Can Erdogan push for his “crazy project” in the midst of an economic crisis?

Jul 22, 2020

Although no tender date has been set for the construction of the controversial Istanbul Canal in Turkey, a project called “crazy” by Turkish President Recep Tayyip Erdogan in 2011, the buying frenzy of land in the northern regions of Istanbul has already turned into racing.

Ignore the serious urban and environmental concerns mainly expressed by the mayor of Istanbul Ekrem Imamoglu, a member of the main opposition, the Turkish government maintains the hype as a tool of political propaganda. The finances of the project and its economic model remain a mystery, but the rezoning and land speculation works near the artificial waterway are in full swing.

Experts say the planned canal would be little used as a waterway in terms of reducing tanker traffic in the Bosphorus Strait. Still, the project proved useful for price increase in the area as the Ministry of Environment and Urban Affairs continues zoning work. Land purchases in the region have come under increasing media scrutiny over the past year following reports that Emir Moza bint Nasser – mother of the Qatari Emir – and some Turkish ministers, including Erdogan’s son-in-law, Finance Minister Berat Albayrak, are among the buyers. The large purchases also led to a further rise in land prices.

Although Erdogan has kept the project buzzing around for nine years, the project still lacks any kind of concrete construction and business plans aside from a draft timeline announced by government officials.

In January, Transport and Infrastructure Minister Cahit Turhan said construction work on the project would begin in 2020 and would be concluded by 2026. He also said that the project’s bidding, bidding and procurement processes will be completed in less than a year. Therefore, construction work, including excavation and earthworks, is expected to be completed in six years, by February 2026. The canal would be 43 kilometers (26.7 miles), 100 meters (328 feet) long. ) wide and 25 meters (82 feet). Deep.

The economic model of the project remains unknown. The business model of public-private partnership – the one implemented in the government’s other megaprojects, including the Third Bosphorus Bridge and Istanbul’s New Airport – seems very inapplicable for the Istanbul Canal because it offers little profit and attraction for the private sector. The public investment model, meanwhile, does not seem viable given the rapid growth of budget deficits and public debt in the Turkish economy.

However, these difficulties which weaken the prospects of the project did not prevent the preparations of the government to build a new city in the north of Istanbul. The Ministry of Environment and Urban Affairs officially added the project to Istanbul’s urban development plan at the end of 2019, modifying the original Istanbul Municipality project. The ministry then approved the structural and land use plans for the project and made them public on July 2 for a one-month procedural objection period. The ministry’s decision to change the designation from acres of farmland to commercial plots sparked new fury about the project.

Although no concrete steps have been taken to build the canal, the government’s decision to build a new town in the region has drawn public attention to zoning plans, land purchases and soaring prices. Land title records for the area where the waterway would be open, stretching from Durusu on the Black Sea coast to Lake Kucukcekmece on the Sea of ​​Marmara, have witnessed an unprecedented level of buying and selling. sale. Some farmland has changed hands more than 10 times in eight years, according to one report. Citing official data, Sozcu reported that land transactions in villages in these areas have rapidly intensified as demand has quintupled prices. There are reportedly several large companies among the buyers, as well as prominent local and international personalities.

The project area includes 8,300 plots of land; 71% of them are private property and 7% belong to private companies in partnership with public entities. In 2014, the area of ​​350 million square meters (approximately 86,500 acres) was declared a reserve construction area under a Cabinet decision. Half are residential areas, protected areas and Istanbul’s new airport, while the other half has not been zoned. Controversial zoning work is currently underway in this area.

Zoning plans made headlines in Turkish media this month when 44 acres of land which was reportedly bought by the mother of the Emir of Qatar last year has been rezoned for trade in the final plans. As a result, some 22,000 square meters (5.4 acres) of land, once designated as agricultural, could now accommodate business centers, shopping centers, hotels, restaurants, banks and financial institutions.

Another large portion of the land which has also been rezoned as commercial and residential belongs to Albayrak. In an attempt to minimize the purchase, Albayrak’s attorney, Ahmet Ozel, described the investment as an “ordinary transaction” in January, saying the Albayrak family already owned plots of land in the area that had were purchased in 2003, long before the canal was introduced. project. Still, the ministry’s decision to rezone the area has raised eyebrows in opposition circles.

Regardless of the uncertain prospect that awaits the Istanbul canal project, the on-going substantive work indicates that the government is determined to carve out an alternative city for itself in the region. Many fear that such a new colony could turn Istanbul – Turkey’s largest city with over 15 million people – into an even more amorphous and gloomy metropolis.

In addition, the pandemic-stricken Turkish economy lacks the public resources and private willingness to shoulder the infrastructure costs of the potential city. The municipality of Istanbul and civic groups opposed to the project are fighting it by filing lawsuits one after the other.