Discussions about the timing of a commercial syndication for the $750 million Izmit water supply project are expected to start between the contractor and the treasury before the end of May. A consortium led by the UK’s PWT Worldwide and advised by Chase Manhattan Bank is ready to go to the markets (MEED 30:7:94).

The syndication for the build-operate-transfer (BOT) project has yet to be allotted a place in the treasury’s queue of deals approaching the international markets (MEED 30:7:94). The latter remain nervous about fresh Turkish risk, although an expected IMF stand-by facility may restore credibility (see above).

The treasury is conducting a review of big projects and schemes with foreign funding will take priority, according to contractors. The review is also likely to favour BOT schemes.

Other members of the consortium are PWT’s parent, Thames Water, and local contractors Gama Endustri and Guris. Two Japanese companies, Mitsui & Company and Sumitomo Corporation, will participate in financing and procurement.

The project calls for the completion of the Yuvacik dam, construction of a water treatment plant, and two pumping stations, the laying of a distribution system in Izmit, and a trunk main to Istanbul. It will be financed by a mix of 85 per cent credit and the remainder in equity. The loan finance is expected to come from export credits, Japan’s Overseas Economic Co-operation Fund (OECF) and commercial banks.