TURKISH REPLY TO OPIC LETTER ON IZMIR RING

UNCLAS ANKARA 003870

SIPDIS

SENSITIVE

OPIC FOR ROSS CONNELLY
USDOC FOR DEFALCO
TREASURY FOR INTERNATIONAL AFFAIRS - CHRIS PLANTIER

E.O. 12958: N/A
TAGS: BEXP EINV TU OPIC
SUBJECT: TURKISH REPLY TO OPIC LETTER ON IZMIR RING
ROAD


1. (U) On July 5, Embassy received the following
response to our June 3 diplomatic note that transmitted
OPIC Acting CEO Connelly's letter to Deputy Prime
Minister Sener.

Begin Text. The Ministry of Foreign Affairs has the
honour to inform that the letter from Ross J. Connelly,
Acting President and CEO of Overseas Private Investment
Corporation (OPIC),to State Minister and Deputy Prime
Minister Mr. Abdullatif Sener has been forwarded to its
High Addressee.

In reply to this letter, H.E. Mr. Sener informed the
Ministry that in 2005 due to the restraints of
achieving the targets of the IMF economic programme,
the allocations of funds for the highway projects like
Izmir-Aydin highway (including Izmir ring highway) has
been limited. Therefore, in the beginning of this year
the allocation of funds for the project was 23 million
dollars, approximately 18 million of which was provided
through foreign credit.

However, General Directorate of Highways (Karayollari
Genel Mudurlugu) and State Planning Organization
attribute importance to the completion of the Izmir
ring highway which has started 13 years ago.
Therefore, the search for funds will be continued.

Ankara, 29 June 2005. End Text.


2. (SBU) Connelly's letter and Ambassador Edelman's
parallel letters to Finance Minister Unakitan and State
Minister Babacan succeeded in drawing the attention of
the Turkish government at the highest levels to the
predicament faced by General Motors Acceptance
Corporation (GMAC). Both the Under Secretary of the
Treasury and the Under Secretary of the State Planning
Organization told ECON/C in separate meetings that this
issue had received their full attention and that of
their staff. The GOT's basic problem remains
identifying funds for this project within the envelope
of the overall 2005 government investment budget.
However, all or our interlocutors GOT seem to have
grasped our key point that it is important to avoid
turning this into a bilateral, government-to-government
issue, which could become the case if the Highways DG
were to declare GMAC/Dillingham in breach of contract
and thereby call its OPIC-insured performance bond.


3. (SBU) Washington should feel free to share this
information with the company at its discretion.

MCELDOWNEY