Turkey and AD Ports End Negotiations for Izmir’s Alsancak Port
The planned investment by AD Ports Group in Turkey’s Alsancak Port in Izmir has fallen apart after failed negotiations. The Turkish government this week confirmed that it has ended talks with the UAE company over the operation of the port.
The negotiations have been ongoing for almost two years. AD Ports was expected to buy a stake in the port in the western province of Izmir. The port has been operational since 1959, and according to the Invest in Izmir initiative, the port is today the country’s seventh largest in terms of container volume and thirteenth in terms of cargo tonnage.
“We have pursued long negotiations with the investor from the Gulf, but no agreement has been achieved,” Turkish Transportation Minister Abdulkadir Uraloglu told Bloomberg. “The aim was to get a partner to expand Alsancak port.” No further update was given on why the negotiations collapsed.
This becomes the second attempt to privatize Alsancak Port without success. In 2007, a group of investors including Hutchison Port Holdings submitted a $1.28 billion bid for the port. The deal was later blocked by a court leading the investors to withdraw.
Since 2017, Alsancak has been owned by Turkey’s sovereign wealth fund TWF. It is currently operated by the national railway company TCDD.
Faced with capacity challenges, the port has recorded a drop in cargo traffic. In container handling, the drop has come from a high of 390,300 TEUs in 2022 to 261,900 last year.
The negotiations were part of a wider effort by the government to attract additional foreign investment. Turkey opened its market to UAE investments, looking to raise capital for its critical sectors. In 2023, Turkey’s President Tayyip Erdogan inked deals worth $51 billion during a state visit to the UAE. The deals touched sectors such as energy, natural resources development, and defense. Trade relations between Turkey and UAE continue to develop, exceeding $50 billion in 2024, an increase of 11 percent year on year, according to data by the Turkish-Arab Economic Forum.
AD Ports' entry would have added to the massive investment by the DP World in the Turkish port sector. One of the largest container ports, Yarimca Terminal (Port of Izmit), on the Sea of Marmara east of Istanbul, is controlled by DP World. The terminal has an annual capacity of 1.15 million TEUs. Last year, the operator expanded into the neighboring Evyapport terminal in Izmit, through a merger with Evyap Group.
Alsancak offers a strategic advantage in its position. It does not require a transit of the Dardanelles. It is seen as a port with potential because of its location and easy access to the Mediterranean.