Turkey dam risks losing foreign funding

ISTANBUL // In a move that could spell the end of one of the most controversial dam projects in Turkey, western sponsors of the Ilisu dam in southeastern Anatolia have stepped on the "emergency brake", threatening to cancel export guarantees and accusing Ankara of failing to fulfil social and environmental obligations. State-owned export agencies in Germany, Switzerland and Austria earlier this week notified the companies involved in the Ilisu project that Turkey had not done enough to ensure that the relocation of tens of thousands of people in the Ilisu region would be managed in a fair and orderly way, environmental standards upheld and cultural heritage protected.

In a strongly worded statement, Germany's ministry for economic co-operation and development said Turkey had failed on all fronts. "In sending out the environmental failure notice, the export insurance agencies have stepped on the emergency brake," the ministry said. "Turkey has not lived up to its commitments in any way." Turkey now has 60 days to fulfil the demands. There was no reaction from the Turkish government or from the consortium of companies that want to build the dam. The state-backed export guarantees are seen as a necessity for the participation of German, Swiss and Austrian companies in the dam project that is estimated to cost ?1.1 billion (Dh5.5bn) and that the Turkish government said is needed to boost the economy of southeastern Anatolia.

The lake that will be created by the Ilisu dam will contain more than 10 billion cubic metres of water from the Tigris river. Water will cover an area of more than 300 sq km and destroy almost 200 villages, triggering a relocation of up to 65,000 people, while the historic city of Hasankeyf will be partially submerged. Environmentalists in Turkey and abroad have been campaigning against the project for years. As a precondition for giving the export guarantees, the Europeans had presented Turkey with a list of more than 90 demands that dealt with the relocation issue, environmental matters and the preservation of the region's cultural heritage. But a team sent to the region last year found that work on many of those issues had not started. At the time of the visit last December, no consultations with people living in the villages earmarked to be inundated had been held, one of the reports said. The first consultation meeting in the region was held only in mid-April, long after the criticism voiced by the team had been made public. In a second visit this spring, the team concluded that there was hardly any progress on the ground or on the institutional level, with many government agencies still in the dark about what they were supposed to be doing in connection with the project. "The common weakness is a lack of information and awareness in these agencies about the resettlement tasks in Ilisu," said the latest report by the team, dated June 13. "No official communication has been received by these agencies from any central government authority that they have to participate and contribute to the resettlement component of the Ilisu project." Authorities in Ankara now face a final deadline of early December to come up with solutions. "If necessary measures to protect people, environment and cultural goods [in the Ilisu region] are not taken immediately, contracts for deliveries and credits will be cancelled," the German ministry said. Earlier this year, Ankara was warned to speed up the work, but results have been disappointing, the ministry said. "It is not enough to have standards just on paper, they must have the function to protect people, the environment and cultural goods." Environmentalists welcomed the move by the three European states. "It is unlikely that Turkey will do within two months what it has ignored for two years," a lobby group against the dam, Counter-Stream, said in a statement. "The withdrawal from Ilisu has officially begun." Some western diplomats in Ankara have warned that Turkey, determined to continue the Ilisu project with or without backing from Europe, would be looking for other partners. China would be one possibility, one European ambassador said earlier this year. The Ilisu dam is part of the so-called South Anatolian Project, or GAP, a system of 22 dams and 19 hydroelectric plants to be completed by the middle of the next decade. Before the current consortium of western companies signed up for the project, the British company Balfour Beatty withdrew from the Ilisu dam project in 2002, after public and political pressure at home. For the Turkish government, the dam project such as the one in Ilisu are a vital tool to boost energy supplies and reduce the country's dependence on energy imports, especially from Russia. Plans to build nuclear power plants have also been met with protests. tseibert@thenational.ae