Doğuş wins Galataport tender with $702 million bid

ISTANBUL

AA Photo

Doğuş Holding has placed the highest offer for the privatization of the Istanbul Salıpazarı Port Area, commonly known as Galataport, with a $702 million bid, winning the right to operate the port area for 30 years.

“The project will add to Istanbul’s brand value amid its Olympic bid,” Doğuş Holding CEO Hüsnü Akhan said, speaking to the press right after the tender, which was conducted using the bargaining method.

Alsim Alarko and the consortium of Global Yatırım Holding-Özak REIT-Delta İnşaat, the other two bidders short-listed to participate in the bargaining process, abandoned the tender even though Doğuş increased the initial amount by just $1 million from $701 million.

The Polimeks-Folkart-Sembol consortium and the Torunlar Real Estate Investment Trust (REIT) quit earlier in the elimination phase.

Doğuş Holding, owned by a local conglomerate active in several businesses including media and banking, has been interested in marina businesses both in Turkey and overseas.

In his remarks, Akhan said his company foresaw an investment cost of between $350 million and $400 million for the project that will comprise a cruise port, shopping malls and office areas. The company plans to undertake the construction in compliance with the historical architecture of the neighborhood and to complete it within three years.

The area is located in Karaköy, one of the oldest port districts in Istanbul. The Salıpazarı port, one of the top 10 ports in Europe in terms of the number of passengers, has hosted 1,160 ships and 1.71 million tourists in the past three years.

Asked about the financing of the project, Akhan said the company would most probably choose to pay in installments.

“We hope the project will reflect credit on us as well,” Akhan said.

The Turkish Privatization Authority (ÖİB) attempted to lease the area for 49 years in 2005, and a consortium, which was headed by renowned (now deceased) Israeli businessman Sami Ofer and his Turkish partner, Global Yatırım – which also attended to yesterday’s bidding with another consortium – won the tender after outbidding their competitors with a 3.5 million-euro bid. However, the auction was later nullified by the Turkish Maritime Organization (TDI) on the grounds that certain conditions had not been met. The time period of the operation rights was limited to between 30 and 49 years while the width of the area included in the privatization was narrowed.

The Istanbul Salıpazarı Port Area has up to 1,200 meters of coastline and covers an area of approximately 100,000 square meters.

The current port and its neighboring area are expected to be improved after the privatization.

Construction has already been underway for the last two years on many new hotels in the area due to high expectations about the Galataport project.

The new tender has been the subject of new judicial cases as architects, urban planners and contractors’ chambers filed a lawsuit against the project after its details were announced to the public.