Local shipyard rents increase 1,500 percent

Local shipyard rents increase 1,500 percent

The Turkish government has raised the rent for shipyards by more than 1,500 percent even though the sector is under immense pressure due to financial constraints.

The amount of rent demanded has shot up from last year’s 112,000 Turkish Liras ($61,000) to 1.7 million liras, said a representative of a shipyard company that wanted to remain anonymous.

“The rents were reasonable until 2005, but especially after the 2008 crisis, there has been a substantial increase with the rents. This year’s raise, however, is excessively high,” said the chairman of the Turkish Shipbuilders’ Association, Murat Kıran.

Treasury representatives said the government was working on a new scheme that would index rent amounts to tenants’ turnover rather than the value of the land. In the new system that has been discussed in Parliament’s Budget Planning Commission, the rent will be 1 percent of the overall turnover of the tenant, the sources said. The shipyard sector was hit hard by the 2008 financial crisis, and it has yet to fully recover, as many yards were closed in the meantime while those still operating were reduced to around 15 percent capacity.