In Investment Push, Turkey to Sell Operating Lease for Port of Izmir
Amidst looming economic troubles, the government of Turkey is reportedly in talks to sell operating rights to Izmir's Alsancak port complex to a government in the Persian Gulf, according to Bloomberg.
Alcancak is a multi-use port on Turkey's Aegean coast. It has a 1.1 million TEU container terminal, along with substantial facilities for dry bulk, breakbulk and roro cargo. It is a relatively shallow-draft port, with average depth of about 36 feet, but still handles about 2,000 vessels and nine million tonnes of cargo per year (overall).
The port has been under the management of Turkish State Railways (TCDD) since the 1980s, and it is owned by the Turkish Wealth Fund. The government attempted to privatize it in 2007, and the winning bid came in at about $1.3 billion. However, the deal was halted in court, and the port has remained under state-owned management ever since.
The Turkish government is now looking to change that, according to Bloomberg: As part of ongoing investment talks with governments in the Persian Gulf region, Turkey is discussing options to sell operating rights to the port. If the previous privatization attempt is any guide, the sale could bring in billions of dollars in much-needed revenue.
The Turkish government is in need of dollars: it faces a persistent current account deficit, and it is taking drastic steps to bring in foreign exchange to prevent the kind of trade challenges that have hit Pakistan, Egypt and Sri Lanka. When foreign exchange runs out, a country cannot pay for dollar-denominated imports. It has already received an undisclosed amount of "help" from friendly countries in the Persian Gulf, according to President Recep Tayyip Erdogan, including a $5 billion cash deposit from Saudi Arabia.
The government's economic challenges also include rampant inflation (38 percent year-on-year) and the plummeting value of the Turkish lira, which is trading at an all-time low of 26 to the dollar.