UEM: Outcome of Turkish bids soon

By Sharen Kaur

sharen@nstp.com.my

Published in NST on November 23, 2012

UEM Group Bhd may soon know the outcome of its bid for the privatisation of bridges and highways in Turkey.

The Privatisation Administration of Turkey (OIB) is expected to decide on the privatisation by year end, the group said.

Group managing director and chief executive officer Datuk Izzaddin Idris said UEM and its joint venture partners are in discussions with OIB on the bid they had submitted.

UEM's partners are Turkish industrial conglomerate KOC Holding and financial services firm Gozde Girisim Sermaesi Yatirim Ortakligi. UEM and KOC Holdings each own 40 per cent stake in the joint venture while Gozde holds the balance.

The three joint venture partners last month submitted a bid for the privatisation of two bridges over the Bosphorus Straits in Istanbul and seven motorways across Turkey.
The roads and bridges, which link Europe and Asia and span a total of 1,975km in cumulative distance, are being privatised in a single package for 25 years.

According to OIB's website, there are two other contenders for the privatisation of these assets. The first group includes Nurol Holdings, MV (Mustafa Vargi) Holdings, Alsim Alarko, Kalyon Insaat and Fernas Insaat.

The second consortium comprises Italy's Autostrade Per I'Italia SPA, Dogus Holdings, Makyol Insaat and Akfen Holdings.

"We can't comment further on the deal until it is concluded. We have been advised by OIB that they want a closure on this by the end of this year," Izzaddin told Business Times after the signing on the corporate adoption of CIMB-Principal's new private retirement schemes on Wednesday.

He said for project financing, the cash flow from the 25-year concession will drive the funding requirements.

UEM, via its engineering and construction division and expressway arm, has ongoing projects worth over RM9 billion.

They include contracts for klia2 and the Mass Rapid Transit packages V8 and S3, Penang Second Bridge, the Cikampek-Palimanan toll road project in Indonesia, and the Brunei national housing project.