STICKER SHOCK: 50 BILLION EURO PRICE TAG TO BRING

C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 002441

SIPDIS


E.O. 12958: DECL: 04/28/2014
TAGS: EAID ECIN EU SENV TU
SUBJECT: STICKER SHOCK: 50 BILLION EURO PRICE TAG TO BRING
TURKEY UP TO EU ENVIRONMENTAL STANDARDS?

Classified by DCM Robert Deutsch, for reasons 1.5 (b) and (d).



1. (C) Summary: The European Commission's Representation in
Ankara is pressing forward with pre-accession assistance of
Euro 250 million in 2004, rising to Euro 1.4 billion in 2011,
if accession negotiations are on track. However,
in one sector, the environment, the cost to bring Turkey up
to EU standards could reach Euro 50 billion, according to EU
officials. The costs will be spread over many years and the
EU is looking to the GOT, IFIs and the private sector to
provide the bulk of the funding. End Summary.



2. (SBU) As discussion of Turkey's candidacy for EU
membership continues, the European Commission and its Office
in Ankara are moving forward with their assistance program to
prepare Turkey for the accession process. Gurdogar Sarigul,
who heads the Environment Project for the European Commission
Representation in Turkey, told us the Pre-Accession
Assistance Plan for Turkey calls for spending to increase
from Euro 250 million this year to Euro 500 million in 2006.
If accession negotiations proceed well, Commission spending
for Turkey's accession could reach Euro 1.4 billion by 2011.





3. (C) Environment is one of the 31 chapters of the Aquis
Communitaire that Turkey must meet to join the EU. Sarigul
said Turkey faces serious problems in bringing its
environmental infrastructure up to EU standards, in part
because it has been starved of investment. Simon Mordue, who
heads the EU's assistance program for Turkey, said the EU
estimates it will cost between Euro 30 and Euro 60 billion to
bring Turkey up to EU standards, the bulk of which will go
for heavy infrastructure, e.g. upgrading and building new
water treatment plants and solid waste disposal facilities.
Sarigul said that EU officials think the actual cost will be
on the high side of that range -- at least Euro 50 billion.
The World Bank's director for Turkey, Marie-Helene Bricknell,
pointed out that Turkey lags much farther behind the EU
environmentally than did the 10 accession countries when they
started the process, and it cost between Euro 900 and Euro
1,700 per person to bring those countries up to EU
environmental standards.



4. (SBU) Commission officials recently completed a
comprehensive analysis of the gaps in Turkey's domestic
legislation and administrative capabilities. The report
identified ten priorities -- Water Quality; Waste Management;
Air Quality; Nature Conservation; Industrial Pollution;
Environmental Impact Assessment Process; Environmental Noise,
Chemicals, GMOs; and Nuclear Safety -- and 99 separate
legislative changes or new pieces of legislation that will be
needed to conform to the Aquis.



5. (SBU) What is missing from that long list of requirements
is a thorough evaluation of the cost. A separate assessment
(the Integrated Environmental Approximation Strategy for the
Turkish Republic) to be completed by the EU later this year
will lay our in more detail the projects needed (including a
long list of expensive infrastructure projects) and their
estimated costs. Sarigul said the EU hopes the GOT will
co-finance about 25 percent of EU projects, and the EU is
looking for a lot of help from the IBRD, EBRD and the private
sector to help finance the projects. Sarigul stressed that
most of the requirements Turkey must meet in the
environmental area are not subject to negotiation -- Turkey
must implement a series of stringent EU directives on water,
air and waste, and the Commission insists that transitional
measures -- allowing more time for full compliance -- will
not be granted.



6. (SBU) Sarigul said the Water Directive could prove
especially difficult for Turkey. For example, he pointed out
that Turkey's GAP (Southeast Anatolia Project) presents
significant problems. GAP is a massive regional investment
program, centered on a series of dams along the Tigris and
Euphrates rivers to provide hydroelectric generation and
water to irrigate the plains of upper Mesopotamia. But the
irrigation projects do not provide for adequate drainage and
treatment of the runoff. Expensive treatment plants and
related infrastructure will be needed to conform to the Water
Directive. In addition, the Water Directive will require
Turkey to prepare river basin management plans for its many
river basins. This requirement applies to transboundary
river basins Turkey shares with EU member Greece and
prospective member Bulgaria. He added that this requirement
did not apply to the Tigris-Euphrates basin, which Turkey
shares with Syria and Iraq. Foreign Ministry Head of
Transboundary Water Issues Mithat Rende told us the
government was near completion of a study that concludes that
complying with the Water Directive will take 25 years.



7. (C) Comment: The Euro 50 billion price tag needs to be
put in context. The cost would be spread over many years --
probably at least a decade -- and the EU is not planning to
bear the bulk of the cost but is looking to the GOT, the IFIs
and the private sector to provide most of the financing.
What is most important about the Euro 50 billion estimate is
that it shows the magnitude of fundamental environmental
problems in Turkey and how little the government has done in
recent years to address those problems. Until there is a
formal date to begin accession negotiations, the GOT will
remain content to ignore the enormous environmental
challenges. However, a positive decision this December will
compel the Turkish government to begin addressing such issues
as the state of Turkey's environmental infrastructure, which
has long been ignored. There will be important benefits.
The Commission estimates that the Euro 80 to 120 billion it
cost to bring the ten new members up to EU standards will
result in tangible benefits from Euro 134 to 681 billion.
Turkey stands to reap similar benefits. For example, fixing
the water infrastructure (30 percent of Turkey's population
does not have access to safe drinking water) will return
significant health benefits, improving the productivity of
Turkey's population.



8. Minimize considered.
EDELMAN