By Selcan Hacaoglu (Bloomberg) —
Turkish President Recep Tayyip Erdogan said the construction of a multi-billion dollar canal, an alternative to Istanbul’s Bosporus strait, will begin at the end of June as the pandemic continues to take its toll on the country’s ailing economy.
Erdogan’s announcement on Saturday came a decade after he first revealed his “crazy project” and at a time when his support has hit an all-time low. The 45-kilometer (28-mile) Canal Istanbul would cost around $15 billion and link the Black Sea with the Sea of Marmara, officials say.
The government says it is meant to ease shipping traffic and the risk of accidents in the Bosporus, which bisects Turkey’s biggest city.
Erdogan is betting that the building of the canal and the rise of new cities along its route will create thousands of jobs and wealth that will dramatically boost the country’s economic growth and reverse the slide of his popularity ahead of the 2023 presidential elections. Discontent has grown over the Erdogan government’s handling of the economy and over allegations of corruption from a mafia boss, which he’s dismissed.
During the president’s 18-year rule, Turkey has poured tens of billions of dollars into giant infrastructure projects, including the new Istanbul airport, a new bridge over the Bosporus and massive city hospitals.
The planned waterway is projected to create a new city of half a million, with several bridges connecting the two sides. Shares of Turkey’s state-run property developer Emlak Konut and cement-maker Akcansa Cimento, a partnership between HeidelbergCement and Sabanci Holding, climbed as much as 6.4% and 7.6%, respectively on Monday.
“We will lay the foundations of the Canal Istanbul at the end of June,” Erdogan said at the opening ceremony of a TV signal tower on the anniversary of the capture of Istanbul by Ottoman Turks in 1453 on Saturday, a day after inaugurating a giant mosque in Istanbul’s central Taksim square. “We will build two cities on the right and left of the Canal Istanbul. With these two cities,” Istanbul’s beauty and strategic importance will increase, he said.
In order to mitigate the impact of the pandemic on the economy, his government is struggling to open up the economy and revive the tourism industry by ramping up vaccinations. The goal is to narrow the current-account deficit and alleviate sufferings of businesses that have complained about insufficient government support and families that are withering under soaring inflation.
Erdogan has dismissed concerns of his political rivals that the project would hit taxpayers, the environment and undercut a 20th-century agreement meant to ensure stability and security in the Black Sea. Erdogan has said Turkey won’t exit the 1936 Montreux Convention but said warships will be able to use the canal.
Istanbul’s Mayor Ekrem Imamoglu, who’s seen as a potential future challenger to Erdogan, is firmly opposed to the project, saying it would “annihilate” water resources for Istanbul’s 16 million residents, ruin the province’s nature beyond repair and make it unlivable. Turkish prosecutors on Friday demanded imprisonment of Imamoglu, whose victory in 2019 ended more than a quarter-century of control over Istanbul by Erdogan’s party and its predecessors, on charges of allegedly insulting the country’s election watchdog.
“The people of Istanbul elected Imamoglu on March 31 to prevent the destruction of the green, the city from being buried in cement, the people from being treated loutishly and finally block the formation of that freak system called the Canal Istanbul,” Meral Aksener, head of the opposition Iyi Party which backed Imamoglu’s candidacy, said at a competing ceremony marking the capture of Istanbul on Saturday.(Updates with shares of state-run developer Emlak Konut and cement-maker Akcansa Cimento climbing in fifth paragraph.)
–With assistance from Tugce Ozsoy.
© 2021 Bloomberg L.P.
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