April 12 2010-Important Statements by State Minister and Deputy Prime Minister Babacan

“Medium Term Program and Medium Term Fiscal Plan will be announced on June 15, 2010 as a single document. We will probably upward revise the official growth estimation which is 3.5% in the document. Turkey economy started to be recuperated upwards however, we cannot return to pre-crisis period yet. The most important risk is the unemployment issue.”

STATE MINISTER and Deputy Prime Minister Ali Babacan made important statements to a media organ towards the current status of Turkey economy and made assessments towards the impacts of the global crisis in the world and in Turkey.

State Minister Ali Babacan has noted that the Medium Term Program and Medium Term Fiscal Plan would be released on June 15, 2010 as a single document and the official economic growth estimation which is 3.5%, would be upward revised in the subject document. Babacan has said that it was a positive surprise the economic shrinkage to be 4.7%, lower than expected and the economic growth to be 6% in the last quarter of 2009.

Babacan has noted that economic revitalization in Turkey has shown increase trend started from last quarter of 2009 and recuperation process would continue in 2010 and said,

“Turkey economy started to be recuperated upwards however, we did not return to pre-crisis period yet. It will take time to come to that point”.

State Minister Babacan has announced that in mid-June when they updated the Medium Term Program, the growth rate of the economy would be announced higher than 3.5%, and went on to say,

“The economic growth estimation to be announced for 2010 will not be 3.5% but will be a higher figure. I would not say this now because I want to see the developments in the next few months. We talk about the recuperation throughout the world however, the recuperation is inherent in some risks as well”.

Babacan showed Greece as an example and noted that a reverse development in Greece would lead to serious consequences that would shake Euro zone as a whole.

Deputy Prime Minister Ali Babacan has said in responding to a question asked towards the economic recuperation in the World that high unemployment rate was one of the most important risks involved in US and EU economies in the forthcoming period and it was the most important risk for Turkey as well.

Noting the prevailing belief towards the economic growth trend in Turkey to be more strong in the forthcoming period, Babacan has stated that the decrease in household consumption last year was limited and this year increase trend started. He further emphasized the fact that there was no need for Turkey to make tax increase in the medium and long term however, in USA and EU the trends were contrary and they have to choose such an approach. Stressing Turkey will maintain her position to be the most advantageous country in every respect, Babacan has said that the Institutions Tax, VAT and Income Tax would continue to be lower.

Fiscal rule will cover the Municipalities as well

State Minister Ali Babacan said in response to the question asked towards the Fiscal rule that when the State were farseeing, Private Sector operations were facilitated and when the developments were studied in the period starting from the date when they announced the would be done for 3 years, Fiscal rule would be better understood. Babacan said that Fiscal rule would cover local administrations along with the Central Government so as to cover the municipalities.

Summarizing the rules pertaining to the local administrations as “the Municipalities can incur debts in the amount equal to their annual income” Babacan went on to say, for example, if a Municipality was in need of Wastewater Treatment facility “ as a must”, the income of the subject municipality would be studied and if the subject work could not be implemented then the central government would be involved.

April 12 2010-BOTAŞ’s Tuz Gölü (Salt Lake) Underground Natural Gas Storage Project

BOTAŞ officials made studied in the site before the “Site Seeing Tour” to be organized on April 19, 2010 for the tender, expected to be participated by all firms

IT HAS BEEN learnt that the preparations of the turnkey international tender launched by BOTAŞ General Directorate for the largest capacity Natural Gas Storage Facility of Turkey to be installed in Aksaray-Sultanhanı region have continued and studies were made in the areas where the facility will be installed in the days past.

BOTAŞ General Directorate officials have visited Aksaray-Sultanhanı region first as the preparation for Site Seeing tour to be organized for the firms and made studies in the area where the facilities will be installed.

BOTAŞ is awaited to receive answers from the firms invited to Site Seeing Tour and Information Meeting whether they will participate or not, however, all of the firms are awaited to participate in the Site Seeing Tour.

As it might be recalled, we earlier reported that 8 prequalified firms or Joint Ventures were invited to bidding on June 18, 2010 (TEBANEWS#1453/March 22, 2010). In the international tender, prequalified Russian, Chinese, Indian, Austrian, German and Turkish firms were invited however, some European firms participated in important projects in Turkey have not been invited for not being prequalified.

Site Seeing Tour will be made on April 19, 2010, Information Meeting on April 20, 2010

The site Seeing Tour of the tender will be made on April 19, 2010, Information Meeting on April 20, 2010 at BOTAŞ General Directorate. According to the tender specification, it is not obligatory to attend the Site Seeing Tour or the Information Meeting.

It is known by all firms that answers to be given to the questions in the face to face meeting to be held with the relevant authorities are of great importance within the context of the pre-tender preparations. For this reason, it is observed that the firms that will participate in the tender are usually participate in the Site Seeing Tour and Information Meeting. The firms that are not attend the meeting usually do not participate in tender or are not determined.

