Bloomberg News

Turkey Delays Sale of Bosporus Bridges, Roads for Third Time

June 22, 2012

Turkey delayed the sale of 25-year operating rights for toll roads and two bridges over the Bosporus a third time amid a decline in the availability of international finance.

The auction for the Bosporus and Fatih Sultan Mehmet bridges and the eight toll roads was postponed to Oct. 31 from Aug. 9, an official of the asset sales agency in Ankara said by telephone today on the usual condition of anonymity. The assets were first put on sale in August last year.

Prime Minister Recep Tayyip Erdogan won re-election last year pledging to propel Turkey’s $772 billion economy to one of the 10 largest in the world by 2023 with the help of at least $20 billion of construction projects. Loans for Turkish constructors this year tumbled by more than a third from the same period of 2011, according to data compiled by Bloomberg.

Banks in Turkey are unable to plug the financing gap for the projects as European lenders pull back to strengthen balance sheets threatened by the region’s debt crisis, Michael Davey, head of the European Bank for Reconstruction and Development in Turkey, said in an interview on May 18.

Koc Holding AS (KCHOL), Turkey’s biggest group of companies, Malaysia’s UEM Group Bhd, Autostrade per l’Italia SpA and Akfen Holding AS (AKFEN) were among companies planning bids for the bridges and 2,000 kilometers (1,200 miles) of highways, according to stock exchange filings made in October and November last year.

Other projects facing possible delays include a canal project announced by Erdogan before a general election in June last year that will cost at least $12 billion and link the Aegean Sea and Black Sea.

Astaldi SpA (AST) is also seeking finance for a $6.5 billion motorway stretching from near Istanbul 421 kilometers (262 miles) south to the city of Izmir. A planned tunnel under the Bosporus may cost as much as $1.4 billion, according to EBRD estimates.

Astaldi also won a contract to build and operate a third Bosporus bridge at a construction cost of about $2.5 billion, Transport Minister Binali Yildirim said on May 29.

To contact the reporters on this story: Ali Berat Meric in Ankara at americ@bloomberg.net; Mark Bentley in Istanbul at mbentley3@bloomberg.net

To contact the editor responsible for this story: Riad Hamade at rhamade@bloomberg.net


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