Updated: 02/26/2013 22:03 | By Agence France-Presse

Turkey starts public offering for roads and bridges

Turkey has set out to open its major roads and bridges to the public market after scrapping an earlier $5.7 billion tender, Finance Minister Mehmet Simsek said on Tuesday.


"We have started working on the public offering and will be laying all options on the table," Simsek said in remarks carried by semi-official Anatolia news agency.

He said the Turkish privatisation agency will initially work to establish a state company to manage the offer that includes almost 2,000 kilometres of toll roads and two bridges connecting Europe and Asia.

"Then we could go ahead with the public offering, but we are at the beginning of the research," he added.

The decision to cancel the giant privatisation tender won by a tripartite consortium in December came on Friday after a meeting of the privatisation agency headed by Prime Minister Recep Tayyip Erdogan.

Explaining the decision, Simsek said the winning bid of $5.72 billion (4.3 bn euros) placed by consortium of Turkish Koc Holding, Malaysia's UEM Group Berhad and Gozde Private Equity was too low.

On Saturday, Erdogan said the winning bid, which would have been the second largest in Turkish history, was so low that "it would have been treason" to give it the green light.

"There won't be a block sale but rather a public offering," he said.

Observers said the cancellation could backfire on the government, which has been trying to attract foreign investment for several multi-billion dollar projects, including those for a total refurbishing of Turkey's largest city Istanbul.

Last month, Turkey launched a major tender to build Istanbul's third and largest airport, which has so far attracted 15 companies, "some of them very powerful", according to Erdogan.

Experts feared the cancellation could cause a loss of faith by investors on whom Turkey depends for growth.

The consortium made up of Turkey's biggest conglomerate and its Malaysian partner had won the tender in December to operate the toll roads and bridges in one bundle for 25 years.

Turkey's most expensive privatisation deal was sealed in 2005 when 55 percent of Turk Telekom was bought for $6.55 billion.

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