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Mar 28 2008
Supplied or written by Global Water Intelligence (March 2008)

Turkey has been shaken by the ongoing investigation into the
privatisation of water and wastewater services in the northwestern city
of Edirne. The operation started after local police completed four
months of wiretapping a number of people in connection with crimes
committed in the handing-over of the management rights to Edirne's water
and wastewater treatment facilities. Nineteen people were taken into
custody as a result of the local prosecutor's directive on 8th March.
Those arrested included Edirne's controversial mayor Hamdi Sedefci,
representatives from companies involved in the tender, as well as Ahmet
Ozal, a former MP and son of former Turkish president Turgut Ozal. Ozal
and six other suspects were released on 10 March.

The case has attracted a lot of attention due to the wide range of
coinciding themes. Private sector participation lies at the heart of
Turkey's water future, but like many other preceding examples,
corruption seems to have become a central component in this process. The
involvement of a high-profile figure such as Ahmet Ozal, combined with
Mayor Sedefci's past judicial record concerning corruption and bribery
in 2001, have elevated the magnitude of the case in the eyes of the
Turkish public. The fact that local elections are scheduled to take
place in early 2009 also adds gravity to the circumstances. Last but not
least, the Edirne case is a perfect example of how Turkish public
opinion remains wary about private sector involvement in water services.

The origins of these latest events can be traced back to 2007, when
Mayor Sedefci decided to involve the private sector in the running of
Edirne's water services for a period of 30 years. The estimated value of
the project was $40 million, and involved the replacement of old water
meters with new ones, in order to implement an advance payment system.
The tender took place on 14 February 2008, and was won by a consortium
of three companies (Elektromed Elektronik Sanayi ve Saglik Hizmetleri,
Tekno Yapi Insaat Sanayi ve Ticaret AS and Yerel Yonetim Altyapi ve
Aritma Yatirimlari Sanayi ve Ticaret AS).

According to local press reports, the police moved in after wiretaps
purported to show shady links between municipal officials and company
owners. For example, the consortium managed to place one of their
employees into the municipal department, which subsequently prepared the
tender conditions so as to be in favour of the three companies named
above. Meanwhile, press coverage based on leaked interrogation accounts
of the suspects reveal that company owners contacted Mayor Sedefci to
fix the deal. Sedefci strenuously denies the allegations.

As part of the investigation process, Ahmet Ozal was detained in
Istanbul on charges of acting as a mediator between the companies and
the municipality. Turkish daily Hiirriyet reported that Ozal had met
with the contacts in Qatar and Dubai to try and drum up financial
support, and when asked about his part in the affair, Ozal told
journalists: "The government will form a brand-new water ministry. Water
services in more than 3,000 municipalities will be privatised. This will
create a new market of $90 billion. I tried to use my connections to
attract foreign investment." Turkish media leapt on the fact that the
consortium that won in Edirne had asked Ozal to find investors who could
provide them with the necessary cash for a boom which, in Ahmet Ozal's
own words, is "as important as the entry of GSM into the Turkish
market". The investigation further revealed that the Edirne consortium
planned to use corrupt means to influence the privatisation of water
services in nine other cities.

Mayor Sedefci announced the cancellation of the tender on 5th March,
ostensibly as a consequence of local public pressure against
privatisation. With the investigation still underway, it is hard to know
whether or not this was genuine, yet the public backlash is real. A
platform organised to unite local opposition against water privatisation
in the city, called "Edirne Water is Life Platform", includes
representatives from more than 50 local NGOs and other bodies.

The question remains as to what the knock-on effect of the Edirne case
will be in enabling local authorities to involve the private sector in
the provision of water services in Turkey.



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