A tender to build Istanbul’s third airport, which Turkey says could eventually be the world’s largest, is expected to attract up to four bids, with limited foreign interest in the 7 billion euro ($9 billion) project, sources close to the matter said.
The government project reflects the growing importance of Istanbul, Europe’s largest city, as a regional transport hub in tandem with Turkey’s economic rise over the last decade.
Alongside already expected bids from TAV, which is partly French owned, and IC Ictas-Fraport, the sources said a consortium of Turkish construction companies Cengiz, Kolin, Limak, Mapa and Kalyon was set to bid in the May 3 tender.
Turkish conglomerate Sabanci Holding and construction company Enka Insaat were also working together on a possible bid, the sources said, adding that the size of the project and the technical difficulties which it entails were seen discouraging foreign interest.
“We think it would be a surprise if a bid is made by anyone apart from these four groups,” one source close to the matter said.
Quarries are located in the area near the Black Sea on the European side of Istanbul where the airport is to be built and filling them alone will cost some 2-2.5 billion euros, discouraging foreign interest, the source said.
At the start of the process, airport operators from Singapore, Britain and the Netherlands expressed an interest but there is no indication that any will take part in the tender.
The same source also said it would be difficult for new partners to join the project after the tender.
The companies involved and government officials declined to comment.
Turkey unveiled in January its plans to build the airport, which will have a total of six runways and eventually able to handle 150 million passengers per year.
Turkey’s transport minister said the airport would be the largest in the world in terms of passengers at full capacity, though it was not clear when this would be. Istanbul, the hub for flag carrier Turkish Airlines, is becoming a major regional hub, linking destinations in Europe and Asia.
The tender for the build-operate-transfer project, to be conducted in four stages, will be for a 25-year lease. An annual capacity of 90 million passengers is planned for the first stage.
The first stage of construction is expected to be completed in 3-4 years. But sector sources said it would be nearly impossible to finish the construction so quickly.
Among the expected bidders, TAV has the operating rights for Istanbul’s Ataturk airport, the country’s largest with some 30 million international passengers last year.
Operations at Ataturk are likely to be heavily scaled back when the third airport opens. Ataturk’s new international terminal costing hundreds of millions of dollars was opened only just over a decade ago, but a huge rise in air traffic through Istanbul has left it running at full capacity. The airport has only two main runways.
TAV has said the Turkish airports authority would compensate it for any losses if the third airport opened while it was still running Ataturk.
TAV also runs airports in Tunisia, Macedonia, Georgia, Latvia and Saudi Arabia. Among the other prospective bidders, Limak has also been involved in airport projects on the Asian side of Istanbul, in Egypt and in Kosovo.
Hamdi Akin, the chairman of major TAV shareholder Akfen, said earlier this month the company was not looking for a partner in the project, though it could consider a financing partnership later.
Bidders in the project are expected to provide around 1.5 billion euros in share capital, with project financing seen amounting to around 5 billion euros. ($1 = 0.7644 euros)