Izmit Water Supply Project

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In March 1996, the local government of Izmit, Turkey, granted a 15 year build-own- transfer (BOT) contract for a new water supply system to private consortium Izmit Su AS. The project included the construction of a 110 meter high and 400 meter wide earth damn with a 60 billion liter reservoir. The dam was designed to have a catchment area of 258 square kilometers and connect to a treatment plant with a capacity of 480 million liters a day and a pipeline network with a total length of 146 km. Along the way, some 38 service reservoirs and 6 pumping stations would complete the water delivery system. The project included a three year building period followed by a 15 year period in which the private concern would operate the system. The water system was designed to serve some 1.2 million people using 50% of its capacity. The remaining 50% of the water was to be used by the local industry. In 1996 this was the largest privately funded water project in the world. Izmit Su AS was a special purpose joint venture company created by Thames Water (25%), local private contractors Gama Endustri (25%) and Guris Insaat (25%), and Japanese trading houses Mitsui and Sumimoto (25%). The Japanese trading houses raised debt finance guaranteed by the Turkish government for 85% of the project cost. The remaining 15% was financed by equity. There was an indirect guarantee via sub loans from the Municipality of Izmit. By March 2001 Thames had increased its stake in the project to 55%. No information on the remaining sponsors was available. Thames Water became a subsidiary of RWE in 2001. The project was expected to cost some $900 million. The construction phase of the project was completed in November 1998, five months ahead of schedule. Operation began in January 1999.