Turkey expects YTL 12 billion in 2008 from privatizations
(Todayszaman) - After earning a large amount of capital from privatization deals, especially in the last four years, Turkey seems to be keeping up its pace with plans to sell state properties and enterprises in the coming term.
The Justice and Development Party (AK Party) government had committed itself to making the state more flexible and responsive to its core duties by getting rid of its "economic burdens" through privatization. Having recently come to power for another five-year term, the government has on many occasions, as well as in its urgent action plan, declared that the privatization of state-owned companies will continue without interruption. As a part of its strategy, the government predicts that YTL 11.8 billion ($9.7 billion) in privatization revenue will flow into the Treasury's coffers in 2008.
Turkey was expecting to earn YTL 5.2 billion from the sale of state enterprises for 2007, but as the Oger Group opted to pay its remaining debt from the purchase of Turk Telekom, Turkey's telecommunication giant, all in cash and as a lump sum, the 2007 estimates were raised to YTL 11.6 billion.
The privatization deals are expected to continue quickly for the 2008-2010 period, while the initial public offering (IPO) will likely be the main tool in these deals. According to information from the Finance Ministry's "Financial Statement for the 2008 Budget," the state is planning to exploit IPOs to offer capital to all segments of society. In other words, not only a single company or a group of investors, but also anybody interested will have an equal opportunity to profit from the sales of state-owned enterprises.
According to the statements announced so far by state officials, the first item on the government's agenda is the privatization of electricity distribution companies. Soon after these profitable companies are sold, the clock will start ticking for the privatization of electricity generating companies.
Therefore, the first three companies to be sold will be the Baskent Electricity Distribution Corp. which provides energy for Ankara, K?r?kkale, Zonguldak, Bart?n, Karabuk, Cank?r? and Kastamonu; the Sakarya Electricity Distribution Company, which delivers electricity to Sakarya, Bolu, Duzce and Kocaeli cities; and Istanbul Anatolian Side Electricity Distribution Corp. (AYEDAS).
Simultaneously, studies to sell licenses for conducting games of chance, which are currently under the Turkish National Lottery Administration state monopoly, will be completed. Once the necessary legal regulations are provided, the privatization process for the national lottery will immediately commence.
The privatization of highways and bridges that currently belong to the General Directorate of Highways (KGM) is also on the government's agenda. As a part of this strategy, the Edirne-Istanbul-Ankara, Pozant?-Tarsus-Mersin, Tarsus-Adana-Gaziantep, Toprakkale-Iskenderun, Gaziantep-Sanl?urfa, Izmir-Cesme and Izmir-Ayd?n highways will be privatized under the "transfer of operating rights" method. Similarly, the Bosporus and the Fatih Sultan Mehmet bridges over Istanbul's Bosporus will also be sold with the same method.
Furthermore, state sugar refineries are also among the privatization plans for the coming term. Turkey's crucial ports in Band?rma, Samsun and Iskenderun will also be sold to private companies through the asset liquidation method. Turkish tobacco monopoly Tekel's sale process will also be completed as soon as possible. Last week, the Privatization Administration (OIB) announced that the last date to submit bids for Tekel will be Jan. 25, 2008.