A provisional implementation agreement on a build-operate-transfer (BOT) basis for the $1,800 million Izmit bay crossing project was scheduled to be signed with a consortium of British, Japanese and local firms in the presence of Prime Minister Mesut Yilmaz on 16 October. The client is the State Highways Directorate (KGM) in the Public Works & Housing Ministry (MEED 16:5:97).

The consortium includes Norway's Kvaerner Construction, the local Enka Insaat, and Marubeni Corporation, Itochu Corporation, Ishikawajima-Harima Heavy Industries, Mitsubishi Heavy Industries, and NKK Corporation, all of Japan. The agreement will run for 27 years including a construction period of four years, according to a senior KGM official on 15 October.

Construction is expected to start in the second half of 1998 after the signing of further accords including credit and construction supervision agreements, the KGM official said. The KGM chose the consortium's tender over two rival bids for its shorter construction period, financial and technical strength, and suspension bridge construction experience, the official added.

The crossing includes a centre span of 1,680 metres. The bridge crossing, including two side spans, will have a total length of 2,808 metres and will cost about $863 million to build, according to the official.

The project also includes the construction of 36 kilometres of motorway costing about $550 million between Dilovasi on the southern shore of Izmit Bay to Orhangazi near the industrial city of Bursa, the official said. Both the bridge and the motorway will have three lanes in each direction.

The consortium members will establish a company with a capital consisting of 25 per cent equity and 75 per cent financing. Its financing adviser will be Kleinwort Benson, assisted by ING Bank and Dai-Ichi Kangyo Bank as financing leaders, according to a senior Enka official. The financing will mainly come via the Export-Import Bank of Japan and the UK's Export Credits Guarantee Department.

According to the BOT method, operating proceeds from tolls will pay off construction costs and generate profits for the consortium. Initially, tolls will be charged for the use of the bridge crossing, and thereafter will be charged on the motorway as it is completed in sections, according to a KGM official.

The government will not guarantee operating proceeds as foreseen in the BOT agreement, says the KGM official. However, subordinated loans arranged by the treasury will be made available in case of force majeure, design changes and extensions of construction periods, the official added.