OYAK rides the gravy train in northern Iraq

While Chief of General Staff Gen. Yaşar Büyükanıt repeatedly argues that a cross-border operation against the outlawed Kurdistan Workers' Party (PKK) is necessary to severe its support from northern Iraq, the Armed Forces Pension Fund (OYAK) is gleaning ever-increasing profits from its businesses in and with Iraq.

Of the 1,200 Turkish firms participating in the Reconstruction of Iraq, OYAK has had the biggest piece of the pie. The firm has been selling cement produced in its facilities in Mardin, Adana, Bolu and Ünye to Iraq and exporting iron bars there from its steel and iron plants in İskenderun and Ereğli (Erdemir).

The fact that OYAK has received great revenues from the reconstruction of Iraq, following on from the US-led invasion in 2003, can be seen from the freight passing through the Habur border crossing. OYAK employs subcont-ractors in its trade connections and sells cement, construction materials, paper and other important materials to northern Iraq.

OYTAŞ, a subsidiary of OYAK, is supplying cement and reinforcement iron for the construction of supplementary facilities for the parliament building, the ministerial housing units and the police department building for the quasi-autonomous Kurdish government in northern Iraq. The OYAK subsidiary paper production unit is reportedly selling paper to Xebat daily, a pro-Kurdistan Democratic Party (KDP) newspaper.

The number of companies currently doing business in northern Iraq now sits at 600. An impressive 95 percent of this $2.8-billion market is controlled by Turkish companies. Across Iraq as a whole about 1,200 Turkish companies in total are conducting business. Of the Turkish firms operating in northern Iraq, 150 have undertaken big contracting jobs in Arbil and Sulaimaniya.

Reportedly 380 out of the 500 foreign companies operating in Arbil are Turkish, and about 65 percent of tenders, amounting to $350 million, were awarded to Turkish companies in Dohuk in 2007. Two airports, amounting to $350 million and $300 million in Arbil and Sulaimaniya, respectively, are being constructed by Turkish companies. Moreover the tender for the construction of a $260 million university in Sulaimaniya was awarded to Turkish companies.

Turkish firms are also active in Zaho, Akre and Behdinan. The infrastructure work undertaken by Turkish firms in northern Iraq was worth $240 million in 2003, rising to $767.1 million in 2004 and $1.5 billion in 2005. In their reconstruction work Turkish firms often establish partnerships with Kurdish counterparts in northern Iraq.

The OYAK Group, however, avoids direct trade with Iraq, but conducts its business through subcontractors such as Bakra and Başkent Uluslararası Nakliyat and Dış Ticaret Ltd Şirketi, RE-BA Dış Ticaret Ltd. Şirketi, Nur Ticaret, Fefoğlu, Yüksel, Barkınlar, Saki İthalat and İhracat Gümrükleme Nakliyat Sınır Ticareti, etc. The transportation of materials exported by OYAK to northern Iraq is operated by Has Nakliyat. Construction materials sent by OYAK are stored in the UN storage depot, located near İbrahim Halil Highway, in Zaho.

OYAK recently won the tender for the jet runway next to Hewler International Airport. In addition to this $300 million project, OYTAŞ is supplying cement and reinforcement iron to Turkish companies operating in Arbil and Sulaimaniya. Moreover, it is reported that the tenders for the construction of Dohuk Airport and for the road construction between Hewler and Kirkuk have been awarded to OYTAŞ.

In OYAK’s annual report for the year 2003, when the US-led invasion of Iraq started, total sales were YTL 6.4 million, and the total trade volume was YTL 33.4 million, while the total equity was YTL 2.2 million. It seems that OYAK has had the lion’s share from the reconstruction of Iraq as its exports rose from $1.3 million to $2.1 million in 2004. In 2005, OYAK’s total income was YTL 10.6 million and total exports amounted to $1.7 million.
Reportedly, the annual trade volume of Baksa and Başkent Uluslararası Nakliyat and Dış Ticaret Ltd. Şirketi, RE-BA Dış Ticaret Ltd. Şirketi, Nur Ticaret, Fefeoğlu, Yüksel, Barkınlar, Saki İthalat and İhracat, through which OYAK sells cement and iron reinforcement to northern Iraq, amounts to $15 million.

As Turkey’s exports to Iraq exceed $3 billion, the Habur border crossing that connects the two countries has turned into construction gateway. Almost all exports pass through this gate. As an alternative to Habur, Turkey planned to construct the Ovaköy border gate, 15 kilometers from Habur, in 2003. However, after Parliament voted against the March 1 motion -- which would have allowed US troops to enter Iraq from Turkish soil in the 2003 invasion -- this project was shelved.

Turkey later sought new alternatives to Habur. As the Kurdish groups, led by Kurdistan Democratic Party (KDP) leader Massoud Barzani, started to demand fees of $300-400 from Turkish truck drivers and with more than 100 drivers having been killed in Iraq since the start of the US-led invasion, Turkey decided to build a border gate in Nusaybin, as an alternative to Habur. Under this project the area would be cleared of landmines and a secure route to Iraq would be sought, but the fate of this gate is still unknown.

The daily number of trucks passing through the gate was 2,500-3,000 before the Iraqi invasion, but now that figure sits at 500-750. Despite this drop in the number of trucks crossing the border, trade between Turkey and Iraq is booming. Turkey’s exports to Iraq have steeply risen in parallel to the increasing reconstruction work in northern Iraq.

The history of Turkey’s exports to Iraq are as follows: $371.2 million in 2000; increasing to $839 million in 2001; dipping to $649 million in 2002 before the invasion; shooting back up again to $829 million in 2003, the year of the invasion; then $1.82 billion in 2004; $2.75 billion in 2005; and an impressive $3 billion in 2006.

09.07.2007
ERCAN YAVUZ HABUR
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