Contractors saving Turkey
Turkish construction firms make
it big globally. What does that mean for Turkey’s economy?
Projects run by Turkish contractors have suffered over the last few years, dropping from a peak of $30 billion to below $15 billion. Companies have experienced huge market losses in many countries, especially Russia in the fallout of the fighter jet crisis. However, data announced by the Ministry of Economy has raised hopes of a new bullish trend this year. According to the numbers, projects worth $9.2 billion were signed in the first six months. If the trend continues in the second half of 2018, Turkey could chalk the year up as a success. The first, albeit tentative, signs of recovery came in 2017 with an increase of $1 billion. This year’s increase would make it a definite trend.
The relationship between two other factors have contributed to the positive outlook. While the number of countries where Turkish firms received jobs has decreased, from 265 projects in 2015 to 84 so far this year - the average project value has increased to record levels. This indeed is an important development because after 2015, the average project values were on a downward trend from $87 million that year to $73 million in 2016 and finally to $54 million in 2017. The average this year so far - $110 million - shows that Turkish contracting companies are receiving bigger jobs.
The average project value can jump with a single contract worth billions of dollars but this does not change the result. Also, the number of countries where Turkish firms are operating is on the decline, 57 in 2015 to 52 last year. In the first 6 months of this year, jobs were taken from only 18 countries.
What the numbers show is that Turkey’s contractors are more selective in the contracts they sign, looking for bigger projects in a smaller number of countries.
Newly-completed Kuwa t A rport br ngs new jobs for Ceng z
After signing important contracts successively, Turkish contractors have moved up to second place in the construction world after China. Cengiz Insaat, a Cengiz Holding subsidiary which began construction on the new terminal building at Kuwait airport 21 months ago and completed the project last week, is one company that has helped Turkey rise in the industry. The project was crucial for the Kuwaiti government: its existing terminal does not comply with international standards, preventing direct flights to the United States. The new terminal will now make those flights possible.
Speaking at the opening ceremony of the new airport, Cengiz Holding Executive Committee Mem- ber, Ugur Cengiz, said that the Kuwait government acted after Kuwait International Airport’s 6 million passenger capacity doubled in a few years. “Cengiz Insaat was invited to tender because of the important projects we have completed around the world,” Cengiz said. “The tender resulted in our favor because both shortterm results and quality work were expected. We won the tender with a $200 million proposal. We are proud to complete and deliver the terminal, normally a minimum 3-year project under normal conditions, in 21 months. Seeing that the airport was built so quickly and at such high quality, the Kuwaiti government also invited our company for new deals. Cengiz Insaat won a total of $160 million worth of tenders for upgrading the infrastructure of the city and another $90 million for a 50 kilometer highway job.”
The new terminal building, completed without cost overruns, is the biggest project for Turkish companies in Kuwait.