Turkish contractors banned from Euro-tender for Russia connections

Rail Baltica Project, one of the most important railway projects in Europe, was put out to tender. Although Turkish companies Doğuş İnşaat and IC İçdaş made the best offer of 3.2 billion euros, they were vetoed by the Latvian Intelligence, reports Patronlardunyası.com.


To recall, five Turkish entities were slapped with sanctions by US on account of by-passing Russia sanctions.  The new ban sets a dangerous precedent for Turkish companies, because they were  not implicated in breaking Russai sanctions, but simply for working on Russian-tendered projects.

When the Latvian State Security Service cited security concerns for Turkish companies, Turkish companies were excluded from the tender. Although the reason for the veto is not officially disclosed, Turkish companies’ ties with Russia are cited.


According to Kerim Ülker from the DUNYA Daily, Turkish companies engaged in illegal trade with Russia were blacklisted by the USA last week, and for the first time in the European Union, Turkish contractors were excluded from tenders due to “security” reasons.

In February this year, the European Union brought the construction sector, as well as industry and technology, under close scrutiny in its 10th new sanctions package against Russia. In that decision, also targeted were products such as antennas or cranes that the construction industry could direct to the Russian army.

The development in Latvia also brings this package to mind. Last week, the Latvian Government put out a tender for the Rail Baltica project, which connects the Baltic countries with the European railway network.


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Turkish companies IC İçtaş İnşaat and Doğuş İnşaat made the best bid in the tender. Although Turkish companies gave the cheapest bid of 3 billion 162 million euros, the Latvian Government awarded the tender for 3.7 billion euros, or 106 billion TL at today’s exchange rate, to the consortium called ERB Rail Baltica JV, established by French, Italian and Polish companies.

The  veto decision taken  on the advice of Latvian State Security Service. Latvian State Security Service (VDD), which  recommended that Turkish companies should be excluded from the tender.


Latvian intelligence made the decision

Members of the tender commission unanimously announced the decision after reviewing the documents of the State Security Service. Commenting on the content of the VDD’s recommendation, Einars Jaunzems, head of the department responsible for the implementation of the European Railway Lines (EDZL) project, said: “The recommendation is quite simply the name of this administrative action, but due to the nature of the document we cannot sign a contract with this bidder. “We need to consider this recommendation as a ban on the continuation of possible cooperation,” he informed.


Works with Russian companies in Akkuyu

So why did Turkish companies get vetoed? According to both the information DUNYA has obtained and the news on Latvian TV, the reason is due to the projects undertaken by the Turkish construction company IC İçdaş.

Turkish company IC Holding is building many bridges in Saint Petersburg, Pulkovo International Airport terminal and tolled high-speed highway between Moscow and Saint Petersburg. However, the most notable work is the participation of IC Holding in the project of the nuclear power plant in Akkuyu together with the Russian construction company Titan-2.

Previously, it was explained that the veto of Chinese companies in European Railway Lines, like Turkish companies, was due to Russia. Turkish companies will object to Latvia’s decision. Although Latvia does not officially explain why Turkish companies were excluded from the 3.7 billion euro tender, it seems that the European press will continue to keep the Russia issue on the agenda.


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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and www.paraanaliz.com and has contributed to the financial daily Referans and the liberal daily Radikal.