Fly into Istanbul and you’re immediately confronted with the Turkey that Prime Minister Tayyip Erdogan built: an endless series of huge, featureless housing constructions, often slammed down right next to one another. They’re all products of a mammoth, notoriously opaque construction enterprise called TOKI that has physically overhauled much of the country—and reports directly to Erdogan.
Erdogan’s general involvement in major construction projects is under increasing scrutiny as Turkey has been shaken by massive anti-government protests in recent weeks, largely inspired by the prime minister’s plans to build a shopping center on a much-loved green space in central Istanbul.
TOKI (the Turkish acronym for Mass Housing Development Administration) has existed since 1984, but the state-run social-housing enterprise roared to life when Erdogan’s AKP government came into power in 2002. Before Erdogan, there were 43,000 TOKI buildings. Now there are almost half a million across Turkey. TOKI operates in 81 cities and 800 towns and has more than 2,000 construction sites. The total amount of land it owned, sold and developed last year was valued at more than $7 billion. But despite its scope, the inner workings of TOKI remain unknown.
The Secretary of the Chamber of Urban Planners in Istanbul, Akif Burak Atlar, confirmed to Vocativ that TOKI has the authority to change the status of lands from natural preservation areas where no buildings are allowed to zones in which construction can proceed. And a notice published in the government’s official gazette in June announced that the prime minister has the exclusive and personal right to authorize the sale, rent, transfer and allocation of all real estate belonging to state-owned companies.
Such extraordinary powers raise the question of whether the lack of proper checks and balances paves the way for large-scale political and financial favors.
Aykut Erdogdu, a Turkish member of parliament for the opposition, prepared an extensive report on TOKI last year. He told Vocativ that TOKI has sucked in some $50 billion in state funds. “The court of auditors audits TOKI, but the real problem is the independence of the inspectors,” he says.
Erdogdu says the bidding process is shrouded in mystery and based on invitations to individual companies rather than open bids. He raised the question of whether those companies might be well-connected to the AKP. As for the mainstream media, Erdogdu says it steers clear of stories that upset the government and gives TOKI little coverage.
In a sequence of events glossed over by most of the Turkish press last year, former TOKI President and current Environment and Urban Planning Minister Erdogan Bayraktar acknowledged at least 55 million lira (about $30 million) in extortion related to TOKI. “There is theft and roguery here,” he said. “Whoever is found guilty should be punished, even me.” Bayraktar later told journalists he had been scolded by Erdogan for his candid comments.
TOKI did not respond to a request for comment. The enterprise was originally intended to help underprivileged people get housing, and it still operates projects including schools, hospitals, gyms, mosques, libraries and trade centers. But now it also builds luxury condos in exclusive areas.
In a conversation with Vocativ, one bureaucrat who works with TOKI and requested anonymity mentioned the possibility that valuable lands might have been sold for much less than they were worth to allow business partners to double or triple their profits.
But the business is so big and the suspicion surrounding it so strong that the silence cannot go on forever. Some bankers and diplomats suggest that the sheer scale of TOKI—and the inevitable boom-bust cycle in the housing and construction markets—will bring the whole situation to an ugly end.
However, as a public agency, TOKI cannot go bankrupt. So for now it will continue looming over Turkey, like the very towers it builds.
The post Prime Minister Erdogan has Turkey real estate on lockdown appeared first on Vocativ.