Eight firms or Joint ventures invited to participate in turnkey tender launched by BOTAŞ for Tuz Gölü (Salt Lake) Underground Natural Gas Storage Project are listed below,

- China Tianchen Eng. Corp. (People’s Republic of China)

- Alsim Alarko+Doğuş İnşaat A.Ş.

- Habau (Austria)+PPS Engineering (Germany)+PSE Engineering (Germany)

- Ukrnaftogazbud CSJC (Ukraine)+Türkerler+İndet İnşaat

- Çalık Enerji

- PJSC Stroytransgaz (Russia)+Güriş

- Öztaş İnşaat+Fernas İnşaat

- Punj Llyod Ltd. (India)+Attila Doğan

BEING one of the pioneering Turkish companies at international crude oil pipeline projects and refinery works, Tekfen Construction and Installation Co., Inc. signed a new contract for turn-key construction of 2 new units at Samir Refinery where and for which it has already conducted some previous projects.

Tekfen will construct the New Crude Distillation Unit with a capacity of 4 million ton/year and the New Merox-Kerosene Unit with 600 thousand ton/year in Samir Refinery (Societe Anonyme Marocaine de l’Industrie du Raffinage).

For the Project Tekfen Construction signed a Euro 40.5 million (approximately US$ 53.8 million) contract with SAMIR which is one of the largest companies operating in Morocco and which owns the sole refinery of the country.

After the 2 new units to be constructed by Tekfen, the refinery’s crude oil processing capacity will increase by 55 percent. It is said that the construction drawings are mostly ready for the Project whose engineering work was awarded as a separate contract to the Spanish company Technicas Ruinidas and that Tekfen will begin construction works very soon.

It is also reported that Tekfen which recently completed Samir upgrading Project in the same region knows the region well and that mobilization of equipment and personnel are largely ready left from the previous Project.

For the construction work to be conducted by Tekfen, the expected main construction quantities are listed below:

- Excavation: 30,000 m³

- Reinforced Concrete: 8,000 m³

- Structural Steel: 650 ton

- Equipment Erection: 3,700 ton

- Piping Erection: 2,000 ton

- Electrical Cabling: 230 km

- Insulation: 40,000 m²

ENERGY and Natural Resources Minister Taner Yıldız accepted Chief of Turkish Industrialists Ümit Boyner and Businessmen Association and its members at his office on April 9, 2010.

In the statement he made after the interview, Minister Yıldız said that they deliberated the energy issues, natural gas and electricity markets in detail. He reminded that they were working on a separate bill to this end. Minister Yıldız went on to say that all the sector representatives contributed to passing a good law and to create more productive and dynamic environment, and that they themselves voiced their views together with Energy Market Regulatory Authority (EMRA) and with the other relevant institutions and agencies.

Minister Taner Yıldız, “Through Natural Gas Market Law Amendments, we are after increasing the share of private sector to minimum 25%”

Yıldız communicated that with the amendments to be made to the Natural Gas Market Law no. 4646, they had formed a mechanism to create this market and gradual developments in this scope through a more liberal, competitive and sustainable price. He further said that, in the same way, with the amendments to be made to the Electricity Market Law no. 4628, they created mechanisms towards the distribution and investor generating companies.

Yıldız stated that they took a basic decision in principle to increase the share of private sector in their work on the Bill for Natural Gas Market Law Amendments, and that in this direction, the current rate of contract amount, which was about 10%, would be risen to minimum 25% as projected. If this could lead to a basis to reach around 40% from 25% through the agreements made with the suppliers, they were also take this warmly. Yıldız added that for the sake of making the market liberalized to a greater extent, they would reflect private sector to exist in this market as a more powerful actor in the Bill.

Chief of TÜSİAD Ümit Boyner, “In terms of liberalization of energy, we attach importance to become freer”

Ümit Boyner noted that the issue of energy was a very significant subject for the competitive power of Turkey, that it crossed all the industry and many sectors vertically, and that energy played a very important role in terms of Turkey’s geopolitical significance and her foreign relations. Boyner added, ”Energy policies have an important parameter to make Turkey reach upper positions for competition by means of the cooperation of public and private sector. Boyner further said that in the TÜSİAD’s 2010-2011 Program, they approached to the issue of energy from 3 main points, which were: ''Liberalization of Energy Sector”, ''Pipelines Policy” “Supply Security”.

Boyner indicated that they focused on liberalization in energy and said that TÜSİAD members would be wanting to be included in the energy privatization process, as in the past. Boyner further communicated that in terms of competitive power, private sector would contribute significantly through a number of arrangements to be made, and that in this process, cooperation of private and public sector was extremely important and added, “I am in the opinion that to the extent that we develop a sound privatization plan, we can provide financing to the same extent. That’s why we focus on cooperation very much. In this process, we intend to become very active; that’s why we are here'.'

