Role of Turkish contractors in new Russia

I had the opportunity to attend the St. Petersburg International Economic Forum for the first time and, of course, I did not miss Russian President Vladimir Putin’s speech he delivered just back from his China trip. 

The forum, launched with the Davos model, which Russia started 18 years ago to attract particularly foreign investors, focused on the energy issue, but it is not an exaggeration to say Putin’s speech was the signature of the event. Putin mentioned a “new” Russia that is changing, talked about new cooperation and frequently charged on the West; these discourses had interesting similarities to those of Prime Minister Recep Tayyip Erdoğan.

Putin was talking with the comfort of his newly signed $400 billion gas deal with China. He said the Western sanctions imposed because of the Ukraine crisis would create a “boomerang” effect.
While listening to him I noticed another similarity with Erdoğan: the outburst of self-confidence.

On my way back to Istanbul, while I was reading S. Petersburg Times, I noticed yet another similarity with surprise: The passion for “mega projects.”

It seems that Russia, which is expected to grow only 0.4 percent in 2014, has all of its hopes on “mega projects.”

In the past two years, Russia has invested $75 billion in mega projects and it is expected to allocate another $90 billion in the next six years.

While talking about a Russia undergoing change, one should absolutely mention Turkish contractors.
I had an opportunity to talk to the boss of Rönesans Holding, Erman Ilıcak, Ph.D., at St. Petersburg. He leads among foreign contractors operating in Russia.

In 1993, while he was 26-years-old, with $30,000 of capital, he formed Rönesans Construction in St. Petersburg when no foreign contractors were present then. He has ever since completed many important projects in the capital of Czarist Russia. Some of them are “Renaissance Pravda Business Center,” “Europolis Shopping Center,” “Galleria Shopping Center” and “Trinity Business Center.”

Ilıcak is building hotel, residence and office projects in St. Petersburg and he has recently laid the foundation of an industrial park, Kola Industry Zone.

Different from the Turkish contractor firms that entered the Russian markets at the end of 1980s, Ilıcak is working with the private sector, not the public sector.

He is serving the needs of a growing middle class. For this reason, he is one of the important actors in Russia’s changes.

Ilıcak who is also building offices, homes and a mall in Moscow has $2 billion of turnover and 25,000 employees. He knows many of the Russian oligarchs very well and has set up partnerships with them.
He told me it was not easy to work with the Russians first, “Establishing trust is the most important thing of all. Once the Russians trust you, they will never give up on you.”

According to the International Transparency Organization, Russia is 127th among 175 countries. It ranks 92nd in the World Bank’s “Ease of Doing Business Index.”

Despite this, in the eyes of Dr. Ilıcak, Russia is a country offering serious opportunities in every field for the Turkish business world.

If the head of Rönesans Holding, which was able to take 64th place among the biggest 100 contracting firms in the world according to 2013 data says so, then one should take note, I guess.