New agenda for power sell-off

ANKARA - Hürriyet Daily News

Turkey struggles to find financially strong investors to buy out its remaining electricity distribution grids. Power generating facilities may follow, according to official plans. AFP photo

Turkey’s privatization board (ÖİB) has revealed a new agenda for the tenders for three electricity grids, including the one on the Anatolian side of Istanbul, in a bid to finalize a problematic process.

Companies should apply to qualify to enter the tender for the Akdeniz grid in the Mediterranean region by Sept. 21. The deadlines for Istanbul’s Boğazici grid and the Aegean region’s Gediz grid are Sept. 28 and Oct. 5 respectively. The closed-envelop tenders will take place in November, and a bargaining procedure will also take place if the board considers it necessary.

Energy Minister Taner Yıldız said on the sidelines of a meeting with his Bosnian counterpart in Istanbul yesterday that the payment procedure for the grid sales was eased. This was the result of a meeting with Finance Minister Mehmet Şimşek as the warranty payments for the tenders were increased by the way.

Turkey is facing problems in the power grid privatization process due to the financing hardships of the interested companies. MMEKA, a joint venture of businessmen Mehmet Emin Karamehmet and Mehmet Kazancı, had won the initial tender for Boğaziçi in 2010 with an offer of $2.99 billion. However, the group failed to perform its duties on time, forfeiting a $55 million warranty payment. Aksa and Park, the holders of the second and third highest bids also could not manage to finalize the procedure, and so lost $20 million each in warranty payments. The new bids were set as $30 million for the Boğaziçi grid, $23 million for Gediz and $15 million for Akdeniz.

MMEKA had also failed to finalize the privatization of Başkent Doğalgaz, Ankara’s gas grid, which is another lingering project on the government’s energy privatization agenda. Yesterday the Supreme Privatization Board (ÖYK) chose to include the remaining 20 percent of shares of the Başkent grid in its portfolio, which had not been previously on sale.