A consortium of South Korean and Turkish construction firms raised 2.3 billion euros ($2.8 billion) from a group of about 20 banks and an export credit agency to build a suspension bridge and toll roads in western.
The joint venture between Daelim Industrial Co. Ltd., SK Engineering & Construction Co. Ltd.,Limak Holding AS and Yapi Merkezi AS raised about half of that amount from banks. South Korea’s Export-Import Bank will provide the export credit agency portion of the financing for the 3.1 billion-euro project.
Industrial & Commercial Bank of China Ltd., Bank of China, Intesa Sanpaolo SpA and Siemens Bank GmbH are among international lenders on the loan that’s expected to be signed in mid-March, the sources said. Six Turkish banks including Turkiye Is Bankasi and Turkiye Garanti Bankasi will also provide the loan.
The Korean and Turkish construction joint venture last March signed a contract with Turkey’s highway and toll road authority to build a 2,023-meter-long suspension bridge across the Dardanelles strait and about 80 kilometers of connecting roads. The group will operate the infrastructure for just over 16 years before transferring it to the government. The consortium finalized the deal to build the 3.6km suspension bridge over the Dardanelles Strait between European and Asian Turkey.
A ceremony was attended by Korean transport minister Kang Hoin, who was visiting Ankara to promote Korean companies’ expertise in large-scale infrastructure projects. Yesterday he signed a memorandum of understanding on railroads, roads, research and development, according to the Turkish state Anadolu agency.
The Korean team had been expected to win the build, operate, transfer contract since the end of January. Its main advantage was that it had offered to recoup its expenses and hand the bridge back to the Turkish government in 16 years, less than its rivals.
“The Canakkale 1915 Bridge can facilitate the country’s transportation. This project will enable Turkey to show its geopolitical position, natural beauty and cultural richness to foreigners,” Kang said.
He added that Korea was ready to help Turkey improve its economic growth by improving its level of technological development and “modifying the structure of its industrial sector.”
Ahmet Arslan, the Turkish minister of transport, told Anadolu Agency that Turkey was hoping to learn from Korea and then to use its knowledge to improve the competitiveness of Turkey’s construction industry.
“We will develop technology, which is essential for these kinds of megaprojects, by constructing the worlds biggest bridge,” he said. “After completing this, we will be able to do similar projects in all around the world.” Three other consortiums were in the running for the Canakkale bridge.
A team made up of IHI and Itochu of Japan and Makyol and Nurol of Turkey offered $2.72bn, with a 17 year, 10 month lease. A consortium made up of China Road and Bridge Consortium and Cengiz and Kolin of Turkey bid $2.67bn with an 18 year, eight month lease. Astaldi of Italia and Ictas of Turkey bid $3bn with an 18 year, five month construction and lease time.
The consortium will build and then operate the Canakkale suspension bridge, which will link Lapseki to Gelibolu districts of Canakkale, for 16 years and two months to collect its investment before transferring ownership to the Turkish government.
"We competed hard to become a preferred bidder," a Daelim official said. "We are glad that the Turkish authorities recognize our engineering, construction expertise and knowhow about building suspension bridges. As the leader of the consortium, we will do our best to successfully undertake the job."
Daelim built the Yi Sun-shin Bridge and many other suspension bridges in Korea over the years, accumulating advanced knowhow in the field. This extensive track record enabled the consortium to secure the contract from the Turkish government, according to the official. In addition, SK has been implementing a number of infrastructure developments in Turkey, establishing an extensive business network with government officials and corporate leaders.
SK opened a 5.4-kilometer undersea tunnel, linking Europe and Asia across the Bosphorus strait of Istanbul, last December. The builder opened the Eurasia Tunnel three months earlier than initially scheduled, displaying its superb construction capability, the company said.
Following the latest 3.5 trillion won contract, SK, Daelim and other Korean builders expect to win more orders in Turkey and other countries. Korean construction companies garnered many lucrative overseas contracts in the late 2000s and early 2010s, but they have struggled in recent years.