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Intercontinental tunnel to increase Istanbul’s momentum

Interview - September 26, 2013
The largest independent consulting and engineering firm in Turkey, Yuksel Proje is the only local partner of Avrasya JV, which is supervising Istanbul’s Marmaray project that is creating the first transcontinental subway and railway system in the world under the Bosphorous Strait. Cemal Karaoglu, Vice-Chairman of Yuksel Proje, discusses the company’s expansion and its local and international projects, as well as Turkey’s insatiable need for affordable housing
Turkey is going through an exciting phase at the moment. In a period of global economic recession, Turkey has been the fastest growing economy in Europe, for two out of the last three years, and is even projected to post a respectable gross domestic product (GDP) growth figure of 4% for 2013. What impact would you say the construction sector and indeed Yuksel Proje have had on this impressive growth?

Yuksel Proje has been working mainly with the Turkish government authorities such as the State Highway and Infrastructure Authorities. We not only do engineering consultancy work, but also provide engineering, design and construction supervision services on behalf of these authorities. We also work for the municipalities. 
Istanbul is perhaps the most important city that we work in, as it is for every engineering and consultancy firm. With the constantly increasing population, Istanbul faces many transportation and infrastructure problems. At Yuksel Proje, we try to address these issues as much as possible. The municipality’s main focus is on adding new lines to the current subway system. We are the only local partner of Avrasya JV, which supervises the Marmaray project. As you know, Marmaray will be the first transcontinental subway and railway system (going under the Bosporus) in the world once it is completed.

As a part of Marmaray, the Bosphorus Tube Crossing will start operating by the end of 2013. It is also expected that the whole system will be in service in a few years. We believe that Marmaray will mitigate the traffic and transportation problems in certain areas since it will be a direct connection between Halkali on the European side and Gebze on the Asian side of Istanbul. Total length of the system will be 63.5km and there will be 40 stations on the line.
I believe anyone, whether they support the government or not, will admit that this government highlights the importance of transportation in Turkey. They have been investing in roads, airports and communication during their period. They believe that investment in a county’s transportation system accelerates the growth of the county’s economy, cultural relations, and of course commerce. Hence, there will be many projects to be completed in this realm since transportation is one of the dominant sectors in Turkey. 
This is one of the most ambitious and impressive engineering feats that has ever been undertaken in Turkey. You have been a part of this since the beginning. Can you tell us about the process and some of the difficulties you have had, and how gratifying that must be?

Marmaray has been an exciting but challenging project for us, and we are hoping that it will be very beneficial for Turkey. The railways of Marmaray cross the Bosphorus, through the sea, which make it a relatively arduous technical-engineering project for everyone. We are also completing this project in a short amount of time.

But Japanese technology has certainly helped us! In addition, during foundation excavations, many historical artefacts from the Byzantine era were found. It was important to us that these remains, including traces of the city wall, ships, pottery, and animal and human skills dating back to 6,000 BCE were safely excavated.

This wasn’t a foreseen incident, so it caused delays. But it definitely was an example of serendipity. Now, the excavated artefacts will be displayed in a museum that is planned to be built in Yenikapi. 
Clearly transportation is one of the bigger problems in Istanbul, and obviously the Marmara tunnel is going to play an important role in alleviating that. But what is the long-term economic impact in your view?

Life in Istanbul will be even faster; there is no doubt about that. Today, citizens of Istanbul spend so much time in traffic. It takes two to three hours to travel from the Asian to the European part of the city. After Marmaray is completed, it is expected that the travel time will decrease to 45 minutes. Istanbul is a city where a lot of business and commerce is done, therefore reducing the time spent on roads will have a great impact on the citizens’ lives, and the economy. As you may know, almost 50% of our total taxes are collected from Istanbul city. This means a lot. This means there is an enormous load on this city. But I believe Istanbul is more than a financial city. It should be mainly recognised by its natural beauty and historic heritage in addition to its business potential. 
Now that this has been completed successfully, do you think there will be other Bosphorus tunnels? 
Even though there won’t be more metro lines going through the Bosphorus, there will be another tunnel constructed for light vehicles. I believe this will be more than enough for now… It is true that Istanbul is geopolitically and economically very important, however, we must not ignore its cultural, historic value, and its nature. It is important to protect what the city has to offer its citizens and humanity. It would be great if businesses spread out to other cities in Turkey. I believe this would help mitigate the excessive population and traffic problem in Istanbul.
Yuksel Proje was founded back in 1978 and I just wanted to learn a little more about its journey. It is the largest independent consulting and engineering firm in Turkey. How have you grown from humble beginnings to become an industry leader?

