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Turkey Infrastructure Report Q1 2010Published by: Business Monitor International Published: Nov. 10, 2009 - 76 Pages Table of Contents
AbstractThis quarter BMI has introduced new data series for infrastructure and its subsectors (transport andenergy & utilities). This is an effort to address a significant deficiency in the availability of globallycomparable, infrastructure-specific indicators and forecasts across a wide range of countries. BMI's newinfrastructure data series enables users to quantify trends and growth patterns in the infrastructure sectorsof the 35 main emerging and developed markets out of the 62 countries in BMI's infrastructure service.According to our new data for Turkey, infrastructure industry value real growth for 2009 will contract by11.6% to reach TRY19.5bn (12.6bn). The contraction is symptomatic of reduced investments witnessedin both transport and energy and utilities throughout 2009. A strong recovery is in the cards though for2010 onwards, with infrastructure industry value registering annual average real growth of 12% to the endof our forecast period in 2014. Though energy and utilities infrastructure will contribute the lion’s shareto total infrastructure industry value, transport infrastructure will see quite a steep rise, claiming asignificant share of the total infrastructure value in the coming years. Accordingly, transport infrastructurevalue will register annual average real growth of 26% between 2010 and 2014, while energy and utilitiesinfrastructure industry value will register average annual real growth of 5.8% over the same period. Highspeedrailways, investments in ports from the new operators and the Izmit Bay Crossing project areprojects that will sustain value creation in Turkey’s transport sector in the coming years. We maintain the same forecasts this quarter, but note that risks are to the upside. The full-year figure for2008 came in worse than expected at YTL44.8bn; we were forecasting YTL46bn. The real growth rateaccording to the statistics institute was -7.6% for 2008 (probably due to the very high raw-material pricesthat eroded industry real value). In BMI's Q110 Turkey Infrastructure Report we maintain our forecast ofindustry value of YTL44bn for 2009; this represents a real growth decline of -9.4%. Our confidence aboutthe viability of new investments in infrastructure, however, is evident from the anticipated robustrecovery of the industry in 2010, when we forecast that the construction industry value will reachYTL47.6bn, or a real growth increase of 3.6%. BMI's Project Finance Rating for Turkey is 42.9, which places the country at 14th place out of 16 inCentral and Eastern Europe. The lira’s volatility and high inflation expectations are factors thatconsistently keep the country’s score down and pose the greatest threat to project finance operations inthe country. Another risk, pertinent especially in the energy and utilities sector, is price risk. Turkey hasbeen charging among the lowest electricity tariffs in the region, which has proved to be a disincentive forinvestors to become involved in creating new capacity. This is especially so in renewables, where aspiringinvestors have been deterred by the lack of a clear pricing structure. However, it should be noted that thegovernment has introduced successive tariff hikes in recent months and a new variable pricing regime fordifferent renewables, which is why we consider the price risk to be secondary to forex and inflation risks. Until the latter abate, we do not expect Turkey’s position in the regional table to move much. Get Full Details About This Report >> |
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