The government hopes to raise about $2,660 million from state asset sales in 1994, according to Tezcan Yaramanci, head of the Public Participation Administration (KOI). Next year it hopes to raise $18,030 million.

The government is hoping privatisation will ease its chronic budgetary difficulties, which were behind a run on foreign exchange starting in mid-January (see box).

When a new bill becomes law, the KOI will be given wide powers of privatisation, enabling it to accelerate the programme markedly. Over the previous decade only about $900 million was raised from asset sales, Yaramanci said, announcing the privatisation programme's medium-term targets on 10 February (MEED 18:2:94).

Recently, the programme's key deal, the sale of the telecommunications division of the posts, telegraphs and telephones (PTT) administration has been held up by the constitutional court. However, Yaramanci says that a deal valued at about $3,000 million will be clinched soon for the issue of PTT bonds. The bonds would be convertible into equity at the end of their term. The government has also been considering the issue of bonds in other state economic enterprises (SEEs) to get around the court restrictions. Yaramanci says that the state can no longer afford the huge investment required to keep the PTT competitive.

The next major deal will be the sale of state equity in the leading car maker, Fiat licensee Tofas, and its distributor, Tofas Oto, which is expected to raise about $500 million in March. This sale on the domestic and international markets is being placed by two consortia, Schroders in association with the local Interbank, and Lehman Brothers with the local Finansbank. The KOI will also dispose of the state's share in the giant Eregli Iron & Steelworks (Erdemir) in the first half of 1994. A mandate to handle the sale is being negotiated by the KOI with Credit Suisse First Boston at the conclusion of a five-stage privatisation study.

The government has made loss-making firms its top priority for privatisation, Yaramanci says. Strategically unimportant firms, those requiring heavy investments and firms working in competitive environments will also be the first to go. In response, critics claim that the government is concentrating on selling off its most profitable operations first, leaving itself saddled with losers.

Other enterprises slated for privatisation by Yaramanci are state banks, insurance firms, coal mines and Turkish Electricity Board (TEK) production units, along with around 200 minority participations in leading private- sector companies. A consortium led by The Chase Manhattan Bank holds a mandate to offer equity in the Turkish Petroleum Refineries Corporation (TUPRAS) and refined products distributor Petrol Ofisi by the end of 1994. Feasibility studies will also start into the sale of state flag-carrier Turk Hava Yollari (THY - Turkish Airlines). It is hoped that this sale will also be completed by the end of the year.

Yaramanci says that at the top of his agenda for a smooth privatisation programme are the development of alternative methods of disposal such as leasing or management buy-outs; the setting of realistic sale prices; and the prevention of monopolies. Social security provisions are also a top priority. He plans to set up an indemnity package for redundant workers until a state unemployment benefit system is worked out.