LEAGUES ACROSS THE SEA

Turkey 2014 | TRANSPORT & INFRASTRUCTURE | B2B: THE MARMARAY PROJECT

The Marmaray, Istanbul's trans-Bosphorus rail link, finally opened to passengers in 2014. The companies involved in the project are now turning their attention to new local mega projects.

Kerim Kemahlı
KERIM KEMAHLI
CFO
Nurol Holding
Toru Ueda
TORU UEDA
General Manager of Business Development
Taisei Turkey

What was the significance of the Marmaray project for your company?

KERİM KEMAHLI The answer to Istanbul's traffic problem lies underground. No underground system in Istanbul would work if it did not connect the two continents together. Just one wouldn't work; we have to have two or maybe three more. However, this was the first underground connection, so it will always be a historic project in that sense. I believe that the Marmaray is probably the most important project ever undertaken in this country. It might not be the most expensive or the largest, but linking the two continents together was certainly important. The project needs to be extended. For Nurol, to have been one of the three main contractors on the project is something that we will always take pride in.

TORU UEDA The tunnel has been a dream of the Turkish people for decades. We believe that it is very important that this dream was realized together with the Japanese government and private firms. The Marmaray project was a very challenging and prestigious undertaking, not only in Turkey, but worldwide. The project cost around $1.7 billion overall.

How is the Gebze-Izmir highway project progressing?

KK The Gebze-Izmir project is going very well indeed. We are around five months ahead of schedule at the moment, and expect the bridge to be opened by the end of 2015, whereas our mutual agreement with the highway authority is until June 2016. Right now, it seems like it will be opened by January 2016, but we will try hard to get it open by the end of 2015. The bridge is the main centerpiece of the project that crosses the Gulf of Izmit. This bridge has its legs in the water, unlike the other Bosphorus bridges. The longest bridge on the Bosphorus is 1.7 kilometers long and ours is 2.7 kilometers long. I believe it will be the second longest suspended bridge in the world. It is another huge task. We had a subcontractor build it, IHI, which is a Japanese company. It built the Akashi-Kaikyo Bridge, which is the longest in the world. By the end of 2015, our plan is to link Istanbul to Bursa, then, from 2015-2018, we will build the rest from Bursa to Izmir; hopefully, it will be fully operational by 2019. The other aspect of the Gebze-Izmir project is the financial one. It has been Turkey's biggest-ever project to finance to date. Because of its scale and magnitude, we divided the project into two in terms of financing. That is why we are now building the highway to Bursa, after which Phase II will go from Bursa to Izmir. So far, we have put together the financing for Phase I, and later in 2014 we will go back to the financial market to look for Phase II funding. It is also one of the first financial structures using the Treasury Debt Assumption model—the first being the Eurasian tunnel, which is very close to our Marmaray tunnel.

Beyond the Marmaray Project, what other types of projects is Taisei looking at in Turkey?

TU Turkish contractors are very strong in both the quality of construction and tender prices and can do almost all types of projects without support from foreign companies. We need, therefore, to focus on the technical expertise needed for larger projects. Most large-scale projects will be developed using the build-operate-transfer (BOT) model, meaning the contractors themselves invest the money, construct the project, and recover the money by operating it for around 20 to 30 years; I think this is the best model for the economy as it doesn't put a burden on the government budget.