The puzzle of Turkish river privatisation

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Desperation appears to have led the Turkish government to consider the possibility of privatising its rivers. It is likely to encounter stiff opposition if it goes ahead.

While the water levels behind Turkey’s main dams are decreasing day by day (Ankara’s have now dropped to less than 3%), and frequent water cuts in major cities seem inevitable, various kinds of alternative solutions are being sought by politicians, local authorities and bureaucrats. A recent statement by Hilmi Güler, Minister of Energy and Natural Resources, has opened up a new debate over the possible privatisation of rivers as a tool to achieving more effective management of water resources.

Reactions to Güler’s initial statement began to circulate after an article appeared in a Turkish daily newspaper. Although no roadmap has been announced for the potential river privatisation, it seems that several points were deliberately disclosed to test the waters. Güler’s introductory declaration made it clear that the process would be based on a series of long-term BOT (build-operate-transfer) contracts. The bidding stage would be open to both domestic and foreign companies, and the rivers would be transferred to the private sector ahead of developing the project’s two subsequent phases: irrigation and drinking water.

The plan seems to centre around the privatisation of at least a dozen rivers, and, should it go ahead, it is expected to net the Government over $3 billion, half of which will be earned from the Euphrates and Tigris rivers alone. Provisional plans drafted by DSI (State Water Affairs) reveal that the operational rights of rivers like the Euphrates and the Tigris have been earmarked for privatisation due to their strategic status (there are huge dams providing electricity and irrigation services along both watercourses, for example). The Kizilirmak is also on the agenda for privatisation, according to Güler.

One of the main points of opposition to the plan derives from the fact that Turkey’s Electricity Generating and Transmission Corporation (TEAS) will have to pay the winning company or consortium higher tariffs than it does now for the water it requires to produce energy. Thus to most observers, privatisation would lead to a rapid rise in both energy and water tariffs.

In addition to the economic impact, the concept of privatisating natural resources in Turkey is likely to come up against opposition both from a legal standpoint and from the general public. Article 168 and Article 43 of the Turkish constitution cede the ownership of natural resources and their operating rights to the state. The Law on State Water Affairs is also in support of operating natural water resources via state intervention. In the existing legislation, it is clearly stated that operational rights are not transferable to private investors, let alone foreign companies.

Lobbyists representing agricultural interests, which consume 70% of the country’s water resources, claim that it is the state’s social responsibility to supply water. They assert that an agricultural society like Turkey would be fatally harmed if this were not the case. Furthermore, the lack of environmental protection is a primary reason for environmentalists to oppose the privatisation.

Despite these reactions, the government has neither renounced nor denied its commitment to privatising rivers. Indeed, privatisation has been a mainstay of the government’s attempts to reform the Turkish economy, and figures from the Turkish privatisation authority show us that from 1986 to 2007, privatisation added $29 billion to the national income, $22 billion of which has been raised in the past five years alone. Could this argument tip the scales in favour of pushing the necessary legislation through?