Which Turkish construction companies in Russia will continue to work?

The tragic event in the Syrian sky, which occurred on November 24, 2015, dramatically affected the relationship between Russia and Turkey. This has affected virtually all areas: political, trade and economic, tourism and construction. The latter is particularly acute, because today the Turkish construction companies in Russia own a lot of construction projects that require completion. What decision did the authorities take?

Su-24

On the morning of November 24, 2015, the Russian Su-24 bomber, returning to the base from a combat mission, was shot down by Turkish fighters on the Turkish-Syrian border. The history of this case begins in June 2012. Then the Syrian anti-aircraft defended the Turkish fighter F-4. In response, the rules for the use of armed force were revised and a decision was made to intercept objects (sea, air, land) moving towards the Turkish border and violating it.

Regarding the case with the Russian Su-24, the Turkish side claimed that there was a violation of the air border. However, the international investigation did not confirm this version. In addition, the catapulted navigator of the Russian bomber - Oleg Peshkov - was fired and killed during the landing. Victims also became members of the Russian rescue operation, which was directed to help the second navigator - Konstantin Murakhtin. All these violations were the reason for the deterioration of Russian-Turkish relations.

Effects

The tragic incident dragged a lot of consequences. In particular, sanctions measures were taken that touched on food, textile Turkish products. Since January 1, 2016, charter flights, tourist connections and hiring of workers from Turkey have been banned. Special damage to inter-economic relations was caused by the restriction of the activities of Turkish organizations on the territory of the Russian Federation to provide them with services and perform certain types of work. First of all, this affected the construction industry.

White list

Back in November 2015, just after the incident with the Su-24, State Duma deputy Vadim Soloviev was asked to liquidate the Turkish construction companies in Russia. And already from the beginning of 2016 this proposal has only partly begun to be realized.

Right away from the services of Turkish developers to refuse to disadvantage Russia itself. Therefore, the government prepared a "white list". He clearly decides which Turkish construction companies will remain in Russia and will continue to work contrary to sanctions. This move was justified by the simple implementation of contractual terms. Only after the completion of the construction of certain facilities and the terms of contracts with Turkish developers will the sanctions against them take effect, and they will leave the Russian market. The contracts with them will not be concluded any more. An example of such temporary "privileges" are unique projects (for example, preparation for the World Cup in football in 2018), which Turkish construction companies in Russia must implement.

The list comprised: Enka, Esta Construction, Ant Yapi, Renaissance, Odak, etc. The new resolution allowed the work of these companies to continue in 2016, but limited the number of workers from Turkey. These are large Turkish construction companies in Russia, whose sales for a couple of quarters of the normal operating regime bring hundreds of millions of dollars. Other firms that have concluded contracts after the release of the resolution, are forced to leave the Russian market.

Business move

Undoubtedly, the new state of affairs did not suit the Turkish construction companies in Russia, the list created negative prospects for most of them. The million-dollar income received from the Russian market is dominant for most of them. Therefore, some Turkish construction companies in Russia, which despite the sanctions want to continue working, resorted to legal tricks. They began re-registration of business on Russian citizens, legal entities that are not related to Turkey. Thus, they automatically continue to have legitimate activities on the Russian construction market.

Investment projects

Sanctions on Turkish construction companies in Russia have a reversal, a negative side for the state itself. Prior to the entry into force of the resolution, major investment projects were approved , the interruption of which today can cause losses, primarily to the Russian state budget and companies. Such projects include the construction of the Akkuyu nuclear power plant and the gas pipeline, known as the Turkish Stream. And if there was no hope for the gas pipeline, then the cancellation of the Akkuyu construction project, in the long term with a multi-billion profit, was a significant loss for Rosatom.

Forecasts

If Turkish construction companies in Russia completely leave the market, this will not create an economic catastrophe. And although 70% of the housing facilities in Moscow today belong to Turkish companies, and the state budget itself receives a considerable income, within two to three years the market adapts, and the loss of developers will be replenished. The strategic policy of gradual ousting of Turkish companies also contributes to positive prospects.