The ever-growing competitive power of the Turkish consultants and technical consultancy firms make a significant contribution to the payment balance of the sector through employment and economic development. It increases the significance of the construction sector in terms of the global economic growth trends, projections for the world population and urbanisation rate, and a sustainable future.
Achieving considerable growth figures and reputation since the year 1972 in which it expanded overseas, the Turkish contracting and technical consultancy sector has been continuously increasing its business volume since 2003. Our overseas contracting sector has undertaken projects worth USD 430 billion in approximately 128 countries so far. The sector increases its competitive power through the utilization of our country’s qualified labour force, technical knowledge and adaptation to technology, business experience and discipline, geographical location, political and cultural intimacy with the countries in the region, and thanks to its coordination and collaboration it has with public organisations and private sector.
In this respect, when we evaluate our overseas contracting sector, we see that an amount of USD 19.4 billion was achieved despite the political and economic fluctuations around the world and the low price of petrol. In 2020, projects worth USD 15.2 billion in total were undertaken. And when we look at the average project cost, we see that these figures have regressed from USD 83 million in 2015 to USD 36 million in 2019. The average project cost was USD 66 million against the total project cost worth USD 6.5 billion in the first half of 2021.
Turkish contractors have successfully carried out great projects in the Middle East and Africa, and especially in the Commonwealth of Independent States. Looking at the regional dispersion of the projects undertaken so far, it is seen that CIS had a rate of 45.7% (USD 195.6 billion), Middle East had 25.4% (USD 108.8 billion), Africa had 17.8% (USD 76 billion – Sub-Saharan Africa with 5% and North Africa with 12.8%), Europe had 7.2%, America had 1% (USD 3.9 billion), and the APAC Region had 3% (USD 12.8 billion).
In 2020, the first three places are taken by the Russian Federation with USD 4.5 billion, Algeria with USD 900 million, and Kuwait with USD 840 million respectively. In the dispersion by countries of the overseas projects undertaken by our contracting firms since 1972 until today, Russian Federation has the leading position with 19.7 per cent. According to this dispersion, Russia is followed by Turkmenistan, the 4 of the countries in the top 10 are CIS countries, and the remaining 6 countries are the Middle East and North Africa countries. This data demonstrates that Turkish Contractors have a great reputation in the neighbouring and peripheral countries with which they conduct business. However, that the countries such as Turkmenistan, Libya, Iraq, Saudi Arabia, which are among the top countries in the total volume, are not seen in the projects undertaken in 2020 indicates that the target countries have changes in this regard. The inclusion of more European countries among the countries from which the most projects are undertaken in 2019 and 2020 is important in terms of efforts for increasing the market diversity.
Looking at the top 5 in the dispersion of the sectors in which the most projects have been undertaken since 1972 until today, it is seen that the first place is taken by the housing and residential projects with a rate of 13.7 per cent, followed by highways/tunnels/bridges, commercial centres, power plants, and airports respectively. And in the dispersion of the sectors in which the most projects are undertaken in 2020, the housing projects are at the top with a rate of 19 per cent, followed by highways/ tunnels/bridges, power plants, petrochemistry plants, and airports respectively. This indicates that our firms have turned to the value-added sectors in 2020. Yet, the proportion of the projects that offer value-added and qualified engineering services such as power plants, industrial plants, petrochemical plants, and airport and experience for the business still have not reached the desired level. The positive separation of the firms that are specialized in the technological equipment and industrial installation of the machines, steel construction manufacturing and mounting works, the electrical and electronic installations of the industrial plants, instrumentation and automation, heating, ventilation, air conditioning (HVAC) installation, design, manufacture, and installation of the natural gas distribution systems of the industrial plants, x-ray test and evaluation, and turn-key contractual work aimed at petrochemistry & refinery, iron & steel, energy and chemistry sectors in the next period.
The development should reach the desired level not only in terms of quantity but also quality. The increase in the average project cost in the recent 17-year period results from our contractors’ undertaking of the projects that are large-scaled and have more added value, such as airport, metro, industrial plants, natural gas-petrol refineries, highways, and power plants.
Our technical consultancy sector has cumulatively undertaken nearly 2,200 projects worth USD 2.6 billion in 124 different countries so far. Like the contracting sector, our country’s technical consultancy sector has also demonstrated a significant performance in 2020 despite all the negative developments around the world and the destructive impact of the COVID-19 pandemic and has achieved a size of USD 140 million. The sector is expected to reach a size of USD 150 million in 2021.
Thanks to the project diversity and opportunities in many fields in our country such as energy, transportation, water, environment, building, etc., the knowledge of our firms in terms of master plans, feasibility, design, preparation of tender documentation, tender process, building supervision, and commissioning services, etc. increase day by day. In addition, this knowledge creates different fields of experience together with the Build-Operate-Transfer and Public-Private partnership models. The experience, work completions, and references we had from the large-scale projects in our country mostly offer substantial advantages to us in terms of technical competence for competing with the European and American engineering/consultancy firms in the tenders abroad.
The fact that the sector did not fall behind in the digital transformation for preserving its competitive power, Engineering 4.0, and further studies are considered as one of the most significant advantages it has against China, which is the prominent competitor of the sector abroad.