Overseas investors will be the main source of funds for the government's privatisation programme in the short term, says Tezcan Yaramanci, the chairman of the privatisation agency KOI. In a 17 June interview with MEED, Yaramanci said Turkish corporations were facing a financial squeeze, but the situation was expected to ease by the end of 1994.

Prime Minister Tansu Ciller says the privatisation programme will bring in around $3,500 million this year, and more than four times that amount in 1995. However, Yaramanci said the government will have to accept cheaper terms from the privatisations, because of the economic downturn.

'Naturally, the price of shares will be related to profit expectations,' he said. However, he said the government is more concerned with boosting efficiency and profitability in state-run industry rather than with revenue raising. 'The best thing is to test the markets,' he added.

The next sale will be the Eregli Iron and Steelworks (Erdemir) on the Black Sea. Yaramanci said proceeds are expected to be between $300 million- 400 million. Both local and international groups are interested, he said. The government is looking for a core investor with experience of international markets and knowledge of modern technology to take a controlling stake in the company, he said.

A similar investor is also sought in the sale of refined products distributor Petrol Ofisi. However, a major portion will be reserved for a public share issue, Yaramanci said.

Turkish Petroleum Refineries Corporation (Tupras) is also on the list of companies to be privatised. However, Tupras is facing financial difficulties because of unstable petrol prices.

Towards the end of the year, national carrier Turk Hava Yollari (THY - Turkish Airlines) will be put on the market, Yaramanci said. He is now chairman of the airline. Less than 50 per cent will be sold, but it will carry management rights. Two or three foreign airlines are already interested, he said.