Turkish Daily News, 96-06-27

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From: Turkish Ministry of Foreign Affairs <http://www.mfa.gov.tr>

TURKISH DAILY NEWS
27 June 1996

CONTENTS

[01] Ciller-Erbakan Waiting Game Spawns Unrest

[02] Can Ciller Persuade DYP Dissidents

[03] Washington Power Conference Praises Gas Plants For Turkey

[01] Ciller-Erbakan Waiting Game Spawns Unrest

Turkish Daily News

ANKARA- While expectations rose for the materialization of a secularist- Islamist coalition after Tuesday's meeting between True Path Party (DYP) leader Tansu Ciller and pro-Islamic Welfare Party (RP) leader Necmettin Erbakan, the mainstream parties opposed to the deal began raising their voices against the delay.

The two leaders, seeking the unconventional partnership for diverse reasons at the cost of alienating their respective purists, met for a third time on Tuesday, only to put off the final accord once again.

The Islamist leader told a news conference after the meeting that Ciller, who had given up alternative coalition formulas with other right and left- wing parties, had sought the extra time to definitely establish whether her party was ready "in principle" for the start of the coalition talks with the RP.

After a five-hour meeting on Wednesday between Ciller and her leading aides, a party official said the commissions to conduct the negotiations between the DYP and RP had not been formed yet.

"We have not reached that point yet, but we can say that the (projected) coalition with the RP has gained a certain momentum," Hasan Ekinci, the deputy DYP leader said.

But Democratic Left Party (DSP) leader Bulent Ecevit accused Ciller of deliberately dragging out the negotiations just to prevent her former partner, caretaker Prime Minister Mesut Yilmaz getting assigned to form the new government after Erbakan fails in the task.

"I gathered the impression that Ciller wants Erbakan to use the constitutional 45-day limit [for the replacement of a resigned government] to the full," Ecevit told his party's deputies. Ecevit said Ciller, meeting with him on Monday before responding to Erbakan, had proposed unrealistic models, including a minority government of her own."

The coalition with the Islamists Ciller is weighing up is to replace DYP's shortlived partnership with the rival center-right Motherland Party (ANAP) which she terminated last month after support caretaker Prime Minister Mesut Yilmaz lent to corruption probes against her.

Attacking the delay, Ecevit said it was allowing the extremists and "sworn foes of the Turkish flag" to exploit the protracted power vacuum, referring to the flag-tearing incident at the weekend congress of the pro-Kurdish People's Democracy Party (HADEP) which also witnessed shows of support for the separatist Kurdistan Workers' Party.

Murat Basesgioglu, a leading ANAP official, also called on Erbakan to give up, saying he had used up the reasonable time assigned him without achieving a concrete result in three weeks.

At the end of the 45 days, President Suleyman Demirel gains the right to dissolve Parliament, appoint a caretaker government and schedule elections in October.

After Tuesday's meeting with Erbakan, Ciller convened leading executives of her party to finalize the position regarding the new coalition.

Sources close to the meeting said the rotating premiership Ciller insisted on had been at the center of the debates. Ciller reportedly agreed to grant the first term to Erbakan whose RP captured 158 of the 550 seats in the Parliament, emerging the largest party from general elections six months ago. The DYP grabbed 135 seats but its strength was later depleted to 129 with defections, mostly in reaction to the flirt with Islamists despite Ciller's earlier militancy against the RP.

In return for giving up the quest for the first turn at the head of the partnership, Ciller reportedly told her aides that she was for one-year turns until general elections in 2000.

Erbakan, initially adamant on heading the coalition throughout its term, reportedly backed down to agree to a two-year first turn.

There was also no final agreement between the sides on the term of the coalition, or whether it should last out its term or the allies should cooperate until midterm elections.

Although some high-level DYP sources said a (favorable) decision for the start of the official coalition talks with the Islamists was imminent, the delay in the issue of a promised statement pointed to lingering reservations.

The Anatolia news agency quoted deputy ANAP leader Ekinci as saying that the party executives were now more warmer to a partnership with the RP compared to the past.

