ECONOMY

Turkey proceeds with sell-offs in telecommunications, energy

ANKARA (Reuters) – Turkey’s Communications Minister Oktay Vural yesterday reiterated a pledge to complete plans for the sale of landline monopoly Turk Telekom in June as promised to the International Monetary Fund. Markets are concerned about delays in various reforms under Turkey’s $16 billion loan pact in recent months, particularly since Prime Minister Bulent Ecevit was admitted to hospital last week, sparking fears of an administrative vacuum. But speaking after a meeting with a visiting IMF inspection team that is reviewing the loan pact, Vural said the government was working hard on the privatization plans. «Probably within the month of June we will have completed a road map for Turk Telekom,» Vural told reporters after meeting IMF Turkey desk head Juha Kahkonen. He said the government would keep working on the plan until an IMF board meeting to approve the latest $1.1 billion tranche of loans expected to be held in mid-June. Vural said he had told the IMF team that any necessary changes to the law for the privatization could be brought to Parliament in October. Turk Telekom is due to be restructured as a holding company ahead of the sell-off, which has been on the agenda since the early 1990s but delayed several times due to political wrangling and poor market conditions. Vural said that under the new company structure Turk Telekom was expected to be divided into six separate divisions, and it was possible that they might be privatized separately rather than through a block sale of the whole company. Economy Minister Kemal Dervis approved two new appointments to Turkey’s telecoms supervisory board on Wednesday in a move that should help facilitate the privatization. Interest in BTC Vural also said Turk Telekom was thinking about bidding for Bulgarian state telecoms operator BTC in partnership with the private sector. Turk Telekom announced in April it was interested in purchasing the firm, and sent a team to the Bulgarian capital Sofia ahead of a planned privatization that EU aspirant Bulgaria says is needed to raise money for its cash-strapped economy. «It (Turk Telekom) is considering presenting an offer for BTC with the private sector,» Vural said. Bulgaria has set a deadline of June 10 for bids to be submitted for the telecom monopoly. The BTC sale is Bulgaria’s biggest privatization deal this year. Energy sell-offs Privatizations are proceeding in other sectors as well. The Turkish Energy Ministry has put up for sale its first batch of power plants and distribution grids in a second attempt to shift energy assets. The government pledged to the IMF that it would transfer the assets of all state-owned thermal generation and distribution plants to the privatization administration by the end of July. «We will transfer all grids and power stations to the administration by the end of May,» a senior energy ministry official said. The Energy Ministry transferred six power stations and nine distribution grids to the Privatization Administration last week.