Recent development

The much anticipated tender for the Kınalı-Savaştepe Motorway Project's Malkara-Çanakkale section - including the 1915 Çanakkale Bridge Project - has been announced by the Highways Department ("KGM"). Pursuant to the announcement published in the Official Gazette on October 26, 2016, bidders can submit their bids between January 19-26, 2017.

Tender Highlights

Key takeaways of the tender process are as follows:

  • Potential bidders can purchase the tender specifications from KGM headquarters in Ankara in exchange for TRY 100,000 as of November 2, 2016.
  • The project will be built according to the Build-Operate-Transfer model.
  • Bidders must fulfill certain criteria - such as the appropriate organizational structure, financial strength and experience - in order to qualify.
  • The implementation of the project will consist of the construction term and the operation term. The bidders will compete on the basis of duration for the operation term; the bidder submitting the shortest operation term will be awarded the tender.
  • The project is expected to benefit both from a traffic guarantee and debt assumption. Firstly, it was announced by the officials that the toll fee would be €15 plus VAT per vehicle. Secondly, the Turkish Treasury is expected to sign a debt assumption agreement.
  • Bids must be submitted by January 26, 2016 at the latest. In addition to the bids, the bidders will also be required to submit a bid bond in the amount of TRY 100 million (approximately USD 31 million).

Precedent Projects

The number of PPP projects has soared in the past few years. Over the last two decades, PPP models have been increasingly used across sectors, including energy, transportation and healthcare. The following precedent highway projects have been successfully tendered, implemented, financed and either have recently become or will soon become operational: (i) the Osman Gazi Bridge Project - as a part of Gebze-Orhangazi-İzmir Motorway (Otoyol 5) - which became operational on June 30, 2016; (iii) the Yavuz Sultan Selim Bridge which became operational on August 26, 2016; and (ii) the Eurasia Tunnel Project which is expected to become operational on December 20, 2016.

Conclusion

Turkey is about to add another mega project to its portfolio of infrastructure investments. Interested bidders should follow KGM's announcements and any impending developments regarding the project closely in order to ensure a smooth and successful tender and implementation process.

Please contact us if you have questions about the tender process.