N. Cyprus's largest privatization tender faces cancelation

The largest tender by the Turkish Republic of Northern Cyprus (KKTC), the privatization of Ercan Airport for 650 million euros, faces the threat of being cancelled due to the election promises of a coalition party.

N. Cyprus's largest privatization tender faces cancelation

World Bulletin/News Desk

The largest tender by the Turkish Republic of Northern Cyprus (KKTC), the privatization of Ercan Airport for 650 million euros, faces the threat of being cancelled due to the election promises of a coalition party.

A consortium led by Taşyapı Construction was awarded the 25-year-long contract in September together with partner companies Terminal Group and a local firm Kaner. With the privatization, the airport expects to increase its passenger capacity to 8 million in five years.

However, the Democrat Party-National Forces (DP-UG) -- led by Serdar Denktaş, the son of the late President Rauf Denktaş -- which came third in elections last week with 23.1 percent of the vote and is expected to play a key role in coalition negotiations with 12 seats, asked Taşyapı to withdraw from the contract through negotiations with the government, or face court proceedings.

Denktaş had promised during his election campaign that the tender would be cancelled. He also added that the cancellation of the airport tender is one of the pre-conditions to forming a coalition with the other elected parties.

Upon Denktaş's comments, Taşyapı Construction Chief Executive Officer Emrullah Turanlı said the company is “expecting seriousness from the Turkish Cypriot government.” Noting that the tender was won under transparent process, Turanlı said he does not understand why such talk has emerged.

“We are bothered by such discussions. All we did was bid on a government tender, and we won it with our two partners. If the court decides to cancel the tender and orders the government to compensate for our losses then we will have to go along with it. But any outcome other than this would upset me as an investor and in such a case, nobody would want to invest in the KKTC,” he said.

According to the 650 million euro, 25-year lease agreement, 300 million euros of the payment would be made to the KKTC government, of which 100 million euros have already been paid by check. The remaining 350 million euros will be through a direct investment in the airport. In addition, Taşyapı would receive 47.8 percent of the profits.

Last Mod: 06 Ağustos 2013, 12:29
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