Turkish construction companies facing ‘hurdles, cancelations’ in new projects in Russia

ISTANBUL - Reuters

Kunstevo Plaza, a shopping mall in Moscow, built by Turkish construction conglomerate Enka. Cihan Photo

Turkish construction companies operating in Russia are facing several difficulties, including additional financial audits or cancelations in new projects, amid Ankara’s ongoing diplomatic crisis with Moscow, Turkish Contractors Association (TMB) head Mithat Yenigün has said. 

Russia has announced a raft of economic sanctions against Turkey after the Russian jet was shot down by Turkey on Nov. 24. Moscow has banned agricultural product and fresh fruit and vegetable imports from Turkey and discouraged the flow of Russian tourists into Turkey. Russian officials have also said they will reconsider a number of significant projects planned or already underway between the two countries. 

The construction sector is considered one of the potentially worst affected sectors due to the diplomatic crisis between Turkey and Russia. Yenigün said the effects are already being felt. 

“In our continuous contacts with the Economy Ministry and the Trade Undersecretary of Turkey’s Embassy in Moscow, we have learned that several identity and visa controls have been conducted at many construction sites in Russia, many companies have been visited by the authorities for financial audits, several new projects have been halted, additional controls have been put on the Turkish goods at Russian customs, and other transactions have been rolled back,” he said. 

Some Turkish companies active in the region have also said their staff information has been demanded by the Russian authorities, although they have not seen any extraordinary measure yet, he added. 

Yenigün noted that TMB members have been monitoring the economic measures announced by Russia in a “concerned manner,” but said there has been no official contact with the Turkish companies from the Russian side so far.
 
There are currently around 10,000 Turkish employees working on construction projects in Russia, according to TMB data. Turkish companies undertook a total of 47 projects in the Russian Federation in 2014, worth over $3.9 billion. Eight projects worth $2.3 billion have been undertaken in the first nine months of this year, said Yenigün. 

Turkish companies have carried out a total of 1,920 projects in the Russian Federation since 1988 worth more than $62 billion, according to TMB data. Russia ranked first in the list of largest recipients of Turkish construction projects with its share at 19.4 percent.