April 12 2010-BOTAŞ’s Erzincan Compressor Station Project

Bid deadline for international compressor station construction tender has been determined as 6 May 2010 as a result of postponement requests received from the companies

General Directorate of Petroleum Pipelines Corporation (BOTAŞ) postponed the deadline for submitting offers to Erzincan Compressor Station construction tender, which is included within the scope of Republic of Turkey Gas Sector Improvement project and will be financed with a World Bank credit, to 6 May 2010 (TEBANEWS#1448/15 February 2010)

Upon request of two companies, purchasing specifications of compressor tender and expected to submit offers, submitted to BOTAŞ concerning postponement of the deadline for submitting offers, tender submission date, which was 29 April 2010, was determined as 6 May 2010 upon approval of the General Directorate due to recent postponement request for 1.5 months.

BOTAŞ Department of Engineering Studies and Contracts approved postponement of the tender submission date for 23 calendar days considering the issue of companies submitting competitive offers with appropriate offer files. Accordingly, time extension for the tender has been notified to all companies purchasing specifications of the tender.

The tender will be held at “BOTAŞ Haberleşme Müdürlüğü Bilkent Plaza 4. Cadde A-2 Blok, Zemin Kat, 06800 Bilkent-Ankara-TÜRKİYE”. Companies interested in this tender can obtain the specifications by applying in writing to the following address and by depositing $400 (VAT included). This fee is to be deposited with Vakıfbank Bilkent-Ankara Branch BOTAŞ TL Account No. 2005690 or $ Account No. 4004715 irrevocably.

Companies interested in compressor tender

According to the research conducted by TEBA at this point, it is expected that the number of companies purchasing specifications of the international tender will increase in the forthcoming days, for which approximately 15 ea companies purchased specifications as of the second week of April. It is reported that most of the companies interested in the previous tenders announced by BOTAŞ are to be also interested in this tender. Below we present you the companies interested in the tender, which we could find out:

* Gama Endüstri

* Metot

* Çalık

* MMK

* Akyaz

* Güriş

Included in the scope of the tender are such items of work as having a configuration of 3+1 (three units under operation and one unit spare) that is, 4 turbine-compressor units and equipment as well as the pieces of work set in the tender documents. Erzincan Compressor Station will be installed nearby Çayırlı county, 115 km far from the city center, and its planned through this station, to pressure a flow of 1,613,000-2,040,000 Sm³/hour in the pipeline along the year.

UPON the directives of the Minister of Transportation Binali Yıldırım, revision works have reportedly been re-started on the feasibility survey of Zafer Airport Project which was earlier put to tender on Build-Operate-Transfer (BOT) Model for air transportation of Kütahya-Afyon-Uşak region however cancelled as no bids were submitted.

It is learnt that 8 firms which bought specifications for participating in BOT Model tender conducted on April 1, 2010 by the State Airports Administration (DHMİ) General Directorate, have not submitted bids for not considering the project feasible.

As it might be recalled, in the most recent news story on the subject we reported that as no firms submitted bids in the BOT Model tender, the tender was cancelled (TEBANEWS#1455/April 5, 2010).

According to TEBA’s inquiry, firms which bought specifications did not submit bids in the Tender for not founding BOT Model Project feasible in respect of the passenger guarantee and investment cost asked.

As is known, minimum investment cost is estimated in the preliminary designs on the basis of the annual passenger guarantee and investment cost given by DHMİ in the BOT Model Airport Projects launched by DHMİ as the entity in charge. The firms that will participate in the tender usually make their offers for the operation period of the airport on the basis of the two values approximately estimated.

As in the region an airport will be constructed for the first time and no passenger evaluation is available, the estimated passenger number comes out to be low in the evaluation made on the basis of economic conditions of the region and the business potential. In return, the investment cost is estimated to be USD 100 million in the preliminary designs prepared for the investment. It is noted that financing will be difficult to obtain for such scale of investment, that credit financing cost will be high and it will be difficult to find financing because of the international crisis. Under the light of the details mentioned above, the pay back period of the Project does not seem feasible.

The relevant sources report that DHMİ General Directorate may review the feasibility surveys of the investment and the project can be reconsidered in the forthcoming period. Same sources further note that the reduction of the investment cost and the shortening of the pay back period of the investment can be considered in the course of review of the investment.

The same sources further comment that it will be more appropriate to wait for the suitable environment to be matured for the Project and the Project is awaited to be reconsidered.

