Turkish Government Considers Selling Operating Rights to Izmir’s Alsancak Port to Persian Gulf Government

The Turkish government is engaging in discussions with a government in the Persian Gulf to potentially sell operating rights to Izmir’s Alsancak port complex, as it grapples with economic difficulties. The Alcancak port is a versatile port on Turkey’s Aegean coast, equipped with a container terminal for 1.1 million twenty-foot equivalent units (TEUs), as well as substantial facilities for dry bulk, breakbulk, and roll-on/roll-off (roro) cargo. Despite its relatively shallow draft averaging 36 feet, the port manages approximately 2,000 vessels and nine million tonnes of cargo on an annual basis.

Managed by the Turkish State Railways (TCDD) since the 1980s and owned by the Turkish Wealth Fund, the port previously witnessed an attempted privatization in 2007 that resulted in a winning bid, valuing the port at about $1.3 billion. However, the privatization process was halted in court, and the port has since remained under state-owned management.

In light of Turkey’s pressing economic needs, the government is now seeking to change the port’s ownership. Ongoing investment discussions with Persian Gulf governments have presented an opportunity to sell the operating rights. If the previous privatization attempt serves as an indicator, this sale could generate billions of dollars in much-needed revenue. Turkey has been confronted with a persistent current account deficit, leading it to take drastic measures to generate foreign exchange, preventing trade challenges faced by countries such as Pakistan, Egypt, and Sri Lanka. In fact, President Recep Tayyip Erdogan revealed that Turkey has already received undisclosed financial assistance from friendly countries in the Persian Gulf, including a $5 billion cash deposit from Saudi Arabia.

The Turkish government is grappling with multiple economic challenges, including rampant inflation at 38 percent year-on-year and the declining value of the Turkish lira, currently reaching a record low of 26 to the US dollar.

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