Ankara’s gas grid put on block sale for privatization

Ankara’s gas grid put on block sale for privatization

ANKARA - Anatolia News Agency
Ankara’s gas grid put on block sale for privatization

A worker is seen at a natural gas control centre of Turkey’s BOTAŞ, 35 km west of Ankara. The government has failed to privatize Ankara’s gas grid several times. REUTERS photo

Turkey’s Privatization Administration (ÖİB) placed an ad on its website yesterday for the block sale of the 100 percent public stake in Başkent Doğalgaz, Ankara’s natural gas grid, which has seen multiple privatization failures.

The bidding deadline is Dec. 17, the ad said, adding that the bid security for the tender is $50 million. The document regarding the conditions of contract can be purchased from the ÖİB for 20,000 Turkish Liras. Joint ventures, natural persons and legal persons are allowed to bid. The bids will be submitted via sealed envelopes and the tender will be realized through negotiations and bargaining. An auction may be held if the tender commission deems it necessary.

The central government owns 80 percent of the company, while the rest is owned by the Ankara Municipality. Separate tenders were opened for each of the share blocks, all of which have failed to be finalized.

An omnibus bill that went into effect in July paved the way to put both the share blocks to tender to privatize Ankara’s gas grid.

The first tender was opened in March 2008 by the Ankara Municipality. The highest bid, $1.6 billion, was given by Global Yatırım Energaz, followed by Elektromed. Both companies failed to meet the sale obligations, resulting in the cancelation of the tender.

Then the ÖİB decided to sell 80 percent of the grid. MMEKA, a joint venture of businessmen Mehmet Emin Karamehmet and Mehmet Kazancı, lodged the highest bid with $1.2 billion for 80 percent of the grid in a tender in 2010. But the sale failed again, this time due to disputes that arose between the partners of MMEKA.

Başkent Doğalgaz, which is the second-largest gas company in Turkey, recorded 46.6 million liras of profit and sold 2.3 billion cubic meters of gas last year. The gas distribution license of the company is valid until 2037. It has more than 1.3 million subscribers.