But some DYP sources told the TDN that some more time may be needed to prepare the public for the coalition with the Islamists. The DYP's caution is due to the suspicions still alive about the RP despite its leader's persistent efforts to soften the party's Islamist image and its anti-West stance.

They said another reason for the DYP leadership's cautious progress was to use the delay to keep the Islamists on edge and wring concessionary terms for the partnership.

The attitude of President Suleyman Demirel was seen as another unknown worrying the DYP and RP officials, sources said.

Demirel has repeatedly said he would only approve a government if credible guarantees are furnished that it will secure Parliament's vote of confidence.

Despite the adequate numerical strength of the projected partnership, the confidence vote is far from assured since many DYP deputies, including Foreign Minister Emre Gonensay have vowed to vote against it.

But the officials of both parties have reportedly agreed to threaten a campaign against Demirel if he refuses to approve the Cabinet Erbakan is to submit on grounds of unguaranteed chances of survival.

[02] Can Ciller Persuade DYP Dissidents

By Kemal Balci / TDN Parliament Bureau

ANKARA- True Path Party (DYP) leader Tansu Ciller is still trying to gauge the reaction of the "rebels" who oppose the possibility of a coalition government with the Welfare Party (RP). On Tuesday, Ciller met with RP leader Necmettin Erbakan for the third time but still could not give a definite reply to Erbakan's proposal for an RP-DYP coalition. What Erbakan wants from her is a "yes" in principle. Instead of giving a definite reply, Ciller asked Erbakan to give her some more time so that she could try to persuade the dissidents, at least some of them, to drop their opposition.

If in the meanwhile, the rebel DYP deputies raise their voices against the plan by, for example, issuing a communique telling the public they would vote against an RP-DYP government when it seeks a vote of confidence from the parliament, she will tell Erbakan, "It is not possible for us to form a coalition."

If on the other hand, the number of the "rebels" fail to reach a level where it could plunge into jeopardy the outcome of the vote of confidence, Ciller will have a fresh meeting with Erbakan and try to get from him further concessions on how the two parties would share ministerial positions.

Following her meeting with Erbakan on Tuesday, Ciller discussed the latest developments with her aides at her residence on Wednesday. During the meeting, which began early in the morning, they tried to gauge the clout of those DYP figures who oppose a coalition with the RP.

Meanwhile, the "rebels," led by Bursa Deputy Cavit Caglar, kept up their campaign to collect signatures for the "No to a coalition with the RP" declaration. By now they have reportedly secured promises from nearly 40 deputies. But the number of DYP deputies actually prepared to resign from the party if, despite the planned declaration, the RP-DYP coalition materialized, is believed to be no higher than 12.

To win a vote of confidence the new government would need a minimum 276 votes. With the latest resignations, the DYP's numbers have fallen to 129. The RP has 158 seats. Between them these two parties have more votes than they would need to win a vote of confidence. But if the current wave of defections from the DYP to the ranks of the Motherland Party (ANAP) continues, and the DYP loses 12 more deputies, the number of deputies who would be prepared to vote against the government would be 276. Since extremely sensitive balances are at stake, Ciller and her aides obviously find it difficult to accept Erbakan's offer and take part in an Erbakan- led government.

In case she proves wary of forming a coalition with the RP, Ciller may start campaigning for an early general election. DYP officials say that Erbakan does not want to form an election government. Under the circumstances they think that it would be a realistic solution to wait for the expiry of the 45-day constitutional period when the president of the republic may dissolve the parliament and order a new election.

But there is always the possibility that President Suleyman Demirel will not invoke the relevant constitutional clause immediately at the end of the 45-day period, and try to introduce a solution which would keep the DYP out. This possibility worries DYP officials. Since they do not consider President Demirel actually a "friend," politically speaking, and suspect that Demirel may press for government formulas which would enable ANAP leader Yilmaz to stay on as prime minister. They are also wary of the possibility that a new election would be staged only at the most inopportune moment from the DYP standpoint.

