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January-July, the latest budget data showed. The Turkish government has launched several large infrastructure projects — some very controversial, such as the new airport in Istanbul — over the past couple of years as it believes such investments provide a necessary momentum to revive economic growth. The government spent as much as TRY9.6bn on ‘construction services’ in the first seven months of the year. The government transferred TRY5.4bn to local companies for the construction of buildings. Payments to consulting firms and consulters over the same period topped TRY7.7bn. The government bought services from consulting companies and individuals, such as, the survey reports, R&D, IT services, information, security and call centre services. The opposition parties and critics claim that the government’s lavish construction projects often serve as a scheme for channelling public resources to pro-government companies but fail to produce hoped-for economic results. The government outright dismisses such claims.
The central government budget posted a deficit of TRY68.7bn in January- July. Revenues increased by 24% y/y to TRY496bn while expenditures stood at TRY565bn, a 23% y/y rise.
In July alone, the central budget produced a surplus of TRY9.9bn. The budget posted a surplus in the month thanks to the TRY22bn the country’s central bank transferred to the Treasury and Finance Ministry.
6.1.2 Budget dynamics - privatization
The Sans-Sisal JV, a partnership between Turkey’s Demiroren Group and Italy’s Sisal, has won a concession tender to operate Turkey’s national lottery, Milli Piyango, for 10 years, Turkey’s Wealth Fund (TWF) has announced. The joint venture offered a minimum revenue commitment of Turkish lira (TRY) 9.32bn ($1.66bn) for 2020, the Fund said in a statement. For the 10 years, the enterprise promised a total of TRY28.1bn in revenues, according to the Fund. Dogan-Intralot JV, SAZKA Group A.S and IGT Austria GmbH were the other bidders. Demiroren and Sisal hold 51% and 49% stakes in the joint venture, respectively. Revenues that Milli Piyango generated from lottery games amounted to TRY3.4bn in 2018 up from TRY3.08bn in the previous year.
Demiroren Group’s interests include the national daily newspaper Hurriyet and TV station CNN Turk.
The conglomerate also earlier this year won a tender to operate Turkey’s sole legal sports betting company Iddaa.
Yildirim Demiroren, chairman of Demiroren Group, was president of the Turkish Football Federation at the time the JV won the Iddaa tender, but he later resigned from the position. A previous auction for Milli Piyango was held in 2014, when a consortium of Net Holding’s Net Sans and Hitay placed the highest bid of $2.76bn for a licence to operate the lottery for 10 years. However, the consortium failed to sign the final agreement by the deadline and the privatisation administration invited the second-best bidder—ERG-Ahlatci— to sign the concession agreement. ERG-Ahlatci, which offered to pay $2.75bn for the licence, did not make the payment by the December 2015 deadline and the tender was subsequently cancelled. TVF, with assets worth $50bn, was set up in 2016 to develop and increase the value of Turkey’s strategic assets. It has stakes in major Turkish companies including flag carrier Turkish Airlines, several big banks and Turk Telekom. However, Turkey does not have natural resources wealth, such as from oil and gas, that sovereign wealth funds around the world typically draw upon to accrue capital.
6.2 Debt
TURKEY -DEBT
2013
2014
2015
2016
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2018
Jul/19
41 TURKEY Country Report September 2019 www.intellinews.com