Ferdi Sabit Soyer, Prime minister of the Turkish Republic of Northern Cyprus
The Construction sector is continuing its growth

The outburst lived in the construction sector during the last years led to a great deal of liveliness in the economy of the Turkish Republic of the Northern Cyprus but also led to many problems in terms of infrastructure. However, the government is working intensively to solve these problems. Our Prime Minister Ferdi Sabit Soyer set aside some time for us in his intensive working tempo and explained us how the developments lived in the construction sector had been reflected in the government and the solution projects developed for the existing problems.

 

Your esteemed Prime Minister, the construction sector is generally known as the motor sector of economies. Can your briefly inform us about the view of your government to the construction sector?
With the construction sector, a very important movement affecting the economy of the country to a large extent started in Northern Cyprus. In our opinion, the construction sector is not important for us only for its contribution to the economy of the country. We perceive it as a sector that fulfills significant social functions to meet both infrastructure investments and the need for accommodation, which is among one of the most basic needs. For this reason, we give the necessary importance and interest to the construction sector. Many other sectors are activated with the activity of the construction sector. Hence, large contributions are given to added value production.

A very large outburst was observed in the construction sector in Northern Cyprus. People especially started to utilize their lands for investment purposes after the Annan Plan. However, it was observed that this process started to slow down during the last period. Does your government evaluate this as a recession or as a point of balance? 
In my opinion, this development in the construction sector continues in its own routine. This process was emphasized especially as the foreigners purchased property. However, the investments, tourism facilities and other construction projects also have a significant share in the growth of the sector. There are also individual constructions made by our people for their own housing need. Hence the movement in the construction sector is continuing. Of course, a sale of property to foreigners is a significant factor but it is not the factor that led to the growth of the construction sector to a large extent. The factors that I mentioned also contribute to the development of the construction sector. Investment of tourism facilities, opening new factories, determination of new investment areas and start of investments for need of new shops and houses are quite significant. We do not observe a regression in the existing situation.

Well, is it possible to talk about a regression in the real estate market?
The real estate market is progressing in its normal course. There is a certain level of saturation in certain types of real estate; and this saturation shall develop its own rhythm in time. However, we cannot expect ‘big-bang’. Yes, there has been an ‘outburst’ but then the sector became stable. From now on, its stable development shall continue.

FOREIGNERS CAN CONFIDENTLY ACQUIRE REAL ESTATE
As you also mentioned, one of the most important target masses of the construction sector are the foreigners. Factors such as cheap prices, expectations for solutions etc draw foreigners to Northern Cyprus. However, existence of certain problems led to a decrease in this demand to a certain extent. Do you have projects to attract foreigners to Northern Cyprus?
Of course we have. However, there is no doubt that it is very much related with a general solution for the island. Furthermore, the Greek Cyprus part seized the name of the Cyprus Republic unilaterally and is conducting an anti-campaign in the whole world. There are also lobby activities, wrong approaches and legal attacks by using the advantage of being a state known by the world and these lead to unfavorable psychological factors. However all of these are temporary factors. As a matter of fact, the property compensation law that we issued had a positive effect in the international public arena.  With respect to it, the Cyprus Greek part came up with a proposal to implement a moratorium to the Northern Cyprus.  However, this proposal was refused by the Committee of Delegates. Following the refusal of the moratorium implementation in the construction sector, the Northern Cyprus part engaged itself in some irrational behavior. As a matter of fact, to British persons having gone to Southern Cyprus were arrested, now cars are being searched in barricades and people having plans or projects in their cars are being arrested. And they are trying to get back the position that they lost in the Delegates Commission by using psychological factors. Their justification is as follows “you are constructing houses on Greek property”. We observe that some Turkish architects and engineers are arrested with the same justification when they pass over to the South. This shows their frustration. However, we will continue to proceed. Foreigners may comfortably purchase houses from this country. Our people may also continue to construct their houses.

I think we also have some projects to promote foreign investments to our country...
We have plans that provide incentives to foreign investors in all respects. They vary according o the subject. However, the only thing that will not change is the income of foreign investors and showing them the attractive points in our country in order for them to make investments in our country. We especially encourage our local investor companies to engage in business relations as joint ventures with foreign investors.

