Izmir Port decision gets strong reaction
The sale of the right to operate Izmir Port to Hong Kong's Hutchison Whampoa and Turkey's Global Yatirim was suspended Thursday, a decision that received strong reactions from the business community.
The State Council Administrative Matters Branch Committee decided to stop the handover of the port and canceled the Supreme Privatization Board (OYK) decision concerning the sale of the port, which belongs to the Turkish State Railways (TCDD). The OYK had previously approved the transfer of the management rights of the port for $1.275 billion.
The board approved the sale July 3, 2007, giving the nod to one of the year's biggest asset sales. After eight months, the Council of State, acting upon a complaint by the Port Workers Union (Liman-is) and the Foundation for Developing Public Institutions Management, blocked the handover.
Global Yatirim, whose shares on Thursday fell most in more than a year, said in a written statement that they were not given any notice about the annulment of the tender.
On the other hand, Liman-Is Izmir Branch Chairman Niyazi Tuncer said the decision is satisfactory.
It is satisfactory not only for us but for the sake of Turkey. This port makes good money, Tuncer told the Turkish Daily News. It is not right to give it to foreigners. The workers are happy, too.
But Oguz Satıcı, chairman of the Turkish Exporters' Assembly (TIM), criticized the judgment harshly. We are trying to encourage international investors, but get stuck on such problems," Satıcı said. It is impossible to understand the court decision, he continued: "Both importers and exporters were waiting for a handover of the port. [Such a handover] would have helped the port to serve more efficiently, while cutting down costs.
A deficient' logic:
EIB-LIMAS, part of the consortium that bid for the port together with Hutchison, said they respect the decision. Privatization has a certain logic. If the court finds that logic deficient, we respect that, said EIB- Limas Administrative Board President Servet Erocal. But we still hope for [another] decision.
The Chamber of Shipping's (DTO) Izmir Branch also voiced disappointment. We hope that the privatization is immediately executed, said Geza Dologh, president of the chamber. Under these conditions we will not be able to solve the delays and inefficiency of services at the port. Foreign investors will also have questions in their minds.
Ambiguity in privatizations should be avoided, said Mustafa Turkmenoglu EIB Presidents' Board Chairman. Noting that both the consortium and exporters had high hopes in the aftermath of the sale, Turkmenoglu demanded clarity from courts.
Izmir is the leading export and container port in Turkey. The western city has been an important call destination for largest maritime lines during the last four centuries. Izmir Port is the largest container port of Turkey and the only container port in the region. The port is already shipping 38.8 percent of the container transportation of Turkey. The annual capacity of the port is 11 million tons. Yet, due lack of investment, big ships cannot dock.
Source: Turkish Daily News