State guarantee shock to third airport

State guarantee shock to third airport
3 with great risks in terms of auction price. the airport was now a 'frenzy project' with much sharper risks.

We have previously written several articles about the third airport to be built in Istanbul. The project, which is the biggest privatization in the history of the Republic with 36.5 billion euros, is vital as well as economically and politically. The sustainability of the AK Party's growth model based on construction and urban rent before the critical elections to be held in the next two years… And for the continuation of the prosperity-based voting system, it is a vital necessity to make the airport… Because the mentioned airport was mentioned by Prime Minister Erdoğan before the 2011 elections. The series is located in the middle of crazy projects consisting of huge building complex.

The third airport, Kanalİstanbul, is the 'crazy projects' consisting of satellite cities that will rise next to them… To be able to maintain the growth and urban rent in the construction sector, which has gone to a dead end due to incorrect calculations… New jobs that will be created directly and indirectly, employment growth, to increase… And ultimately stands out as the biggest trump card of the AK Party for the continuation of economic growth and political success… Not only the AK Party, but also the fate of the capital groups that support the power are shaped around these projects.

going well almost everything initially in terms of projects, the obstinate in Gezi Park events before the last two months ... Then the interest rate increase releases of the US Central Bank ... And finally the rapidly changing perspective against in terms of global investors in developing countries like Turkey ... Overall the crazy projects, and in particular It was a great misfortune in terms of the third airport.

Limak's boss, Nihat Özdemir, and the fifth investment group, including Cengiz İnşaat, which has been in the leading role in almost every public investment, has turned into a very questionable project due to shocks such as exchange rate, interest and growth. . The inquiries are very normal because the changing conditions within two months increased the final cost of the project by $ 6-7 billion. The third airport, which already has big risks in terms of tender price, is now a 'madness project' with much sharper risks.

While all this was happening, the group that won the tender frequently voiced the 6.4 billion-euro state guarantee as the biggest power behind the project. However, a banker friend who has been following the tender process from the beginning gave such information that I started to believe more and more that the construction of the airport was almost impossible.

The view of bankers is changing

Let me summarize as far as I can take note of him: “The 6.4 billion euro state guarantee will be given in the first 12 years after the airport opens. In order for the passenger guarantee to work, it is necessary to complete the investment of 7 billion Euros. And then 1 billion 45m euros of rent have to be paid every year. In addition, we estimate that the annual operating expense will be approximately 450m euros. In summary, the groups that won the tender are at risk of 12 billion Euros in total, 12.5 billion Euros in the first 7 years, 5.4 billion Euros in construction costs and 25 billion Euros in operating expenses. Yes, there is a 6.4 billion euro government guarantee. But first they need to be able to do these things ... In order for banks to give loans, they have to convince the bankers that they can come to a level that can guarantee the state. However, all they have is 2 billion euros of equity. ”

Putting the previous statements of my banker friend and Nihat Özdemir side by side, it turned out that their point of view was diametrically opposite. The banker looks from the opposite of Özdemir's direction. This is our problem anyway.

I am not as pessimistic as a banker personally. The AK Party will insist on this and try to make various gestures to the groups that won the tender. However, then the philosophy of the business will be completely questioned politically, the project will turn into a political symbol ...

Source : I



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