Not all parts of the Turkish Republic of Northern Cyprus develop in the same manner just like in all other developing countries. Do you consider the implementation of certain investment incentives and priorities for underdeveloped countries?
The development lived so far has been most intensive on the northern coasts. We are trying to attract investments to the western side of the country in order to achieve a balanced development. For instance, we allocated the region between ODTÜ and Güzelyurt for tourism investments. We also allocated extensive areas for the housing and business needs of the young people in the region. However, just allocating the place would not suffice. We also intend to make infrastructure investments such as road, electricity, water etc. We also intend to create development areas with a conscious for the nature and the environment. The Bafra Tourism Investment Region project is already in effect. We are trying to implement them in a controlled manner. We issued certain orders and instructions for Karpaz, Tatlısu, Büyükkonuk, Akdeniz, Sadrazamköy, Koruçamköyü, Bellapais Manastrı and surroundings and central part of Cyrenia in this respect. We aim to continue our development without disrupting the nature.

WE SUPPORT EDUCATION
The education sector in Cyprus increased its reputation especially with the opening of the ODTU campus. The investments made by educational institutions lead to both economic and social liveliness. Dou your have any other plans to attract investments such as ODTU to the country?
Besides many universities that are operating in our country, there are also many other training institutions. We have vocational associate schools. Hence, first of all we aim to increase the qualifications of the existing ones before opening new ones. For instance the Higher Education Supervision Accreditation Committee (YÖDAK) was prepared to develop training standards. Besides, our government is also providing incentives for the construction of student hostels and dormitories to meet the accommodation need of young people more than 42 thousand in universities. We are also trying to develop supports for them in order to increase the social and cultural living standards.

It is being discussed that the Greek part is not giving title deeds to Greeks living in Turkish property but not so much attention is being given in the Northern part. It is said that this could lead to problems at the stage of solution. How do you evaluate these discussions?
The Solution Plan of the United Nations including the Annan Plan approaches the problem of propriety in a whole and integral manner. It was requested to find a solution within the framework of concepts such as clearing, exchange, compensation and return. However, the assertion that the Greek Cyprus did not give title deeds for the Turkish property is not correct. The property of the Turkish population in the south has been seized to a large extent. Some of them were nationalized in an unnecessary manner or were given to public use without being nationalized. Hundred houses were made for migrants for an important part of these properties and title deeds were given to them. This matter can only be resolved in a whole an integral manner. The Cyprus Greek part carried this matter to the international arena. They applied to the European Court of Human Rights and issued orders such as the ‘Loizidou’ case. The previous administrations did not show sufficient interest in this matter and did not make serious defenses. Hence, no international lawsuits had been filed with regard to the Turkish property seized in Southern Cyprus.

Does your government give any efforts in making an inventory work in this manner?
We are continuing to work on this subject. Our government had significant advances in meeting challenges in international cases. For instance, there had been the ‘Hurma’ case that had been on the agenda for a long time. Then some arrest warrants had been issued. Now ‘Hurma’ is not in the agenda anymore, we solved it and we are continuing. In order to deal with these issues, we are also carrying the matter of seizure and unfair implementations for the Turkish properties in the South to international courts.

Within this process, concepts such as equivalent, Greek origin and Turkish origin become predominant. What is your opinion in this respect?
This differentiation will always exist until the Cyprus problem is solved. However, I believe that following the acceptance of the Property Compensation Law as a legal basis within the framework of the European Court of Human Rights, such differentiations shall end.

STANDARDS WILL BE INTRODUCED FOR IMPORTED MATERIALS
A large part of the raw materials of the construction sector are imported. Do you plan to introduce standards and an audit process for the construction materials imported?
“Standards” are very important in order for us to be able to use resources correctly and provide high quality service for our people. We are working for this purpose. First of all our government is providing the necessary support to the Chamber of Electrical Engineers. A laboratory has been founded to set the standards of all electrical devices to be imported and the materials to be used in the construction sector and to audit them. We will have more detailed studies in this respect in the future.

We hear that some of our citizens complain from high prices. Will you have social residence projects that will need accommodation needs?
Currently we are conducting a study in this respect. Vakıflar Bank is preparing a package with cheap and attractive credits for the young people that will purchase their first house. A few citizens can come together, agree with a company and have their houses constructed by that company or they may construct their houses by themselves. We will support such developments. However, we will not initiate social residence projects through the state as we used to do before. We will mainly encourage the private sector for this.

