BUSINESS > Record tender for country's roads and bridges may be canceled

ISTANBUL - Hürriyet Daily News

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A consortium of Koç Holding, Gözde Girişim and Malaysia's UEM Group Berhad won the tender with a record bid of $5.72 billion, the second highest privatization tender in Turkish history.

A consortium of Koç Holding, Gözde Girişim and Malaysia's UEM Group Berhad won the tender with a record bid of $5.72 billion, the second highest privatization tender in Turkish history.

The privatization of Turkey’s toll roads and bridges in a record bid of $5.72 billion, as well as the country’s second largest natural gas grid, Başkent Doğalgaz, in a $1.16 million offer, may be canceled by the government.

“We will review the privatization offers, for example for the highways or bridges. We have much bigger expectations,” Prime Minister Recep Tayyip Erdoğan said in an interview broadcast live the evening of Feb. 1. The tender was the second highest privatization tender in Turkish history.

Erdoğan added that he believed Turkey could see significant funds introduced into the country.
A consortium of Koç Holding, Gözde Girişim and Malaysia’s UEM Group Berhad had won the tender. The tender, which was for a concession period of 25 years, included the Edirne-Istanbul-Ankara highway and the Bosphorus and Fatih Sultan Mehmet bridges linking the European and Asian sides of Istanbul. Official data from the country’s highways agency showed that the toll roads and bridges generated revenue of 740 million Turkish Liras in the first 11 months of the year.

Daily Hürriyet’s economics columnist Erdal Sağlam reported that officials from the general directorate had claimed during a meeting on the privatization process that the tender could be worth “$20 billion.”

Meanwhile, Turkish food company Torunlar Gıda placed a $1.16 million offer for Başkent Doğalgaz. However, Erdoğan mentioned that in the first tender for the grid, Global Investment had failed to pay its offer, $1.6 billion, thus wasting a $50 million guarantee. The controversial Karamehmet-Kazancı partnership also failed to pay the $1.2 billion contract price in another tender, resulting in a loss $107.6 million in guarantee fees. An offer of around $1.5 billion had previously been received, meaning that Torunlar Gıda’s $1.16 billion offer should be reviewed carefully, Erdoğan said.


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mara mcglothin

2/4/2013 5:24:51 PM

Yeah JRC This is business as usual. I guess RTE didn't have a family member prepared to bid yet, but now he does. I have never seen the way Turkish contracts are honored in Turkey. Even a common lease agreement in most of the Malls is a travesty. Nothing is written and signed and then honored. And we wonder why more businesses are not interested in taking part in business in Turkey.

Jinx Star

2/4/2013 6:15:14 AM

Where did you get that he was the 8th richest politician? that's rubbish, baseless accusations, then you wonder why there are media people in custody.

Jinx Star

2/4/2013 6:12:59 AM

The bid is undervalued, apply simple maths and simple business rules. 740m Turkish Liras p.a. x 25 years = 18.5 billion, Long term investment rule of say 10 years, gives you 7.4 billion cost, makes remaining 15 years ears a cool 11.1 billion in profit ... With improving economy, more purchasing power, traffic flows equals higher profits. Yep, I'd say that is responsible government. Good the Government for withdrawing the tender.

cezer "çapulcu" skonore

2/3/2013 10:50:13 PM

Why didn't they start the biding from a more reasonable number at the first place? Or why didn't they cancel it right after? There is a huge difference between 5.72B and 20B. Anyway, the privatization is another name for the process that you give profitable public property to private companies cheaply so that they can accumulate capitol and become competitive against the foreign companies.


2/3/2013 8:59:24 PM

Turkish business practice allows for this. For the uninitiated, it works like this: Decide on a price, agree and accept the deal, see you can/might get more, change the price/cancel the contract.This is well-known among people doing business with Turkey.

Faruk Beisser

2/3/2013 10:53:17 AM

Gülen/Erbakan AKP and its Great Leader apparently are dissatisfied that they did not rip off more from the bidders, even though one of them is a fellow islamist. But then, the coffers must overflow and its no wonder that according to official sources the Great Leader is the 8th richest politician in the world.

Socialist TRK

2/2/2013 8:03:28 PM

No SH Sherlock!! that was an awful price they were offered and were stupid enough to even consider it. Though what can you expect from such a government
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