US embassy cable - 03ANKARA7318

UNCLAS SECTION 01 OF 02 ANKARA 007318 
 
SIPDIS 
 
 
SENSITIVE 
 
 
STATE FOR E, EB/IFD, AND EUR/SE 
TREASURY FOR OASIA - JLEICHTER AND MMILLS 
NSC FOR MBRYZA AND TMCKIBBEN 
 
 
E.O. 12958: N/A 
TAGS: EFIN, EIND, ECON, PGOV, TU 
SUBJECT: MEETING WITH PRIVATIZATION AUTHORITY OFFICIAL 
 
REF: ANKARA 7052 
 
 
1. (SBU) Summary: Privatization Authority (PA) Vice President 
Ayhan Sarisu told emboffs that the PA intended to retender 
Tekel,s tobacco operations sometime early next year, and 
dismissed as baseless a lawsuit brought by a union to block 
the sale of Tekel,s alcohol operations. End Summary. 
 
 
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TEKEL 
----- 
 
 
2. (SBU)    Econoff and Econ Specialist met November 21 with 
Ayhan Sarisu, who is responsible for the Tekel privatization 
process.  Sarisu denied recent local press reports that the 
GOT had decided to adopt a new strategy for Tekel,s tobacco 
operations, under which each cigarette brand will be sold 
separately. Sarisu said that such an approach was unworkable, 
in that it would take more than two years. Sarisu also 
rejected press reports that the PA would set a minimum price, 
stating that this would be illegal and in any event 
unnecessary, since &everyone knows what the minimum is.8 
Sarisu further admitted that he could not predict whether new 
bids would be any higher than those already rejected. 
 
 
3. (SBU)    Sarisu described as &partially correct8 a 
recent Financial Times article which claimed that lack of 
financial information on Tekel was one of the critical 
factors in the low bids. Sarisu claimed that bidders received 
all historical information requested. However, some bidders 
were unhappy with Tekel,s financial statements, since they 
were audited in accordance with Turkish rules, and not 
international standards, and requested new financial 
statements to be prepared in accordance with international 
standards. The PA was unable to provide such statements, 
according to Sarisu,because it would have taken six months 
just to tender for the  auditors. 
 
 
4. (SBU)    Separately, a union representing Tekel workers 
recently filed suit, and obtained a court stay, against the 
sale of Tekel,s alcohol operations (reftel). Sarisu 
described the suit as &absolute garbage8 and a form of 
blackmail. He said that the stay would be appealed 
immediately, and is confident it will be overturned. 
 
 
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PETKIM/TUPRAS 
------------- 
 
 
5.  (SBU)   According to Sarisu, the Tupras sale is expected 
to conclude by year end. Accordingly, the Petkim bidding 
deadline has been extended from 18 November 2003 to 30 
January 2004, so that Petkim bidders can know the identity of 
Tupras, purchaser (see reftel). 
 
 
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TURK TELEKOM 
------------ 
 
 
6. (SBU) Though he is not responsible for the Turk Telekom 
privatization, Sarisu does not believe that the &golden 
share8 to be retained by the State will materially adversely 
affect the sale price. Sarisu noted that the GOT did not 
intend to utilize its position to influence operations, but 
merely to have access to management information. Sarisu 
further noted that in other (unidentified) sales the PA was 
willing to cancel the golden share, and could do so for Turk 
Telekom, without parliamentary approval. Sarisu assured 
Econoff that the PA would work with bidders to allay any 
concerns they might have about the golden share. 
 
 
------------ 
HIDAYET KAYA 
------------ 
 
 
7. (SBU) Kaya, the only remaining PA Vice President appointed 
by the former government, was fired November 19. Sarisu said 
there was no hint of scandal surrounding Kaya,s activities. 
Rather, Kaya had been criticized by the Prime Minister,s 
Inspection Board for &procedural problems8 in connection 
with his supervision of the Tofas and Tekel privatizations. 
(Sarisu had subsequently been given responsibility for 
Tekel.) Sarisu stated that Kaya,s replacement should be 
named &very soon.8 Comment:  The removal of Kaya, right 
after the political embarrassment of the failed Tekel tobacco 
tender, provides another example of the GOT,s responding to 
adverse events by replacing officials held over from the 
Ecevit Government. 
EDELMAN