TURKEY: Parliament debates privatisation law

04 November 1994

Parliamentary debate began on 26 October on a law clearing the way for the government's privatisation programme. The bill was expected to pass the house in the week ending 30 October with support from the main opposition Motherland Party (ANAP).

The bill creates a legal framework for privatisation, contains safeguards against the creation of monopolies, and introduces a safety net for workers. It rules that the government should retain a controlling share in key state economic enterprises (SEEs), while those of most strategic importance to the economy should be denationalised through individual acts of parliament. It also envisages the accelerated sale of state banks.

If the bill is passed, the government will speedily reactivate the stalled programme. Proceeds from privatisation in 1994 have been about $410 million. The original target was around $2,300 million.

The renegotiation of several minor deals suspended earlier in the year would come first. These would include airports handling company Havas, the Meat & Fish Board, the Milk & Dairy Products Organisation, the Petlas tyre company, and Sumerbank. In December would follow major deals in state petrochemicals corporation Petkim, the Eregli Iron & Steelworks on the Black Sea, the Turkish Petroleum Refineries Corporation (Tupras) and refined products distributor Petrol Ofisi (POAS).

However, the preparation schedule has slipped for the two largest deals envisaged, of Turk Telecom which has been carved out of the posts, telegraphs & telephones (PTT) administration, and the Turkish Electricity Board (TEK), which has been divided into distribution, and generation and transmission companies. These may not be ready until the end of 1995.

A decision is pending from the constitutional on the validity of the Energy Ministry's privatisation plans for TEK. If it is positive, TEK may be handed over by the ministry to the government's privatisation agency for arranging the sale.

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