The international engineering, construction and services group, Balfour Beatty, has announced that it has decided not to pursue its interest in the Ilisu dam project in Turkey.
The decision follows a thorough and extensive evaluation of the commercial, environmental and social issues inherent in the project, says the company. With appropriate solutions to these issues still unsecured and no early resolution likely, Balfour Beatty believes that it is not in the best interests of its stakeholders to pursue the project further.
Commenting on the move, Balfour Beatty Chief Executive Mike Welton said: ‘Our determination to consider this project in a thorough and professional manner has remained consistent since we were first invited to become involved. We have followed all the appropriate steps to evaluate its viability and have not been deflected from proper, professional processes.
‘The urgent need for increasing generating capacity to meet Turkey’s development needs and for social and economic development in the region remains,’ he added. ‘We have, however, clearly reached a point where no further action nor any further expenditure by Balfour Beatty on this project is likely to resolve the outstanding issues in a reasonable timescale.’
The complex environmental and social issues which the project involves have been the subject of intensive study. A comprehensive environmental impact report, funded by the contractors and involving many months of intensive investigative work, was completed and published earlier this year. This study was carried out by a team of international experts to the best available international standards as defined by the US Ex-Im Bank and the OECD, said Balfour Beatty.
The report details the principal social and environmental issues associated with the dam’s development and construction and offers recommendations to the dam’s proponents, the Turkish General Directorate of State Hydraulic Works (DSI). Its recommendations set clear benchmarks which require substantial actions on the part of the customer and other Turkish government departments and agencies.
Commercial discussions between the DSI and the consortium of which Balfour Beatty is a part have also been under way for a considerable period. The parties have, however, been unable to agree in some areas and a number of commercial issues remain unresolved.
Given the substantial difficulties which remain to be addressed, including meeting the four conditions set by the Export Credit Agencies, Balfour Beatty believes the project could only proceed with substantial extra work and expense and with considerable further delay.
Accordingly, in concert with its international partner in the civil engineering joint venture, Impregilo of Italy, it has decided to withdraw from the project.