Why was Kanal Istanbul – the project to carve out a waterway on the European side of Istanbul and bypass the Bosphorus – placed on the government’s agenda as the country is still reeling from an economic crisis? The government recently suffered two fiascos, one involved thermal power plants while the other had to do with a plan to rescue the private company “Simit Sarayı”. So why would it press forward with the Kanal Istanbul project? 

The Kanal Istanbul has gotten everyone up in arms in Turkey. Many point to how paradoxical this enterprise would be for the economy, the ecology, urban planning and the Montreux Convetion, an agreement brokered in 1936 which restricts the passage of naval ships that do not belong to the Black Sea. 

The real Istanbul

Yet we do not know how the Kanal Istanbul project was devised. What we do know of it is an Environmental Impact Assessment (ÇED) report and objections based on that report. This does not suffice to evaluate the full consequences of the project. How can we object to a project whilst ignoring the full reality of it? 

It is difficult for the public to hold a healthy and balance debate on an issue when it does not grasp all the information about it. While everyone focuses on the environmental dimension of the project, I chose to focus on its economic aspects. For one can only grasp the reality of something by questioning it from other angles. 

The third Istanbul

What is currently happening in Istanbul fits right into the trajectory it has been set on for the past few years. Despite there being two airports, a third one was built only to demolish one of the first two. A third bridge was added to two already existing ones. For this purpose, sea transportation was halted and the Marmaray, rail tunnel that crosses the Bosphorus strait, was not functional for a while. Now, as an addition to the Bosphorus that naturally splits the city into two halves, they want to separate the Istanbul into three with an artificial canal. 

A recent issue over thermal power plants in Turkey was left unresolved as it was widely deemed harmful to public health. It was when the project was disclosed in its entirety that society acted against it and vetoed a law that had already been passed in parliament. 

Thus, I believe such a projects should be thoroughly discussed. That is what I will attempt to do in this piece. 

Plunder 3.0

Going back to our initial question: why was this project needed at such a time? Capital transfers give us a clue. The ruling Justice and Development Party (AKP) has gained 62.2 billion dollars through privatization policies between 2003 and 2019. From TürK Telekom to sugar factories and Tekel factories, valuable investments that were made with the labour and taxes of our parents and grandparents were have sold off to people for little more than the quarter of what they were worth. And we, as consumers, have been left to purchase goods and services at a higher price. 

A second clue is Public-Private Partnerships (PPP). Between 2003 and 2019, the AKP has implemented exactly 179 projects through PPPs. Projects worth up to 53.3 billion dollars were carried out. While the companies or consortia that are awarded the contracts earn money through construction, the public provides the funds. The banks that keep our salaries and savings readily provide loans to these projects. The state then pays for operations to be carried out. As if this was not enough, in the even where customers do not show up, the state pays for the absent customers from the general budget. 

As an example, the Kütahya’s Zafer Airport in Central Anatolia that was built in 2012 generates very little as it fails to attract passengers. The same goes for the Osmangazi Bridge that was erected in 2016 in the Gulf of Izmit.  

To get an idea of how much we have been ripped off by privatizations, we ought to multiply purchasing costs by at least five. The same applies to PPP investment figures.  

Looking at graphs, we see that after 2009, the number of privatizations had started to drop, though they went up again in 2013 with energy privatizations. PPPs began in 2010, and jumped in 2013, when a total of 35 billion dollars were made through privatization and PPP investments. In other words, 2013 was a particularly bad year for the public. 

The government has made an average of 7.7 billion dollars in privatization every year. It has provided business investments for private companies by guaranteeing customers. The AKP has largely sustained its existence through this policy. In 2018, the privatization of sugar factories amounted to 1,359 million dollars. The same year, total PPP investments were worth a whopping 26 million dollars.

In the early years of AKP governance, privatization was used as a tool for capital transfer. After 2009, PPPs became dominant. In 2013, both privatization and PPP investments were breaking records. In 2018, sugar factories were privatized.

The government is now having recourse to a new tool to transfer capital. If privatizations can be termed Plunder 1.0 and PPPs Plunder 2.0, the government’s pioneering Kanal Istanbul project may be termed Plunder 3.0. 

One more Kanal İstanbul scandal

Five solid alternatives have been put forward to Kanal Istanbul. The project is so unsound that cabinet ministers are making a fool of themselves by defending Erdoğan’s enterprise. What they are defending is a transportation line that would destroy Istanbul’s water source. But hasn’t long been this way? They utter the biggest lies because Erdoğan wants it. This defence has solely to do with being in power. Yet we have already seen that if a single pillar of the government crumbles, its rulers will immediately side with the people. 

In short, the government is looking for new ways to plunder the people. For money that was lent during the economic crisis has to be paid back. That is why it wants to build the Kanal İstanbul that is worth 15 billion dollars, with people’s money. It wants to collateralize it and sustain its pattern of plunder.