Natural gas privatized below price: Turkish court

Natural gas privatized below price: Turkish court

Natural gas privatized below price: Turkish court

Ankara’s natural gas grid Başkentgaz was sold to the Torunlar Food Company on Jan 26 for $1.16 million. CİHAN photo

Turkey’s Court of Accounts has ruled that Turkey’s second largest natural gas grid, Başkentgaz, was privatized for below its value.

After three unsuccessful tender attempts and a number of regulations to enhance the allure of Ankara’s natural gas grid Başkentgaz, the Torunlar Food Company won the tender on Jan. 26, 2013 with a $1.16 million offer.

The report prepared by the court criticized this amount as too low and said that not all details had been added to the value of the asset.

The report said a protocol issued in 2010 had increased the company’s gas transportation potential by around 2 billion cubic meters in a year. This was because of the transferring of the operational rights of some facilities that used to be owned by the Turkish state pipeline company, Botaş.

The court also argued that a legal change introduced in November 2012 had extended the borders of the metropolitan municipality, increasing the grid’s subscriber numbers and likely increasing its revenues as well.

“Thanks to this regulation, the buyer company has earned a significant income advantage both because of the rise in subscriber numbers and the gas demand of industrial facilities located in these districts,” the report read.

Prime Minister Recep Tayyip Erdoğan had previously also criticized the $1.16 million Başkentgaz privatization amount, along with the privatization of Turkey’s toll roads and bridges for a record bid of $5.72 billion. Despite the toll and bridges tender being cancelled following Erdoğan’s remarks, the Privatization Administration ruled that there was no problem with the Başkentgaz sale.

Aziz Torun, the director of the executive board of Torunlar Food Company, had said at the time that the company’s offer was higher than their expectations.