Privatizations in Turkey total $30 bln in 22 years (25.12.2007)

The government has privatized assets worth $29.9 billion from 1985 to 2007, the Chamber of Certified Public Accountants of Istanbul (İSMMMO) announced on Sunday.

During that the period, 7,400 suits were filed against these privatizations, according to a report titled ''Privatization Shadowed by Jurisdiction and Calendar of the Near Future.'' Close to 4,000 of the suits filed are ongoing, according to the report compiled by the Turkish Privatization Administration (ÖİB), the Undersecretariat of Treasury and the Finance Ministry.

Land speculation, creating annuity, neglecting duty, misconduct in office, destroying public resources, creating cartel and monopoly, creating unfair competition and loss of tax are among the articles cited in the suits.

Society has suspicions concerning the privatizations, said Yahya Arıkan, chairman of İSMMMO and vice chairman of the Unions of Chambers of Certified Public Accountants of Turkey (TÜRMOB). Privatizations that started in the 1980s with the discourse of selling off public economic enterprises that bear losses were oriented toward becoming profitable public economic enterprises in time, he said.

Over the surveyed period, $18.1 billion was collected via block sales while $4.7 billion was collected via plant and asset sales and $5.1 billion via public offerings, $1.2 billion via the stock exchange, $4.3 million via the sales of unfinished plants and $565 million via acquisitions.

Privatizations yet to come:

It is expected that approximately 15-25 percent of the remaining public shares of Türk Telekom and a part of public shares of Ziraat Bank and Turkish Airlines (THY) will be offered to the public at the stock exchange next year. An income of $11.8 billion is expected through privatizations of Halkbank, the state-owned cigarette manufacturer Tekel, electricity distribution, and transfer of management rights of bridges and highways.

Ziraat Bank and Halk Bank, which are on the privatization agenda, are currently among the institutions that transfer the largest amount of wealth to the Treasury. In 2006, dividends obtained from Halkbank were YTL 297 million. In the first nine months of 2007, Ziraat Bank delivered YTL 1.5 billion in dividends to the Treasury.

The report points out that despite high money inflow to the Treasury in the short run thanks to privatizations, dividend income and share of proceeds declined in the long run.

2005 privatization income:

The state obtained dividend income of YTL 2.1 billion in 2005 from Eti Mine, Telekom, State Supply Office, Coastal Safety, Turkish Petroleum Corporation (TPAO) and Postal and Telecommunications General Directorate (PTT). The state's income rose to YTL 3.4 billion with the influence of YTL 3.1 billion share of profit from Türk Telekom in 2006. However, with Türk Telekom's sale of 55 percent of its stake in 2007, the state obtained dividend income of YTL 989 million in the first nine months.

In 2006, the state obtained YTL 8.7 billion in tax-exempt income including share of proceeds and dividend income attained from public banks that are on the privatization agenda. This figure was YTL 5.9 billion in the first nine months of 2007.

Net profit of the period of the public economic enterprises owned by the Undersecretariat of Treasury and institutions in privatization program was YTL 1.4 billion in 2006. This figure was YTL 965 million in 2005.

SEK, Yem-Sanayi, Orman Ürünleri Sanayi (ORÜS) and Sümerbank were among the least successful tenders held by the Privatization Administration between 1985 and 2007.

Anatolia News Agency