On November 14, 2015, the Privatization Authority adopted new
zoning plans for the Izmir Cruise Port and Izmir Cargo Port in
preparation for their likely privatization in the first half of
2016. The privatization is expected to be through a "transfer
of operational rights."
First privatization attempt
The privatization of Izmir Port, Turkey's largest commercial
port, was first initiated in 2006 following the privatization of
the Mersin and Iskenderun ports. A consortium of
Global-Hutchison-Ege Ihracatci Birlikleri and Deutsche Bank
Infrastructure Fund, which offered USD 1.275 billion for 49 years
-- the longest period permitted under the Privatization Law, was
the successful bidder. After multiple legal challenges, however,
the privatization of Izmir Port was cancelled.
Preparations for privatization
To leverage the benefits from cruise tourism and the substantial
export potential given the port's highway and rail connections,
the Privatization Authority split the port into two, creating the
Izmir Cruise Port and Izmir Cargo Port, in 2012. In spite of
this separation, the Privatization Authority is expected to
privatize both ports together to a single investor. The
Privatization Authority's specific plans will be clearer once
the tender specifications are published.
Under the Izmir Cruise Port's new zoning plan, the
developable area of the facility has been decreased by
approximately 50,000 m2, leaving a developable area of 125,000 -
130,000 m2. To increase the port's capacity, two new piers will
be added. Hotels and small shops will be built to serve tourists,
in place of the shopping mall planned during the 2006
The 2006 privatization tender specifications also required the
successful bidder to dredge the port. For the upcoming tender, it
is expected that Turkish State Railways will be involved in the
dredging activities, although it remains unclear whether the
investor will have any related obligations.
Given the recent return of political stability and
predictability in the Turkish market, coupled with the updated
zoning plans, we expect the privatization process to commence
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