Preserving the welfare of Istanbul

26 January 1996

SUPPLYING the teeming metropolis of Istanbul with sufficient water has challenged the city's authorities since ancient times. The impressive Valens aqueduct and Basilica cisterns in the old city attest to the ingenuity of engineers from as far back as the Byzantine era. The challenge has taken on awesome proportions in the second half of the 20th century, however. Rapid population growth, driven by mass migration from the countryside, has stretched both the technical skills and financial resources of the municipality to the limit and water has become a permanent cause for concern.

By the year 2010, Istanbul's population is expected to double in size to around 16 million. The growth is likely to be concentrated in the so-called 'gecekondu', which literally means 'built overnight', the unplanned slums that encircle the city.

Such communities can experience extended water cuts in the hot summer months with all the attendant risks to public health, especially from cholera. Leakage is also an acute problem with about 20 per cent of the water supply draining away through fractured pipes before it ever reaches consumers.

When the Islamist party Refah was swept to power in the municipal elections in March 1994 it owed its success to the solid support of the slum dwellers who were encouraged by the party's pledge to improve public services. One of the most glaring examples of the corruption that Refah was promising to root out was at the Istanbul Water & Sewerage Administration (ISKI). By the time the embezzlement scandal at ISKI was exposed the agency was dangerously short of funds.

Good start The Refah administration headed by mayor Tayip Erdogan is credited with making a good start on the unenviable task of solving the city's water shortages. Heavy rains have helped. By the end of 1995 water in the city's reservoirs had risen to 196.7 million cubic metres (cm), 17.2 per cent higher than a year earlier. Despite the improvement in water stocks the city will still be hard pressed to avoid cuts during the dry summer months.

Plans for the future depend on the success of two major projects on the Yesilcay and Greater Melen rivers which will channel new water supplies into the city. The two schemes, which are supported by the State Hydraulic Works (DSI) and foreign funds, should see the award of construction contracts during 1996.

The first stage of the project will supply 286 million cubic metres a year (cm/y) on completion in 2001. By the time the fourth stage is achieved in 2025 the Greater Melen project is expected to supply a total of 1,180 million cm/y. This should meet the city's needs to 2040.

Initially, the water will be taken from a weir close to the mouth of the Melen river on the Black Sea about 170 kilometres to the east of Istanbul. It will be pumped to a transit reservoir behind the Alacali dam and carried from there to a treatment plant at Cumhuriyet which has a capacity of 700,000 cubic metres a day (cm/d). To reach the city a transmission pipeline will be built from the Cumhuriyet plant to Kagithane on the European side of the city, passing under the Bosporus.

Yesilcay first The Yesilcay project will reach completion well before the Melen project and supplement the bigger scheme, supplying 145 million cm/y to a population of around 1.5 million. The water will be drawn from two separate weirs on the Isakoy and Sungurlu rivers in the Yesilcay region, which is about 60 kilometres to the east of Istanbul. It will then be pumped through a station at Kurfalli to the existing Darlik dam reservoir. From there it will be transported to Emirli, beside the existing Omerli reservoir, where a new treatment plant with a capacity of 600,000 cm/d will be built. The project also provides for an interconnection with the Greater Melen system.

In tandem with these two large state projects the private sector is to build the Izmit water supply project on a 'buildoperate-transfer' (BOT) basis. Around 20 million cm/y of the 142 million cm/y to be generated by the scheme will be supplied via a trunk main to Istanbul.

The project calls for the completion of the Yuvacik dam, a water treatment plant and two pumping stations, together with the laying of a distribution main in Izmit.

The project sponsors are the UK's Thames Water with the local Gama Endustri Tesisleri Imalat & Montaj and Guns Insaat & Muhendislik. Shareholders in the BOT company are Izmit municipality, Thames Water, Gama, Guns, and Mitsui & Company and Sumitomo Corporation of Japan. Construction is projected to take three years, after which the company will operate the project for 15 years, earning its income from the sale of water to the municipality.

External financing is an essential element in both the Greater Melen and Yesilcay schemes.

The foreign exchange component of the Greater Melen's first stage will amount to an estimated $662 million out of a total estimated cost of $1,181 million.

Japan's Overseas Economic Co-operation Fund (OECF) in late 1993 extended the first Y52,473 million ($520 million) tranche of a credit package totalling Y112,100million ($1,120 million).

The funds will carry interest of 3 per cent over 25 years with a seven-year grace period.

Foreign currency outlays will amount to around $168.5 million of the estimated $270 million total cost of the Yesilcay project. In June 1993, the Kuwait Fund for Arab Economic Development ratified a credit agreement to provide an initial $80 million in assistance, rising to an eventual total of $160 million. The credit will be provided at an annual interest rate of 4.5 per cent, with a payback period of 20 years including seven years' grace.

Backed by these funding commitments, the DSI is forging ahead. An award for consultancy services on the Greater Melen project is expected early in 1996 to one of four consortia that returned bids in July.

The agency awarded a design consultancy for the Yesilcay project to a group led by the UK's Sir Alexander Gibb & Partners in late 1994, and began receiving tenders for a series of eight construction contracts in September.

The Izmit water supply project is among a number of large BOT projects, most of them in the power sector, that are moving ahead after years of delays due to problems with guarantees for the repayment of construction financing, and various legal obstacles. A financing package valued at around $870 million was concluded in London on 19 December. Arranged by The Chase Investment Bank, it breaks down into $580 million worth of export credits, a $160 million, seven-year commercial loan, and around $130 million in equity contributions from the BOT venture's shareholders.

With Istanbul's future welfare relying so heavily on adequate resources these projects cannot be completed too soon.

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