A $20bn canal to nowhere? Yet another Turkish megaproject is dividing society
In April 2011, Turkish leader Recep Tayyip Erdogan laid out his vision for a nearly 50-kilometre canal linking the Marmara and Black seas parallel to the Bosphorus Strait, some 20km to the east. A decade later, after countless stops and starts, Turkish officials expect to break ground next month on the $20 billion project, which Mr Erdogan himself describes as “crazy”.
Many others might agree. Leading the charge is Istanbul Mayor Ekrem Imamoglu, widely seen as Mr Erdogan’s main challenger in the next presidential vote, set for 2023. Nearly three of every four Istanbul residents concurs, according to a 2019 survey. Istanbul is one-fifth of Turkey’s population and more than one-third of its gross domestic product. But the economy has been stagnant since a mid2018 currency crisis, with a steadily declining lira, massive debt and high inflation and unemployment. The pandemic has driven more than 1.5 million Turks into poverty.
Mr Erdogan has vowed to go ahead with the canal, arguing that it will attract foreign investment and spark economic activity. Top officials and wealthy foreigners have reportedly snapped up land along the planned route, leading to a sharp increase in prices.
The government estimates the canal will generate $5bn in annual fees and curb traffic on the Bosphorus, which sees three times as many ships as the Suez canal. But critics worry that it will destroy farmland and the coastal habitats of many species.
Yet due to sharp turns, narrow stretches and currents, accidents on the strait do happen. In 1999, a Russian tanker split in two near the mouth of the Bosphorus, spilling 1,500 tonnes of oil that contaminated nearby beaches for two years. Last month’s lodged container ship in the Suez Canal, which cost Egypt millions, seems a decent advertisement for Canal Istanbul.
The 1936 Montreux Convention ensures free passage for civilian vessels through the Turkish Straits, while giving Turkey considerable control over naval vessels of non-Black Sea states. Justice and Development Party (AKP) officials have claimed Turkey could void the convention with a new canal. Unlikely, given Russian President Vladimir Putin has said that Montreux is a red line.
Some estimate that vessels normally wait an average of 20 hours to transit. If true, firms would have incentive to pay for speedier transits through the straighter and wider new canal. Mr Erdogan might also be driven by ego. Istanbul has long appealed to leaders looking to cement their legacy.
Bringing this project to fruition would be the capstone on the Turkish President’s rise from the rough streets of Kasimpasa to unsurpassed greatness. “Istanbul will become a city with two seas passing through it,” he proclaimed in 2011.
After taking power in 2003, Mr Erdogan took control of the public housing agency, TOKI. Over the next decade, construction in Turkey leapt fivefold as building became an economic driver and electoral tool. “TOKI builds many kinds of projects to win voters,” economist Mustafa Sonmez told me in 2013. “Sometimes a mosque, a stadium, sometimes military compounds and malls – whatever’s needed.”
Mr Erdogan launched one mega-project after another: a third bridge across the Bosphorus, the world’s largest airport, a mosque looming over Taksim Square. His construction-focused agenda is one of his most successful schemes, and one of his most despised.
The boom was backed by his base and the AKP inner circle, many of whom reportedly profited from contracts worth billions. It also inspired his largest wave of opposition. In mid-2013, millions of Turks joined weeks of nationwide demonstrations that initially began to protest the razing of Gezi Park in central Istanbul.
A decade later, one wonders if Turkey’s leader should have paid more mind. He always argued that the new airport, bridge and canal were key to his vision of boosting Turkey’s prestige and raising GDP to $2 trillion by 2023. The centennial of the republic is now just two years away, but the Turkish economy is more than 60 per cent short of that target.
Meanwhile, the projects that have been completed look like boondoggles. Istanbul Airport opened in April 2019. Less than a year later, and weeks before the pandemic cratered the travel industry, China’s ICBC bank was in talks to refinance $6.2bn of its loans.
The third Bosphorus bridge and adjoining Marmara Motorway opened in 2016 and soon under-performed to the extent that the Italian-Turkish consortium overseeing them walked away. Now Turkey is preparing to make a Chinese consortium the majority owner of the bridge and motorway, according to ANKA Review columnist Aygen Aytac.
Beijing is suddenly all over Mr Erdogan’s prestige projects. China’s two largest port operators are the majority owners of Istanbul’s Kumport, which is conveniently located on the north-western rim of the Marmara Sea, near the southern end of the planned canal. Top Chinese tech firm ZTE owns 48 per cent of Turkey’s top telecoms firm, which oversees communications at Istanbul Airport, close to the planned canal’s northern end.
Last week, six Turkish banks, including the country’s three largest private banks, said they were unlikely to invest in the canal due to environmental concerns. This followed news that Chinese banks are considering a multi-billion-dollar investment in the planned canal, which would be incorporated into Beijing’s expansive Belt and Road Initiative.
Due to economic troubles and waning AKP support, the likeliest outcome for Canal Istanbul may be the bridgeto-nowhere scenario, under which construction would begin but then pause indefinitely if Mr Erdogan is voted out. But even if the canal does come to fruition, it may come to be seen not as Mr Erdogan’s crowning glory, but as an early sign of China’s conquest of the great Ottoman capital.
Nearly three out of every four Istanbul residents are against the project to build a new 50km waterway