Turkish Dam Loses European Creditors

August 7, 2009 NY times Online Edition
Defenders of archeology and the rights of Kurdish villagers may have trumped Turkey’s quest to build a massive hydroelectric dam.
In July, German, Swiss and Austrian creditors backed out of the $1.7 billion Ilisu dam project amid a flurry of protests.
The government-backed creditors claim Turkey failed to meet 80 percent of the roughly 150 contract obligations needed to bring the project up to World Bank standards.
This marks the second time the deal has been threatened. In 2001, local opposition groups and non-governmental organizations in Europe helped force a British-backed consortium to renege on the deal before a new German-led consortium, swayed by lucrative construction contracts, signed on to bankroll the dam in 2007.
But loud protest over Turkey’s inability to meet environmental standards, along with an inadequate plan for relocating over 11,000 villagers and protecting precious archeological sites — including the 10,000 year-old village of Hasankeyf — appears to have nixed the deal again.
“We had the impression that the Turkish government was playing a game with us a little bit,” said Erich Stather, state secretary of Germany’s Federal Ministry for Economic Cooperation. He said Turkish officials were vague about meeting contract obligations and made it impossible for his ministry to visit villages slated for flooding without a military escort.
Nonetheless, the Turkish government is pushing ahead with the 1,200 megawatt dam.
The environment minister, Veysel Eroglu, was quoted in a Swiss news report as saying the creditors’ decision was political. He pledged that, if forced, Turkey would bankroll the dam with its own money.
Turkey’s rapid industrialization is driving a flurry of new dams. Currently 148 dams are under construction and plans for 1,400 more are on the books, as a way of tripling the nation’s hydroelectric capacity.
In the past, Turkey has steamrolled over opposition to its major dam projects. But the forcible relocation of Kurdish citizens is a sensitive issue abroad. And according to Erkut Erturk, the campaign coordinator for Doga Dernegi, the leading Turkish opposition group against Ilisu, the European creditors also backed off in part because Turkey started construction without informing them.