A law clearing the way for build-operate-transfer (BOT) projects was expected to be passed by parliament by 10 June. However, the law on its own is unlikely to encourage financial arrangers to launch commercial syndications until the market outlook improves, bankers say.
The new law sets down a legal framework for the franchising, construction and operation of private sector ventures under the BOT method. According to the provisions already approved by parliament’s plan and budget committee, BOT contracts will have a maximum term of 49 years.
Contractors say the measure removes several legal hurdles, but should have been introduced when the BOT concept was pioneered in the mid-1980s. Not one major scheme has yet come to fruition in Turkey.
Export credit funding has already been lined up for several BOT projects, including the $1,250 million Birecik hydro-electric dam on the Euphrates, the $720 million Izmit water supply scheme and a $1,000 million power plant project near Eregli. But banking sources say international markets are unlikely to be receptive to commercial syndications before September at the earliest, because of Turkey’s poor credit ratings.