As we know, Cyprus is in the earthquake zone. Do you have preparations for an earthquake regulation?
An earthquake map is being prepared in cooperation with ODTÜ Civil Engineering Department. The Earthquake regulation prepared in 1998 in this respect shall be in conformity with the contemporary conditions.

THE INFRASTRUCTURE OF ENERGY IS BEING RESOLVED
Another important problem for the Turkish Republic of Northern Republic is infrastructure. Important problems are encountered with especially about energy and water. What is your government doing for the elimination of infrastructure problems?
We will definitely solve the energy problem. This issue has been neglected for many years. We will overcome this problem by the end of 2006. In the first place, we made an agreement with a company from Finland for the construction of an electrical power plant of 70 mega-watt energy capacity. It will cost 25 million Euros and the investment will be completed within 6 months. However, this power plant is not sufficient to solve the existing problem. Hence, we also have other problems;

 

 

 

 

 

ALTERNATIVE ENERGY RESOURCES ARE ON THE AGENDA
Will the electricity problem be solved with these projects that you cited?
I cannot say that the energy problem will be finished with these investments. However, I can say that there will not be electricity cut off problem by the end of 2006. We need a Distribution and Reduction Center and its budget can be formed in 2007. However, we aim to use the investments of Turkey in infrastructure. We will solve the problem with the budgets to be provided by the Turkish Republic of Northern Cyprus, the electricity institution and the aids to be received from the Turkish Republic. Besides, we are issuing an Alternative Energy Sources Law. We will take definite steps in producing electricity from wind energy. We will cover 20 percent of our electricity need from wind.

Besides the energy problem, there is also the problem of water, which has become quite significant. Do you have material measures in this respect?
The problem of water is also a very significant problem. The project of bringing water from Turkey has reached serious stages both in Turkey and in Cyprus. Currently, a vessel is investigation the base of the sea between Turkey and Cyprus. All the feasibility work has been completed. We do not speak much about it. Also, our Council of Ministers developed the project of transforming sea water into freshwater to provide water for tourism facilities. Our Electricity Institution is also generating freshwater from seawater in vapor turbines in Teknecik. We will soon present this to the use of all Cyrenia.  Our dam construction project in Güzelyurt is also in effect.  We finalized a tender process in Bafra to generate freshwater from seawater.

THE MOST IMPORTANT VALUE IS HUMAN
The problem of traffic is also growing with the increase of new settlement areas. What is the dimension of works with regard to investments on roads?
Many nice progresses are taking place about roads but we still have some problems. There are many crossroads on the roads that had been planned in the past and these lead to problems. Since we do not have passages from under or over the roads, there is a problem of traffic security. We also have plenty of roads that are left as half-constructed. For instance the eastern part of the northern way is in progress. We started the construction of a coastal road starting from Tatlısu until Büyükkonuk. Meanwhile, the construction of the Cyrenia highway is in progress and the first stage of the double lane project for Nicosia-Güzelyurt is finalized as well. Other works on roads will continue as well. We receive some criticisms about matters such as security on roads, flow of traffic as well but we will not give up the implementation of our traffic fine measure for deterrence purposes. We will continue our efforts to provide security on roads by fixed cameras. All of these measures are valuable but the most important asset is the increased level of consciousness of people and their respect for themselves and their environment.

We saw that some foreign contractors did not finish the works that they undertook although they got money from people and some people were mistreated for this reason. Contractors that are not registered to the Union find ways of making constructions. Do you have any efforts t prevent this?

Those that are not member to the Union of Cyprus Turkish Contractors may not conduct business in our country. However, it is necessary to come up with some new legal arrangements. We prepared a draft law to protect our companies, the consumers and to provide a health and stable development: The Real Estate Brokers Law. In this manner, we imposed certain obligations, responsibilities and legal guarantees both for the seller and the buyer. We believe that the problems of implementations shall be overcome when this law comes into effect.

Your esteemed Prime Minister, thank you very much for your sincere answers. Finally, we would like to know if there is any message that you would like to convey through our magazine to the representatives of the construction sector.
We are asking all the representatives of the sector to continue working, but we want them to do their work good and with high quality. It is our duty to increase the purchasing power of our people, to take measures that will develop their quality of living and meet their need of accommodation. For this reason, we continue to develop the economy of the country as a whole, to decrease costs and increase purchasing power. All opinions and proposals in this respect are valuable for us. Our government is open to the opinions and proposals of all representatives of the sector to provide further development for our country.

 

(Construction Magazine / April 2006)

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