The privatisation of Turkey's third largest private container port, Mersin Port, finally reached financial close last month - a landmark deal in the Turkish privatisation market

A PSA-Akfen consortium was awarded the contract to lease, operate and modernise port facilities at Mersin from the Turkish Republic State Railways (TCDD) - which owns of a number of ports in the country.

Mersin International Port [Transactions Database] was launched earlier this year. A consortium including EIB-LIMAS and Hutchison Port Holding won the auction on 3 May 2007 to lease the port of Izmir for US$1.275 billion over 49 years.

The other bidders in the project included:

• Celebi Holdings
• PSA - including Akfen and Babcock & Brown
• consortium of Baticim Bati, Limak and Alsancak

Turkish firm Celebi Holding was the only single-entity bid.

Legal action from Liman-Is is threatening to hold up the Izmir process.

The port of Derince, located east of Istanbul, is also scheduled for privatisation in August or September 2007. The publication of the auction documents is expected in the coming months.

Conclusion

In recent years, the privatisation market in Turkey has been active in ports, as well as in airports and some parts of the railway network.

The long overdue transaction for Mersin Port should have taken place in August 2005. However, the financial close and official takeover by the consortium from Turkish state authorities is another significant milestone in Turkish transport.

Last week MIP announced plans to spend US$500 million to modernise the port of Mersin.

MIP will provide container, roll-on/roll-off, general cargo, warehousing and maritime services for the whole of Mersin Port.

MIP has scheduled 75 per cent of the planned investment to be carried out over the next 10 years to increase annual handling capacity to 2.5 million TEU from the current 880,000 TEU.

A number of ports in Turkey have been privatised, but in terms of size Mersin is the first meaningful port to reach financial close. The concession will run until 2043.

The project at a glance