Our shareholders are both employers and employees in the company. Almost all our shareholders are engineers and they are working under this roof. In addition to their salaries, our employees receive a share of 30% of Yuksel Proje’s profits. This certainly is a great motivation for everyone who works in the company. I would say that this is the main reason for our success.

At the moment, our focus is on the transportation sector. We have been – and still are – working with our neighbouring countries. We recently completed a project in Georgia – the design of the Sofia subway in Bulgaria – and we have on-going projects in Algeria and northern Iraq. We also hope to expand our projects in the hydraulics-engineering sector. 
What is your transportation plan for northern Iraq? Are you building a railway?

We are not building a railway, but rather a highway tunnel, from Dohuk to Turkey. I travelled to Erbil quite a few times, and got to know the city. I can see that the city has been developing rapidly. 
When you look at both the domestic and international construction sector, it is very competitive and still growing tremendously. Where do you see opportunities for Yuksel Proje?

We did not get a chance to work in Asia yet, and we are looking forward to that. We are currently searching for new opportunities and projects and following tenders in Turkmenistan and Kazakhstan. We are trying to set up offices there as well. 
What do you think that Istanbul’s 2020 Olympic bid would have meant for the country, as it would have been the first Muslim country to host it and Turkey’s first Olympic Games? 

Hosting the Olympics in Istanbul would be a great opportunity for Turkey, both economically and culturally. Istanbul is a great city for tourists with is historic, cultural monuments and natural beauty. However, Istanbul needs a lot of improvement before hosting such an event. We must solve the population, infrastructure and transportation problems before any thing else. If we can achieve this, Istanbul would be one of the best places for a future Olympic Games.
Given how highly regarded the construction sector is in Turkey, there is clearly a lot of competition. What are your competitive advantages? How do you differentiate yourselves and what are your strengths as a company?

Due to its size, structure, quality of employees and successful past experiences, Yuksel Proje satisfies the criteria for any tender. There are some tenders where Yuksel Proje is the only bidder since not a lot of companies meet the tender requirements. For example, we were the only bidder for the second tunnel; therefore the tender will be repeated.

Our partnerships and close relations with established foreign companies also play a tremendous role in our achievements. We partner up with the most successful international companies around the world, especially from Japan, England and the US. With these partnerships, we are capable of fulfilling many tender requirements.
We are publishing in the UK, and for potential UK investors who would like to enter the Turkish market in construction or other sectors, what advice would you give to anyone who is interested in investing in Turkey?

Even though there has been great improvement in the past few years, Turkey is still struggling with housing issues. There are many new, updated apartments, complexes and residences being built in cities, especially in Istanbul. However, these are quite expensive, and therefore not convenient for most of our population. Turkey is in need of affordable, healthy living environments with good infrastructure instead of expensive residences and houses. Foreign investors can certainly get involved in these types of investments. 
Earlier this year, the British Government pledged that it would give £100 billion of investment to redeveloping transport links in the UK. That puts the UK in a similar position to what Turkey is doing, developing. What do you think Yuksel Proje as a company will take from watching countries like the UK put new technology and methods into place?

Certainly! We as a nation and as Yuksel Proje have a lot to learn from the UK when it comes to methods, and the PPP (public-private partnership) style projects are good examples. It would be great to collaborate with UK-based companies to learn more about PPP law. The Turkish Ministry of Health held a PPP-style-based tender. I wonder if they were successful, because I had my doubts about its management. 
As Vice-Chairman of Yuksel Proje, if we were to come back here again in five years’ time and interview you, optimally what accomplishments or achievements would you have liked to have completed?

One of our main goals is to increase our turnover. The other one is increasing the number of skilled personnel. Our employees are very important and valuable for us! We would especially like to increase the number of engineers. We currently are about 1,000 people in the company, but this number was around 500 three years ago. The projects that we worked on increased drastically and hence the number of our personnel. 
So you are going to continue with this growth?

We hope so. We have expanded and completed successful projects in many foreign countries over the past five years. Some of the local engineering firms offer partnerships for the new projects and that is just because of our successful achievements in these counties. 
What final message would you like to send about Yuksel Proje or even about Turkey as a whole?

I believe Turkey is a great place to invest in. It has a very young, vibrant, energetic population that is capable of achieving a lot of things. With their spirit and vision, they can be successful in any sector.

As new graduates, young men and women may not satisfy a lot of conventional criteria, but I advise them to endure. What I see is, our young generation is very keen on learning. With these qualities, there is no doubt that they will be successful. Most of our employees are graduates of Turkish universities, with a great number of Middle East Technical University graduates.