Today’s Zaman, Turkey
May 23 2009
French companies hurt by strained ties
French companies continue to get hurt by French President Nicolas
Sarkozy’s `poke in the eye’ approach with Turkey as relations turn for
the worse with Ankara over increasingly vocal and fierce French
opposition to Turkey’s full membership in the EU.
`I had no idea this many French companies have been operating in
Turkey,’ said a cab driver shaking his head. Ã-zgür
Batı, 29, the son of a retired iron and steel worker from
Ä°skenderun, says he was irked by the French rebuff against
Turkey. `I would rather go and buy an Italian-made Fiat car rather
than the French-built Renault and Citroën,’ he stated while
cruising down the streets of Ankara to make a living.
In recent years, anti-French sentiment seems to have gained traction
and Batı’s feelings are shared by many in Turkey, with e-mail
circulating with lists of French companies and products to boycott.
French companies continue to be battered by French President Nicolas
Sarkozy’s `poke in the eye’ approach to Turkey as relations with
Ankara turn for the worse over increasingly vocal and fierce French
opposition to Turkey’s full membership in the EU. In a move that might
be construed as retaliatory measures in response to Sarkozy’s
overtures, Today’s Zaman has learned that Turkish officials are now
working on a stick-and-carrot approach and drafting a list of policies
and actions to stem French obstructions while conveying a tough
message to French corporations interested in doing business in Turkey
and adjacent regions.
French firms continue to be battered by Sarkozy’s `poke in the eye’
approach to Turkey
The latest victim was France’s energy heavyweight Gaz de France (GDF),
which was denied entry to the 7.9 billion euro Nabucco pipeline
project over Turkish objections last year. The 3,300-kilometer-long
Nabucco pipeline will carry Caspian natural gas to Central Europe via
Turkey and aims to reduce Europe’s dependence on Russian gas. In a
phone interview with Today’s Zaman, a Paris-based GDF official said
the company had no interest in Nabucco. Turkish energy officials beg
to differ. One government official told Today’s Zaman that GDF was at
first very interested in taking part in the Nabucco project because of
its large profit potential. Because of the French parliament’s stance
on Armenian genocide claims, Turkey blacklisted GDF during
negotiations. The company was not listed in the agreement signed in
Prague earlier this month. The blacklisting sent tremors across the
board among 768 French companies registered to do business in
Turkey. France is the
number one country utilizing nuclear power in electricity generation
in continental Europe and one of the leading countries in nuclear
energy technology in the world.
Two French power companies, Vinci Construction Grand Projets and
Suez-Tractebel showed interest in nuclear power tenders in Turkey last
year and purchased bid specifications. However, after rumors that
their bids would be rejected and that the government would effectively
block their entry, they did not submit their price offers in the
tender. French nuclear giant Areva had also announced its interest in
the construction of power plants in both the Akkuyu and Sinop
provinces.
The aftershock is not limited to the geographic landscape of Turkey as
Ankara is also reaching out to neighboring countries and privately
relaying its concerns on French involvement in multimillion-dollar
projects. Earlier in May, a joint venture between Turkey’s TAV and the
Athens-based Consolidated Contractors Company won a $1.17 billion
contract to expand the main airport in Muscat, Oman, pushing aside
French competitor Vinci. GDF’s recent expansion in Azerbaijan met with
local resistance after Ankara expressed uneasiness over deals GDF was
trying to advance in the energy-rich Caspian Sea nation.
In addition to the energy and construction industries, French
companies also took a beating in defense tenders. Even though France’s
Eurocopter was the top contender in the shortlist of the Turkish
military’s attack helicopter tender in 2006, it was vetoed and Italian
AgustaWestland was awarded the $1.5 billion deal instead. Nationalist
Movement Party (MHP) deputy and retired Gen. KürÅ?at
Atılgan told Today’s Zaman that the blockage of French
companies from defense tenders has continued.
Worst time for France
The duel between Turkey and Sarkozy’s France could not come at a worse
time. The hope for French companies in Turkey and in the wider region,
where Turkey plays an active role, seems to be fading faster than the
decline in France’s gross domestic product (GDP), which fell 1.2
percent on a quarter-to-quarter basis in the first three months of the
year — the third-worst figures on record since 1968.
With the French economy in recession since last year, contracting 3.2
percent in the first quarter of 2009 — the fastest drop since 1949 —
along with falling investment and exports, any tender won abroad might
give a glimmer of hope to French corporations and may help compensate
for low demand at home.
The trade volume between the two countries has also plunged sharply,
with imports from France declining 43.7 percent in the January-March
period compared to the same period last year and exports dropping 35
percent over the same period. The negative news, partly blamed on the
world economic crisis, is particularly worrisome for Paris because
France is registering a clear surplus in bilateral trade. In contrast,
however, a comparison between Turkey’s January-March figures and those
of the first quarter of last year shows that Turkey achieved a 76.7
percent increase in exports to Iraq, a 107.1 percent to Egypt, a 70.9
percent to Algeria, 33.3 percent to Syria and 50.8 percent to Libya.
Economic retaliation against French companies is nothing new. In 2001,
following France’s recognition of the World War I-era killings of
Armenians as genocide, Turkey excluded French companies from defense
contracts. Ankara cancelled a $259 million satellite contract with
Alcatel and blocked French state-owned arms maker GIAT, the maker of
Leclerc tanks, from a tank modernization tender worth some $7.1
billion. A road tender valued at $1.44 billion was cancelled because
the foreign partners of the participating consortia were
French. Ankara also blocked French companies from a grain tender.
Despite everything, some French companies still successful
The deterioration of relations with France started in 2006, when
France passed a bill making it a crime to deny that the mass killings
of Armenians under Ottoman rule during World War I constituted
genocide, a claim Turkey strongly rejects.
Yet Ankara at times resorted to a stick-and-carrot policy and provided
incentives to French companies as well in a move to show what could be
gained should France drop its objections to Turkey’s EU candidacy. GDF
Suez was awarded the $232 million tender for Ä°zgaz, Turkey’s
third-largest distributor of natural gas, in 2008 by the municipality
of Ä°zmit following a privatization bid.
Ä°zgaz owns and operates a 2,900-kilometer gas distribution
network in the Kocaeli region, one of Turkey’s most industrialized,
and has 200,000 residential customers. GDF Suez posted record growth
in the first quarter of this year thanks primarily to growing sales in
Turkey, which amounted to $20 million euros. GDF Suez and Turkish
engineering firm Mimag-Samko signed a memorandum of understanding last
year to develop, build and operate a thermal power plant in Turkey
with an installed capacity of between 800 and 1,300 megawatts. The
total investment in the project is estimated to be more than $1.5
billion.
Similarly, last year a Turkish-French consortium, Cengiz
Ä°nÅ?aat-Makyol-DoÄ?u&# xC5;?
Ä°nÅ?aat-Vinci, offered the lowest bid in a tender for the
construction of an immersed auto tunnel project that is to connect the
European and Asian sides of Ä°stanbul.
Despite this, however, French companies continue to fall short of the
performance recorded by Italians, who have moved quickly to capitalize
on friendly relations with Turkey over the last decade. While the
trade volume between France and Turkey stands at $10 billion, Italy
and Turkey posted $19 billion in trade volume last year. What is more,
Italian companies have moved to the top of the list in winning public
tenders in Turkey.
23 May 2009, Saturday
ABDULLAH BOZKURT ANKARA