The Turkish government is committed to moving forward with the construction of the multibillion-dollar giant Kanal Istanbul project, the transportation minister has said, informing that companies from Benelux countries have shown a big interest in the project whose planning stage is about to be concluded.
“Our talks for financing are underway. The Chinese are interested, but the most interest in the project is shown by Benelux countries. They have business experience and a technology basis in this field,” Transportation Minister Cahit Turhan told the Hürriyet Daily News on Nov. 15 during a visit to the Demirören Media Center in Ankara.
Turhan has said that the planning stage of Kanal Istanbul is about to be accomplished before the government moves forward, with going out to tender for around $20 billion project.
With the project, the government is aiming at opening an artificial seaway between the Black Sea and the Marmara Sea in order to mitigate the oil tanker traffic through the Bosphorus as well as constructing new earthquake-resistant residential areas along the channel. Known as the “crazy project,” the Kanal Istanbul has been on the government’s agenda since 2011, but its realization has been delayed several times due to financial problems and environmental concerns.
If completed, the artificial seaway will be a 43-kilometer-long and 400-meter-wide canal crossed by six bridges. Environmentalists have voiced serious concerns about the artificial channel by arguing that the seaway will damage underground water resources of Istanbul and will threaten the Marmara Sea along with other social and urbanization risks.
“Kanal Istanbul is a transportation project and has to be realized. It’s necessary,” Turhan said, drawing attention to the increased shipping traffic through the Turkish straits, Istanbul and Çanakkale.
“Istanbul and Çanakkale can hardly handle the shipping traffic. The annual capacity of the Istanbul Strait is 25,000 tankers. But this figure goes up to 40,000. It creates major security concerns as the Istanbul strait is one of the most dangerous seaways for navigation,” Turhan recalled.
The rise of the Asian economies will result in more shipping from Asia to eastern and northern Europe via the Black Sea, the minister said, estimating that the annual number of tankers applying to use the Turkish straits would go up to 70,000 in the next decade.
“This is simply not possible. The Istanbul Strait cannot handle this.”
Suez and Panama channels
Recalling that both the Suez and Panama channels were built to meet the needs of the growing navigation, the transportation minister likened the Kanal Istanbul to these artificial seaways.
Although Turkey has imposed stricter regulations for the navigation of huge oil tankers from the Bosphorus for the use of harbor pilot, the 15-million populated city is facing a danger every day because of the shipping traffic.
The construction of the channel will minimize these dangers and will bring in money through the passage fee, he added. The government estimates that an around one-billion-dollar revenue would be generated annually.
Talks for financing continue
The project will be realized under three main phases. As the project will damage all the existing infrastructure in the region where the channel will be built, the first phase will lay out new transportation and energy routes as well as other infrastructural necessities. The second phase will build the channel and the final one will deal with the urbanization part of the project.
However, financing the project needs to be secured before hitting the road, the minister said. Some companies from the Benelux countries are interested and have told the Turkish government that they may provide necessary financing for the project, Turhan informed.
“This year, conditions for finding financing are much better than in previous years. Due to the negative interest rates, the European financing market is facing difficulty [in finding projects to finance]. We should take advantage of this situation,” he said.
The project needs around $20 billion financing in total, but the first phase of it requires around $5 billion, the minister stressed. “We will use this financing for the relocation of the existing infrastructure, including motorways, energy and transportation systems, etc., which would be affected by the construction. The first tender will be done for this,” he informed.
The tender would take place when all the conditions are ready and the planning stage is done, the minister said, informing that it could take place in 2020.
Hurriyet Daily News