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b_300_200_16777215_00_images_zzz-1.jpgSupported by the Friedrich Naumann Foundation for Freedom, Competition Association held a conference on ‘’Competition in Construction Markets: Infrastructure, Housing and International Construction Markets’’

The workshop was held in three sessions with the attendance of various stakeholders in the relevant market.

b_300_200_16777215_00_images_zzz-3.jpgIn the first session, which was on public tenders in infrastructure markets, Assoc. Prof. Uğur EMEK from Başkent University made a presentation. In his presentation, he argued that cost-decreasing revisions that are made for projects whose tenders ended with a certain estimated cost are giving rise to unfair competition. According to the author, the fate of the abolishment of 15% cost advantage that is being granted to domestic firms currently depends on the accession negotiations between Turkey and the European Union. In this way, foreign firms cannot compete on an equal footing with domestic firms (a version of such discrimination is already present at the EU level too). As the author suggested, exemptions are generally important in public tenders and the reason why exemptions are being widely granted is due to the rigid regulations in public tender laws. He took the view that the setting up of different companies that by the same person must be prevented and the Turkish Competition Authority must take legal action against competition law violations in public tenders.

In the second session of the workshop, Dr. Yener Çoşkun from the Capital Markets Board of Turkey presented the topic of competition in housing markets. He made the following important points: Turkey is following a real estate oriented growth strategy. Turkish consumers’ love of real estate creates a strong driving force in the market. On the other hand, the rate of real estate ownership does not increase in Turkey. The market creates significant negative externalities due to the utilization of more than 200 inputs. Despite the rapid rise in the supply of real estates, real estate prices have increased by 68%. 45-50% of such price rises are due to an increase in quality. According to recent debates, entry into the market is easy and there is competitive pressure as a result of numerous firms in the market, but product differentiation in the market is liable to create an anticompetitive effect. 

b_300_200_16777215_00_images_zzz-2.jpgIn the last session of the workshop, which was in competition in international housing markets, Mr. Bülent Atamer, Assistant Secretary General of the Union of Contractors, and Mr. Serkan Çatalpınar, Attorney of Limak Construction Inc., delivered a speech on the topic. In this session, it was shown that the performance of Turkey in international housing markets was highly satisfied with a 4% global market share. In this respect, Turkey ranked second after China. Despite this performance, Turkish contractors do not have the adequate financial resources to undertake mega projects themselves. For this reason, Turkish contractors are in fact subcontractors in mega projects. One important observation made in this session was that Turkish subcontractors are experiencing some difficulties in making use of Turkish work force during international projects, which is mainly to certain unpredictable local laws. Furthermore, because there are not so many Turkish consulting firms that can operate at the global level and therefore agreements were designed by foreign firms, goods of Turkish origin are not being sufficiently used. Some of such goods also fail to meet international standards.