Stop-go state sell-off

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Stop-go state sell-off

Turkey is supposed to be privatizing; it's also ostensibly following policies that will bring down inflation. But vested interests that benefit from the unwieldy structure of state corporations and a banking industry dependent on earnings from high-interest treasury paper are thwarting these processes. The privatization of Turk Telekom is a tangled tale of delay and indecision, and a banking industry that can cope with a low-inflation environment is something to hope for rather than an immediately practicable reality. Metin Munir reports.

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Atik Ali Pasha's mansion is on the Bosphorus in Istanbul between the Dolmabahce and Ciragan palaces, which the Ottoman sultan and the princes occupied for most of the 19th century. Dolmabahce is now a museum and Ciragan has been converted into a luxury hotel. Not so long ago a prime minister wanted to give the mansion free of charge to a political party boss whose investments include tourism. But the press got wind of it. In order to extricate itself from the mini-scandal that erupted the government decided to privatize the mansion via public tenders.

The privatization went through - on paper. US hotel chain The Four Seasons and a company belonging to Turkey's large Çukurova group paid $29 million for a 49-year lease on the mansion. The partnership also undertook to invest about as much again to convert it into a luxury hotel. It made a down payment and then waited and waited. Then, in September, eight months after the date of the privatization, the supreme privatization council, which is directed by the prime minister, Bulent Ecevit, cancelled the deal.

No explanation was given for the volte-face.


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