TURKEY: Appeal against power station tenders injunction

07 March 1997

The government is expected to appeal for the removal of an injunction against tenders for six major thermal power stations. The tender process, begun last autumn, was for plants with a total capacity of about 5,200 MW and valued at about $4,600 million, to be built on a build-own-operate (BOO) basis.

The order, passed by the Council of State, was sought by the Chamber of Electrical Engineers, who claimed that the projects were introduced merely by a Council of Ministers' circular which excluded competent legislative organs.

Sources at the Energy Ministry said they plan to press ahead with the tender process. The injunction is likely, however, to cause a delay of about two months, they added. Besides appealing, the ministry could issue tenders for the plants on the build-operate-transfer (BOT) model, said Energy Minister Recai Kutan.

BOO was introduced by decree in June 1996 to supersede BOT, after a Constitutional Court ruling defining BOT projects as concessions, effectively ruling out international arbitration in the event of contractual dispute.

The BOT method is still being used largely for hydroelectric plants, although such projects have so far failed to attract the attention of international bidders.

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