Turkey goes turnkey, in Istanbul and Ankara - "design-build" and "build-operate-transfer" local transit projects

Railway Age, Sept, 1989

Turkey goes turnkey, in Istanbul and Ankara

Two current transit projects in Turkey afford examples of two different forms of turnkey project development.

Already in operation is the first phase of Istanbul's new Metro, which is being developed by ABB Traction in partnership with Turkish construction contractor Yapi Merkezi. The first five-mile segment of the project, between Aksaray and Otogar on the European side of Istanbul, began carrying passengers in March, only three years after contracts were signed with the project consortium. The balance of the 14-mile system is expected to be complete by the end of 1991.

Originally conceived as a light rail system, the Istanbul project has evolved into what is now being described as a metro system. Almost two miles of the initial system, and four of its 19 stations, are underground. All stations are being constructed with high level platforms, and the entire system will be grade separated. ABB is supplying a total of 105 articulated light rail vehicles, which will normally operate in three-car train sets. The line will have a maximum one-way capacity of 24,000 passengers per hour.

Although incorporating many of the characteristics of a typical turnkey procurement, the Istanbul project also varies in several important details from a typical turnkey approach. Bidding for the project, for example, was based on a combination of detailed and performance specifications. And while the supplier team was responsible for most elements of the system, others, such as communications and fare collection systems, were provided by the Istanbul municipality.

Unlike the usual turnkey project team, the ABB-Yapi Merkezi team for the Istanbul Metro is structured as what ABB project director Lennart Gunnarsson describes as an "open consortium," instead of a joint venture arrangement. Yapi Merkezi is responsible for the design and construction of the project's civil engineering work, including structures, the track bed, track, stations, sub-stations, shops, a traffic control center, and the depot area at the workshops. ABB is responsible for all electro-mechanical equipment, power supply, signaling, vehicles, radio and public address systems, a central clock system, station power distribution and lighting, and workshop equipment and outfitting, including installation and testing. A number of other suppliers for the project participated as ABB subcontractors.

An important element of the project's success has been the financing package, in which ABB has played a leading role through its subsidiary, ABB Financial Services. The $340 million package, which was assembled by a consortium of banks in the United States and Europe, is covered by a separate agreement between the Istanbul municipality and the banking consortium.

"Time is the essential advantage of the project approach," says ABB's

Gunnarsson of the Istanbul project. The initial phase was completed in such a short time, he says, because only two principal companies were involved in the work, making resolution of project issues relatively easy, and because ABB had a much fuller responsibility for total functioning of the system than would have been the case with a conventional procurement.

A Phase I metro project for Turkey's capital city of Ankara, which should get under way soon when financing arrangements are complete, should represent a good example of the build-operate-transfer (BOT) project development approach.

The planned project will provide the first nine-mile segment, between Kizilay and Batikent, of a planned 34-mile Ankara system. The initial project will comprise some 3.7 miles of subway, 2.3 miles at grade or in open cut, and two miles of elevated structure. A total of 108 75-foot cars, operated in trains of up to six cars, is planned for the initial segment. Maximum capacity will be 70,000 passengers hourly in each direction.

The three principal participants in the Ankara Metro BOT team, selected by the Ankara municipality last year, include Canada's Urban Transportation Development Corporation (UTDC) and two Turkish construction firms, Gama and Guris. These three firms have joined with UTDC's parent corporation, Lavalin, and EGO (the Ankara municipality's electricity, gas, and bus agency) to form a joint venture Turkish corporation, ARTAS (Ankara Rail Transit A.S.) which will build, own and operate the rail system. The five ARTAS shareholders will contribute a total of approximately 15% of the total project investment cost as equity in the operating company.

ARTAS has contracted with the Ankara municipality to build and operate the system, and will contract in turn with the UTDC-Gama-Guris consortium to design, build and equip it. Once the system has been completed, ARTAS will operate it through an operations and maintenance contractor. The Ankara municipality has committed to pay a projected revenue to ARTAS that will be sufficient to cover debt, interest, O and M costs, and dividends. At the end of a 15-year operating period the ARTAS shareholders, except EGO, will turn over their shares, free of charge, to the municipality, which will then own the system.