2020 bidding wars among Turkey’s pro-gov’t firms led to regulatory agency complaints

Competition among companies known to be close to Turkey’s ruling Justice and Development Party (AKP) to win public tenders resulted in several complaints about one another to the Public Procurement Authority (KİK) in 2020, the Birgün daily reported on Wednesday.

The complaints to the KİK, which were revealed in reports released by the regulatory agency on Jan. 13 and Feb. 3, include the names of two of the five businessmen and their companies who are referred to by opposition parties as the “gang of five” for having won nearly all the large tenders during the time in office of President Recep Tayyip Erdoğan.

Cengiz Holding Chair Mehmet Cengiz, Limak Holding CEO Nihat Özdemir, MNG Holding Chairman Mehmet Nazif Günal, Kolin Construction CEO Naci Koloğlu and Kalyon Construction Chair Cemal Kalyoncu comprise the so-called gang of five.

According to one of the reports, Cengiz Holding complained to the KİK about Limak Holding regarding documents submitted by the latter in a tender to supply electric power to the Hatay Water and Sewerage Administration (HATSU) on Nov. 23, 2020.

Although Limak’s electric power company initially had won the tender, the KİK disqualified it following a complaint from Cengiz Holding that said Limak’s bidding documents involved elements that contravened Public Procurement Law No 4734, which aims to ensure transparency, competition and fairness in public tenders.

According to World Bank data, Cengiz and Limak are two of the world’s top 10 private sponsors of public infrastructure projects for the years 1990 to 2020. The firms have also been partners in many tenders for the construction of highways, bridges and airports in Turkey, the best-known of them being the new İstanbul Airport.

Another report revealed that vehicle manufacturer BMC’s owner Ethem Sancak, a former member of the AKP executive body and an ardent supporter of Erdoğan, complained to the KİK about Karsan, also a vehicle manufacturer that won a tender held by the Kocaeli Metropolitan Municipality for the purchase of 109 buses on Oct. 15, 2020.

Despite the fact that Sancak’s complaint said Karsan should have provided more documents for the tender, the KİK didn’t annul it, explaining that the missing documents could be provided later on, Birgün said.

Cengiz Holding first came to public attention in late 2013, when Turkey was shaken by the news of two corruption investigations in which senior ruling AKP politicians were implicated. The company’s owner, Mehmet Cengiz, was heard in wiretapped phone conversations cursing the Turkish people.

However, all the police and prosecutors involved in the case were fired due to Erdoğan’s interference, with the majority of those police officers still behind bars.

The opposition parties accuse Cengiz and Limak’s Özdemir, among others, of tender-rigging and claim they are among Turkey’s biggest tax evaders.