Prime Minister Recep Tayyip Erdogan, despite the economic turmoil surrounding Turkey, introduced as a crazy project, which will cost a billion dollars 10 Channel Istanbul project is going to continue? The ır official una response is ambiguous, but according to economists, the project, which ties the Black Sea and Marmara seas as an alternative, believes that an unlimited postponement of the project is inevitable.
According to government officials, the Kanal Istanbul Project aims to reduce the security risks for Istanbul by redirecting traffic from the Bosphorus in Istanbul, which contributes to economic growth. Since the day he launched the project prior to the 2011 general elections, Erdogan has been under fire for fear of major environmental damage.
According to the plan, the canal will be the island in the European side of Istanbul starting from the Durusu to the Black Sea coast, then slightly southeast belt before connecting to the Sea of Marmara in Kucukcekmece, 43 kilometers (26.7 miles) long, 100 meters (328 fit) wide and 25 meters (82 fit).
Those who oppose the project, the channel is only the Black and Marmara seas would not also cause serious damage to the northern Aegean Sea ecosystem, would greet the water resources Istanbul and a major environmental disaster triggered, it argues that 310 million people affected in Turkey.
In his speech in 18 August, Erdogan said, oğ We will give a big message to the world with Kanal Istanbul. This strategic project will be Turkey's largest investment is definitely going to implement, "he said. In the following days, the picture of the economic crisis has become sharper, and the project will be postponed as part of austerity measures.
More than two months after that, Erdoğan did not mention the Kanal Istanbul project again. Nevertheless, the Minister of Environment and Urbanization, Murat Kurucu 15, said in September that the 10 billion-dollar Istanbul canal project is Yine continuing Yine. Considering that Erdogan frequently conflicts with his ministers, his statement should not be regarded as binding for Erdoğan.
Five days later, the Treasury and Finance Minister Berat Albayrak, the son-in-law of Erdoğan, released the dam New Economic Program m, which, despite the assurances of the Agency, was awakened by 2019-2021. ”While the program stated that finans it has not been tendered or tender yet, but has not yet been suspended. Veya Mega infrastructure projects will be realized through international funding. Program
The explanation led to confusion about Kanal Istanbul. The project does not even have a tender report. However, it is also a real “mega infrastructure project Ancak which cannot be realized with altyapı foreign direct investment and international financing Ancak. So in which category is the project falling? Will it be shelved because it has not yet been tendered or will continue international financing?
Yaman Toruner, a former governor of the Central Bank and now a columnist for the Milliyet newspaper near the government, wrote in September that Kanal Istanbul was shelved for three years and did not object to the claims of government officials or pro-government media. .
According to Esen Çağlar, an economics analyst and managing partner in the Policy Laboratory, a consultancy and thought based in Ankara is the yer decline in real prices in the current crisis environment yer and the obligation to suspend. Hakkında This project is not a waterway, it's about land development. This became clear in front of the 2011 elections. 2011 years, where the interest rate is the lowest globally and at a time when Turkey's real estate sector, based on the fundamentals of economic policy. The global crisis decreased and liquidity was abundant. "
Since Çağlar promised more profits in a shorter time than the industrial investment of the real estate, because of the depletion of land development in Istanbul, Ankara thought that gelişim something like this would reveal great construction projects about its environment gayrimenkul.
Recalling that the project emerged in a construction craze, kabar In the years of real estate bubbles budding, such projects seem logical. But now - how bad will it be? [Sector] may drop faster than the economy. In July-September period, real estate prices in Istanbul fell by 28 in dollar terms. Looking at the average prices in projects such as Kanal Istanbul, foreign investors will not see the price increase as before. Housing prices may continue to fall for a while. Interest rates are very high and housing prices fall, so there is a risk of non-profit. It's not against economic logic. "
And what will be the chance of international creditors who finance the project?
Teneo Wolfango Piccoli, London-based Intelligence Coordinator, "In spite of possible loan guarantees from the Turkish treasury, the new megaproje in the country will be a real challenge for Turkey to find international lenders who want to invest money. Already forced - Istanbul no new airport that the financing of foreign debt - and deteriorating external backdrop for emerging markets and the increasing difficulties faced by Turkey Given the economy, is almost impossible. This would be particularly true for projects such as Kanal Istanbul, which discusses environmental reasons and does not have a clear economic logic. "
Rafet Gürkaynak economics professor at Ankara's Bilkent University, stressed the donor of foreign debt liabilities that came to Turkey as an unreliable borrower Although not particularly high rate of GDP. "This, we see Turkey in January could charge interest rates denominated in foreign currencies with 5%, while the ratio of debt today can only take 7,5%. The market does not want to lend at lower rates, Piyasa he said.
Gürkaynak will put a burden on public finance sooner or later, arguing that Ankara generally lies in the feasibility of infrastructure projects. . If you can't finance a project yourself, you said to an investor, üp You borrow the money and do the job and guarantee income “. The creditors of the investors are the same creditors who lend to the Turkish state. When you give a guarantee of income, you have to pay them. Your commitment to payment must be reliable so that the investor can trust and finance the project. Higher interest rates, shows that Turkey has reduced confidence in the ability to pay. Turkey is seen as a risky borrower. The ability of such projects to finance them, except for the environment, resources or other reasons, is highly doubtful. "
Despite the economic problems, Ankara is not expected to make a rescue agreement with the International Monetary Fund, especially before the local elections in March. Still, some people think they can act after the elections.
What if the government for the Canal Istanbul project goes to the IMF?
Iniz You cannot go to the IMF with such a project. This thing has no economic feasibility. Bu Tır The first thing that the IMF will tell you is to support projects based on economically rational production, not by such things size.
Turkey and the IMF is closely following the chief economist at investment company based in the United States Cem Akyurek, "If staying in Turkey to go to the IMF, budget tightening policies demanded by the IMF will be forced to take into account additional loads. From crisis and public-private partnership projects. When the IMF decides to lend, it begins with the calculation of the debt burden on such treasury. If they continue with Channel Istanbul, this will bring an additional burden on low-income groups, as the IMF pressures for more stringent austerity measures. "
In this way, insistence in Channel Istanbul causes political costs with economic cost.
For Erdoğan, the Kanal Istanbul project is extremely important for its reputation. Although the project is almost completely shelved, it is unlikely to be accepted until the local elections in March, as this would mean the adoption of the economic crisis.
In theory, Erdogan is still able to realize Kanal Istanbul, but a precondition: to find a banker crazy enough to finance his ancak crazy project Te.
Source : I www.egehaber.co