Which firms interested in BOT Model Tender

Actually, 8 firms bought specifications for the BOT Model Tender launched by DHMİ on April 1, 2010 for Zafer Airport investment and no bids were received although 4 firms obtained Site Visiting Document. The firms bought specifications of the BOT Model Tender are Kolin İnşaat, Limak İnşaat, IC İçtaş İnşaat, Koçoğlu İnşaat, Makyol İnşaat, Özka İnşaat, YDA İnşaat, MÖN İnşaat.

Firms obtained Site Visiting Document before the tender were Limak İnşaat, IC İçtaş İnşaat, Koçoğlu İnşaat and YDA.

April 12 2010-DSİ’s Hatay Energy Group Project

Application deadline has been set as May 8, 2010 for the HEPP project through which 35 GWh electricity is expected to be generated per annum on the average

APPLICATION deadline has been set by State Hydraulic Works (DSİ) as May 8, 2010 for Hatay Energy Group Project opened for private sector construction earlier in the scope of the Water Use Right Agreement.

According to TEBA information, DSİ has completed in work on including the Hatay Energy Group Project in “the List of Applied and Applicable HEPP Projects” and obtained authority clearance to this end. Kuzeybatı Enerji company has been the first applicant company so as to undertake this project.

As might be recalled, we informed you earlier that no application had been received for this HEPP project by 22 March 2010, included by DSİ to those projects opened for private sector applications (TEBANEWS#1454/March 29, 2010).

It is reported that a great interest is expected to be shown in this HEPP project for the amount of energy to be generated (35.19 kWh) and for its installed power of 8.78 MW.

In line with the timing schedule prepared for the project, after the bids are received by May 8, 2010, bids are planned to be received in the Water Use Right Meeting in the second half of the year, the latest, and DSİ will sign a Water Use Right Agreement with that company which will submitted the highest bid per unit energy of kWh in the bid opening session of the meeting.

HEPP projects included in the scope of Energy Group

According to TEBA inquiry, the Hatay Energy Group Project is composed of 5 separate HEPP projects, which are Ağtaş, Avcılar, Kömürlük, Kuzey and Payas Regulator and HEPP.

Location: Hatay Province

Installed Power (MW): 8.78

Annual Generation on the Average (kWh): 35,190,000

IT IS REPORTED that Petroleum Pipelines Corp. (BOTAŞ) plans to announce an international service procurement tender to control the crude oil pipeline with Smart Pig Method in May. This tender has been announced three times earlier.

According to TEBA information, preparatory work on the specifications has been launched some time ago. Through this tender, it is aiming to control Iraq-Turkey Crude Oil Pipeline, Ceyhan-Kırıkkale Crude Oil Pipeline and Batman-Dörtyol Pipeline. The Administrative Specifications are being prepared by the Engineering and Contracts Department.

Bids are planned to be received in the first half of the year.

Sources close to the subject note that all the documents prepared for the tender will be presented to the Executive Board for approval in April. The same sources add that the tender announcement is planned to be made in the Public Procurement Authority’s (PPA) bulletin in May and bids be collected afterwards, and that foreign and domestic companies are expected to be interested in this tender of BOTAŞ and a nearly 40-day period is expected to be given to the companies to prepare their bids.

The specifications can be examined at the address of “BOTAŞ Genel Müdürlüğü Mühendislik ve Sözleşmeler Daire Başkanlığı Bilkent Plaza A-1 Blok Kat:6 Oda:609 Bilkent / Ankara” or can bre obtained from the same address in return for their fee.

In the past, this tender had been announced 3 times

BOTAŞ had earlier announced this tender 3 times. In the latest tender, bids were received from 3 companies by BOTAŞ on 19 December 2008, and the lowest bid of $ 1.8 million came from Lin Scan Advanced Pipeline and Tank Services. The other bidders were Weatherford Pipelines Specifications Services and Rosen Europe B.V. companies. Bids submitted to the tender varied between $ 1.8-5.2 million (TEBA:1388/ 22 December 2008).

Test drives of the train sets purchased within the scope of the contract executed with Spanish Construcciones Y. Auxiliar Defer SA (CAF) winning the tender of 33 ea Electrical Commuter Train Sets opened up by İZBAN A.Ş. company established by İzmir Metropolitan Municipality and General Directorate of Turkish State Railways Administration (TCDD) in order to run Aliaga-Cumaovasi Railroad Line conducted in Ankara Train Station on 8 April 2010 with the participation of Minister of Transportation Binali Yıldırım.

Minister Yıldırım noted that Egeray might be opened up in two stages; he said that first the southern line from Cumaovası to Alsancak, would be opened up mid-year. Remaining part will be completed during the second half of the year and the line will be fully operational. Minister Yıldırım stated that the total project cost of Egeray infrastructure of which will be realized through the cooperation of İzmir Metropolitan Municipality and General Directorate of TCDD and will be operated by İzban A.Ş was around TL 1 billion. Yıldırım reported that Egeray, which would serve more than 200 million people per year, was a project to relieve transportation between the north and the south of İzmir.