ECONOMY

Turk power grid tender

ANKARA – Turkish Finance Minister Kemal Unakitan said on Friday he knew of no plans to cancel a tender for the sale of three electricity grids, in comments that seemed to contradict the prime minister. The sale, which is part of Turkey’s IMF-backed privatization program, has attracted strong interest from some of Europe’s biggest utilities. Turkish newspapers quoted Prime Minister Tayyip Erdogan on Friday as saying he did not want to press ahead with energy privatization for now because voters would blame the government for higher electricity prices. Turkey faces elections in 2007. Asked about the reported remarks, Unakitan said: «I have not yet spoken with the prime minister. I have no information regarding his words about electricity privatization.» «There is no cancellation decision at the moment on the electricity distribution tenders,» he told reporters, adding that he expected to discuss the issue with Erdogan in the next few days. Companies interested in buying the grids must submit their bids on January 19. The grids serve the capital Ankara, the Asian side of Istanbul, Turkey’s business hub, and the land between the two cities. A senior Energy Ministry official told Reuters on Friday any cancellation of the sale would harm Turkey’s image and erode the trust of foreign investors. «Whatever the actual words used (by Erdogan), they must not include the three grids (slated for sale),» the official said. Newspapers quoted Erdogan as saying, on a flight home from a trip to Lebanon: »We are not thinking of energy privatization at the moment. If we leave electricity distribution to private hands, citizens will blame us when prices go up.» An official at Erdogan’s office confirmed the prime minister’s remarks but could give no further details. Turkey’s privatization administration had no comment. Commitment The sell-off of the grids is part of a wider privatization drive by Erdogan’s center-right government under a $10 billion funding deal with the International Monetary Fund. In a letter of intent to the Fund for the fifth review of its loan deal in November, Turkey reaffirmed its commitment to press ahead with the sale of the three grids. It eventually plans to sell 20 electricity grids. The sales of the grids are partly aimed at reducing illegal electricity consumption, which is estimated to account for about 19 percent of the country’s output. Despite the approach of elections – Turkey’s parliament must also select a new president in May – the government insists it will avoid any populist measures aimed at currying favor with voters that could hurt Turkey’s economic stability. A total of 37 companies and joint ventures have applied for pre-qualification in tenders for the sale. These include Italy’s Enel, Spain’s Iberdrola, France’s Suez-Tractebel, AES of the United States, Germany’s E.ON and Edison-SpA.