Remembering Contract Negotiations In London (2001) – OpEd

In 2001, we entered the tender for the transfer of operational rights of a large fossil fueled firing thermal power plant in the Western Anatolia region. We gave the best price and it was found the most affordable offer, the job remained with us, but the license fee we will pay was very high, it was not possible for us to pay it alone.

We started looking for a competent foreign partner to undertake partial share of the financing and operation of the thermal power plant. There were those who were interested in American and European companies. We chose the reputable companies. We sent them detailed feasibility and due diligence reports in English.  Officials of interested foreign companies and their proficient expert operators came to our Istanbul headquarter. We held face-to-face meetings. An American group wanted to see the power plant  operation on site. We flew to Bursa with a private helicopter from a helicopter field on the ridges of Istanbul Sarıyer. Apart from the two pilots, there were three people from us and five from the American company in the helicopter.

We arrived at the terminal named heliport in Bursa Organised Industrial Zone in 20 minutes. We drove for an hour with the bus waiting for us, we arrived at the thermal power plant. We saw and  inspected the operation on site. The power plant was burning the local coal very well. The new flue gas desulfurization system had just been activated. Dust filters were doing their job properly. We had dinner at the power plant and returned to Istanbul on the same evening. The foreign technical experts were satisfied and returned to their country the next day.

Then they invited us to negotiate financing and legal contracts at a hotel in central London.

We flew from Istanbul to London THY business. We reached the center from the airport by metro. We settled in the JW Marriott hotel. The place we stayed was near Oxford street in the center of London. We negotiated contracts with lawyers for a week in a ten-person conference room of the same hotel.

During their time with us, there were highly trained British lawyers and financing consultants who received a fee of 250 British pounds per hour from their clients they represented.

Meanwhile I got cold somehow while flying from Istanbul to London on  business THY. A flu condition called summer flu started in me. I had a runny nose. I had  fever. I could not lift my head in meetings. The first day, I went to nearby Boot’s, an over-the-counter drug store on Oxford Street. I explained the situation to the seller, I took severe drugs like aspirin-paracetamol. I took one each after meals. I was taking the meetings difficult.

Meanwhile, on the first night the British employees of the American company with which we will cooperate took us to a Turkish restaurant in London, as if they were being kind to us, as if it was so necessary, as if we did not know any Turkish cuisine. They did not neglect to say “it was very good”. It was a Turkish restaurant with many branches in London. The shish kebab that came before us was obviously awful. The red-white wines that came were the kind that we wouldn’t look at the cheapest face on the local market. I don’t know why, wherever we go, people will definitely take us to a fake Turkish restaurant. It is unlike anything you eat next to the artisan restaurants of our country that make great Turkish food. You often go hungry in foreign lands. Fortunately, the next lunch we went to the newly opened Vietnamese restaurant named Saigon. We had a large plate of chicken with vegetables, it was really great.

My job was tough, I kept all the meeting notes in English with the laptop PC I brought with me. After the meeting, I distributed all the notes, then translated them into Turkish and sent them to Istanbul via e-mail. Then I went to bed and sleep all night. My fever fell on Friday morning at the weekend and then I recovered.

We held the last meeting, we objected to the Turkish restaurant offer that evening and had dinner together at a very good Italian restaurant close to the hotel, and we returned to Istanbul on Saturday.

Our British counterparty was unprepared in the negotiations, they learned everything from us at the meeting, they listened to us, and then they spoke in English for hours on legal and finance terms. Finally we closed the deal. We drafted the contracts to be signed by the decision makers of both sides. 

Our boss’s command of English was not good, so I had to translate everything that was spoken, into Turkish.

We returned to Istanbul, but there was an uncertainty in the projects, and then there was a distrust, abstention, and a neglect in our foreign partner. They scrutinized the feasibility, found the earnings, recycling figures, the payback period of the investment less, unreasonable low, they left the work to time. They started dodging.

Then the projects were evaluated in social environments in the country, the transfer of public resources to private ownership was discussed in detail, and then political political decisions were effective. Contracts for the transfer of operating rights were completely canceled. The expenditures made by private companies in this regard were returned to them.

Years have passed, and these local fossil-burning public power plants were again included in privatization. Everyone thought that after privatization, thermal power plants would be operated better. 

We thought that investments would be made and incomplete environmental equipment would be added. Studies on this subject have been delayed. Most companies that bought the power plants started to operate the plants at full capacity until the end, delaying their investments in environmental equipment.

Today, thermal power plants have reached the end of their useful economic life. Big equipment steam turbine builders no longer manufacture for thermal power plants. They do not respond to requests for proposals. They do not even serve, they cannot.

During the Covid-19 process, it is not possible to bring employees to closed mines and let them work there for a long time. Local coal lignite will probably remain underground for a while from now on and other opportunities will be sought for use. Let’s accept the reality of the world markets. There is no longer any financing for the construction of domestic coal-lignite firing thermal power plants. Developed countries are slowly closing down the old ones and not building new thermal power plants. Markets do not provide equipment or finance. In the new world after Covid-19, it is not incorrect to say that there is no easy solution for energy generation other than renewable energy investments.