Letter from AMEC plc to the Chairman of
TURKEYYUSUFELI DAM AND HYDRO ELECTRIC
In view of the TISC forthcoming visit to Turkey,
I enclose some briefing notes on the above project which AMEC
is pursuing as part of an international consortium of companies,
led by the FrenchSpie Batignolle.
Kindly note that Spie is a major contracting
group in France and 41.6 per cent of the Spie Group is owned by
The value of the project is US $838 million
(excluding buyer credit premiums) and AMEC's participation amounts
to 15 per cent of the civils joint venture. We are seeking ECGD
Buyer Credit support for up to US $99 million (being approximately
The ECGD has been provided with extensive information
on the project including a full environmental study.
Enclosed are the following:
1. Executive summary of the Coruh River Scheme
3. Location map and plot*
4. Members of the Consortium*
The enclosed are extracts of information previously
made available to ECGD.
The current status of the project is that we
have agreed the price with the client and are seeking to put forward
a committed financial offer with export credit loans constituting
the back-bone of the financing $454 million out of a project total
cost of $838 million.
ECGD and the other ECAs (France, Belgium and
Spain) will not indicate a firm commitment until the newly introduced
ECA support criteria has been satisfied. As you will be aware
from the experience to date with the Ilisu Dam, the difficult
area is the environmental requirements, principally resettlement
of the people that will be affected by the Dam's construction.
The ECAs, led by COFACE, have examined the environmental
report and will have travelled to Turkey to hold discussions with
the client (DSI) and to visit the site, prior to your visit date
of 20 November 2000.
As you will see from the chronology of events,
it has been a long and involved process to bring this project
to point of financing. In so far as we agreed the contract price
and contract conditions earlier this year, DSI is becoming increasingly
concerned with regard to the lack of a committed financial offer
with particular reference to the ECA terms of support. We are
now involved in a chicken-and-egg situation where the ECAs are
reluctant to formally commit to the terms of support until they
are satisfied that the new criteria for support (mainly environmental)
are satisfied. There is a risk that ECGD will be seen as the ECA
that is most difficult to satisfy.
As you may well be asked about HMG's support
for projects in Turkey and dams in particular, we felt it important
that you should be briefed about our opportunity. Further, as
we discussed, the TISC should also be briefed by the ECGD on its
support for opportunities in this market and dams in particular.
3 November 2000