The energy investments were blocked due to the World Bank's opposition to Treasury-guaranteed contracts. The two companies suing Turkey are demanding 300 million dollars in compensation.
PSEG Global and North American Coal Corp., the two American utility companies that were carrying out the Ilgin thermal power plant project in the central Anatolian province of Konya, filed a lawsuit against Turkey at the ICSID. If Turkey loses the case, the state will have to pay 300 million dollars in compensation.
PSEG Global and the North American Coal Corp. took their cases to the ICSID when the Turkish government, due to the World Bank's opposition to Treasury-backed contracts, halted the Ilgin thermal power plant project.
ICSID has given notification to the Turkish Embassy in Washington regarding the subject. In the petition presented to the committee on March 25, the two American companies designated the defendant to be the Ministry of Energy.
300 million dollars in compensation
The American companies, which are demanding 300 million dollars in compensation, claim that certain Turkish bureaucrats hindered their projects.
Other foreign companies whose investments were also halted, are likely to follow the example of PSEG Global and North American Coal Corp., and file lawsuits against Turkey.
Among projects of companies whose investments were halted, are the constructions of thermal, wind and hydro electrical power stations.
The legal procedure regarding the transfer of rights of operation of the thermal power plants and distribution companies is still uncertain. This uncertainty is encouraging companies that have completed all stages of their projects, into taking legal action.
29 ongoing projects
Many consortiums consisting of companies from all over the world have been given rights of operation or build-operate-transfer model of investments in Turkey since the year 2000. These rights of operations and investments were halted following the World Bank's opposition to the Treasury-backed contracts.
Turkey, which has halted many companies' projects, decided to implement 29 build-operate-transfer projects.
Companies whose projects were halted expected a solution to their problems after Turkey adopted international settlement for trade disputes. However, no progress was made during the talks with the Ministry of Energy.
Companies that halted their investments had been threatening the Turkish government and saying that they would take their case to the ICSID. (EA/NM)
