TURKEY: Mass power privatisation moves forwards

29 November 1996

The Energy & Natural Resources Ministry has invited bids for the lease transfer of operation and maintenance (O&M) rights for 12 large thermal power stations. The plants will have a total installed capacity of about 7,120 MW. The closing date for bids is 20 February 1997 (see Tenders). The ministry has also invited applications by 27 December for the completion of 19 hydroelectric power plants according to the build-operate-transfer (BOT) model.

Prime Minister Necmettin Erbakan says the government will raise a total of $10,000 million from the O&M leasing and the BOT hydro transfer projects. The revenues will form part of a third, $20,000 million financial package, which the government says will help to balance its 1997 budget.

Of the 12 O&M plants, 10 are fuelled by lignite, with outputs of 210 MW-990 MW, while the remaining two are fuelled by natural gas at Hamitabad and Ambarli with respective capacities of 1,120 MW and 1,350 MW.

Industry sources say the gas plants, with their greater ease of operation, seem likely to attract most interest, particularly as several of the lignite- fuelled stations are already opposed on environmental grounds. The government has already had to override court closure orders for three lignite plants: Yenikoy (420 MW), Gokova (630 MW) and Yatagan (630 MW) in the southwestern Mugla province, and another at Orhaneli (210 MW) near the northwest industrial conurbation of Bursa (see below).

The 19 hydroelectric power plants have a total capacity of about 1,534 MW, and range from small to medium-scale. Amongst the largest are the Catalan dam on the Seyhan river (169 MW), the Kiralkizi dam on the Tigris (94 MW), the Obruk dam on the Kizirlirmak river (200 MW), the Ozluce-Peri dam on the Euphrates (200 MW), and the Akkopru scheme (115 MW) on the Western Black Sea coast.

Hydroelectric private power projects in Turkey are expected to attract more interest from local contractors than from abroad. This is largely because hydroelectric power projects must be undertaken according to the BOT method, which, through its concession status, excludes access to international arbitration in case of contractual dispute.

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