing Development Administration is knownamong Turks.
I started contacting folks in construction as wellas financial analysts covering the sector on Wednesday, when I decided to writeabout TOKİ. By the end of the day, I was feeling like a high school geeksearching for a prom-night date after getting rejected by nearly a dozen peopledespite explaining to everyone that the column was not about the fivepeople recently killed in a flood, trapped in housing complexes built bythe agency near a river bank.
Those I contacted by email wrote me back, as if oncue, that TOKİ was implementing a successful urbanization model copied by othercountries. I don’t blame them: If there is someone they should not piss off, itis TOKİ. Just as Loki is a jötunn,a frost giant, the agency is a behemoth: It has built 550,176 residential unitssince 2003, during which time around 6 million occupancy permits were granted.
It is difficult to gauge TOKİ’s performance: Otherthan a few numbers from 2008 and 2009 reported in their 2010/2011corporate profile, there is no data. My email request for some figures wentunanswered. Moody’s and Fitch, which rate TOKİ, were equally quiet. This is notsurprising, as the agency reports only to the prime minister. I have been toldthat they thought about borrowing from the World Bank a few years ago, butcould not satisfy the bank’s corporate governance standards.
But I certainly don’t doubt that they are doingvery well. After all, they can develop land held by the Treasury and have thepower to modify zoningplans when necessary. I am sure I could approach their 2008 net income of1.8 billion liras without leaving my office in Marmaris had I so much power.
Writing in Turkish daily Radikal, fellow Daily Newscolumnist Güven Sak argues that theagency’s impact on the economy may be even bigger. He notes that, because TOKİis so big, many local construction companies have essentially become itssubcontractors. Those that could not had to try their luck in internationalmarkets, but without a domestic base, they too ended up being subcontractors.
My sources have told me that TOKİ has indeedcreated its own ecosystem by working with its own “preferred” subcontractors. Someof its tenders are not public, with only a “select few” invited to bid. And itis known to cancel projects or file complaints with prosecutors at a whim. Manycontractors have been banned from public procurement as a result. So maybe TOKİis crafty Loki’s brother, after all.
I pushed this narrative further by looking at thelist of companiesthat have completed TOKİ contracts, which is surprisingly on the agency’swebsite, at least for now. Out of the 20 random companies whose records Ipulled from the TradeRegistry Gazette and the relevant chambers of commerce, only two wereregistered before 2002, when the ruling Justice and Development Party came intopower.
For those of you wondering about the source ofmoney for the SUVs driven by covered ladies, a common sight in Istanbul thesedays, this might provide a clue.