Tuesday, 29 October 2013

Symbol of Turkey's Ambition Opens Underground

World's Deepest Immersed Rail Tunnel Set to Open

ISTANBUL—Prime Minister Recep Tayyip Erdogan opened a tunnel under the Bosporus Strait on Tuesday that has been a dream of Turkish rulers since an Ottoman sultan first proposed linking the European and Asian shores of this bustling metropolis in 1860.

"Today, with this big project, we're enriching our republic and also proving what a democratic republic can accomplish with stability, confidence, brotherhood and solidarity," Mr. Erdogan, shown above, fourth from right, told dignitaries including Japanese Prime Minister Shinzo Abe, second from right, as tens of thousands of people cheered and waved flags.

"Marmaray is bringing together people, nations, countries just as much as it is joining continents," Mr. Erdogan said.

The government's development push has seen an infrastructure and construction boom that has helped Mr. Erdogan triple Turkey's economy to $786 billion since his party swept to power in 2002. The premier is seeking to build on that success by raising gross domestic product to $2 trillion and making Turkey one of the world's top-10 economies by the time the republic turns 100 in 2023.

More than $400 billion of huge new infrastructure projects are expected to help anchor GDP growth again over the next decade.

The government's ambitions include one of the world's biggest airports; a canal through Istanbul's European flank to connect the Black Sea and the Marmara Sea for commercial shipping; three nuclear-power plants; and an urban-renewal project to protect against earthquakes.

Analysts warn that mounting financial and political pressures could hamper Ankara's ability to finance those projects, with the economy slated to slow and more risks to the outlook.

"It will be very difficult to raise international financing," said Nigel Rendell, an economist at Medley Global Advisors in London, in part because the U.S. Federal Reserve is likely to call a halt next year to its stimulus efforts, which helped create liquidity for developing economies such as Turkey's.

"Secondly, and more crucially," Mr. Rendell said, "people's confidence in Turkey took a hit with the protests over the summer, when Erdogan was seen as an autocratic leader by the international community."

Turkey's decade of political stability was briefly shattered in June with massive antigovernment protests, which persist but on a smaller scale. The country will also soon enter an election cycle starting with local races in March and ending with a national election in June 2015.

In September, Turkish banks picked up the $2.3 billion tab for Istanbul's third bridge across the Bosporus amid lack of demand from international lenders. The government scaled down the project after failing to elicit bids for the project, which was initially expected to cost $6 billion.

Still, officials dismiss views that Turkey will struggle to raise about $300 billion of debt to pay for its infrastructure projects.

"There won't be any financing difficulties," Transportation Minister Binali Yildirim said Sunday. "Because of global circumstances, everybody is looking for stable countries to invest in, such as Turkey. All around, there is either economic crisis or war, but we have economic stability and growth. If international organizations aren't going to lend to Turkey, they might as well pickle their cash."

The Marmaray is the world's deepest immersed rail tunnel, consisting of 8.5 miles of concrete and steel tubes, with one nearly mile-long portion stretching along the seabed at a depth of more than 200 feet.

Source: The Wall Street Journal

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