Both DYP and RP sources say that Ciller would only form a coalition government with the RP provided the RP agrees to eliminate the corruption probes against her, but, due to the "rebellion" in the ranks of her party, she has difficulty in mustering enough support to guarantee that the proposed government would win the vote of confidence. Erbakan will reportedly wait for Ciller's reply until Friday at the latest. If Ciller fails to give a reply by Friday, he will start coalition talks with ANAP leader Mesut Yilmaz.

[03] Washington Power Conference Praises Gas Plants For Turkey

By Ugur Akinci / Turkish Daily News

WASHINGTON- A conference on developing private power projects in Turkey mainly focused on merits of natural gas fired plants over those that use fossil fuels like coal.

Mobil, BOTAS and Transcanada Pipelines were some of the companies represented at the conference which favored gas-fired plants.

A new model of BOO (build-operate-own), promoted by the Turkish Ministry of Energy, also received favorable focus as an alternative to replace the BOT (build-operate-transfer) model so far utilized in attracting foreign investments to Turkish private power projects.

In the two-day conference in Washington organized by the Center for Business Intelligence and chaired by Fred Haynes of the American-Turkish Council, Turkish officials enthusiastically encouraged investors. "Without a doubt the opportunities and possibilities to do business in Turkey are real and should be seized," Turkish Ambassador Nuzhet Kandemir stressed.

Kandemir

In his keynote address concerning the impact of recent political developments in Turkey on the investment climate, Ambassador Kandemir acknowledged that "indeed, at first glance, given the present circumstances, it doesn't seem to be an easy task to talk about the recent political developments in Turkey and their impact on foreign investment." Yet, he immediately added that the energy sector still had great rewards for those interested investors. Due to the "broad consensus" on the importance of foreign investment in Turkey, even though Turkey is going through coalition problems, "changes in the government do not affect the orientation of economic life," Kandemir said.

To back up his statement, the Turkish ambassador cited many successful private power projects completed and half-completed like Birecik Hydroelectric Plant, the Izmit Water Supply Project, the Wing-Enron-GAMA gas-turbine plant in Thrace and the CEA lignite-fired plant in Ilgin, Konya.

Samlioglu

Treasury Undersecretary Serhat Samlioglu informed the participants about the procedures necessary for BOT project applications. She invited foreign investors to take advantage of various guarantees the Turkish Treasury extended to foreign investors per Decree No. 32. She admitted that "the existent BOT model is not necessarily the (final) BOT model and is prone to evolve" to meet the evolving needs of foreign investors.

Financing

Financing was another topic that received generous attention during the first day of the conference. Firms like BANKERS TRUST, MILBANK TWEED HADLEY &amp; MCCLOY, and MORRISON &amp; FOERSTER made presentations on proper and effective ways to structure financing of private energy projects in Turkey through U.S. Ex-Im Bank and OPIC (Overseas Private Investment Corporation).

U.S. Ex-Im Bank covers a maximum of 85 percent of the U.S. contract price of eligible projects or 100 percent of its U.S. content, whichever is less. It also finances 15 percent of the local project costs.

Gas or Coal?

Various businessmen that TDN talked to during the conference and who wanted to remain anonymous expressed differing views on the desirability of gas- fired power plants.

One group opposed the natural gas idea on the grounds that although it is clean and efficient, it has to be imported and as such it will wreck Turkey's balance of payments. "The electricity produced by such plants is always more expensive than coal-generated power. The consumer ends up paying for all that imported gas," one Turkish businessman told TDN.

Others, though, maintained that Turkey did not have enough quality lignite coal to keep up with its climbing energy needs: Turkey is projected to need 40 billion cubic meters of natural gas by 2010. Turkey needs an additional minimum of 2,500 MW a year to meet the increasing energy needs in the future, according to an analysis published in TEBANEWS."Natural gas is the modern, efficient way to go," one businessman told TDN. "Besides we don't have enough quality coal left," he added.

Iran

One agenda item that was touched upon by some participants was the "Iran factor.""If we could only build a 100-kilometer-long pipeline across the border, we can get all the gas we want from Iran and Turkmenistan," one participant told TDN. But a U.S. senior official from the Commerce Department effectively blocked any such discussion by reminding the conference participants the U.S. government's adamant opposition to any business transactions with Iran.

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