Turkey increases construction investments in neighboring countries and its periphery. It seems that Turkish contractors will increase their competitive strength in the upcoming period. A total of 38 firms from the Turkish Construction sector were included in the list published by Engineering News Record, a reputable publication of the sector, ranking 250 contractors performing jobs in countries outside their own. In this list, which includes the largest contracting firms in the world, Turkey is the country after China with the highest number of construction firms. Comments made by Nihat Zeybekci, Minister of Economy, in January 2014 indicated that the trend of success achieved by the Turkish Contractors continued to increase in 2013 and that the total of the annual international new jobs exceeded the USD 30 billion mark for the first time in 2013 to reach USD 31.3 billion. According to the Ministry of Economy, the number of countries in which the Turkish Contractors were active in the 1972-2013 period reached 103, the total number of projects undertaken was 7,371 and the total value of these projects is USD 274.1 billion. In the 2000s, the international competitive strength of the Turkish Contractors increased exponentially. The ten-fold increase in the number of new jobs, the three-fold increase in the average project size, acceleration in the market and project diversification, a shift to the investments and real estate developments from contracting jobs in traditional markets, increase in the participation in the international consortiums, gravitation toward worldwide brand formation in some specific business fields, including airports and railway transportation, are some of the developments that are specific to this period. According to Mithat Yenigün, President of the Turkish Contractors’ Association, the diversification achieved in the markets and projects of the Turkish Contractors as well as the increase of more than ten-fold in the annual international business volume in 2000s, led to a significant increase in the competitive strength of our contractors. At this rate, it seems some Turkish Contractors that have been focused on becoming worldwide brand names in some specific fields will be able to increase their influence across the world thanks to their intensive business experience in the long run. EFFECTIVE REGIONS: NORTH AFRICA, MIDDLE EAST AND GULF REGION According to Mithat Yenigün, President of the Turkish Contractors’ Association, the importance of especially the newly established embassies in Sub-Saharan Africa, one of the new markets, the flights to Africa offered by THY, the means of credit and insurance offered by Turkish Eximbank to the firms operating in these countries as well as the aid provided by the government in international contractor services cannot be denied. Ümit Kazak, TAV İnşaat General Manager, who commented on the projects they realized in the regions that the Turkish Contractors are active, stated the following; “We have completed the Airport Passenger Terminal projects in Georgia – Tiflis and Batumi, in Tunisia – Enfidha and Hammamet, in Macedonia – Skopje and Ohrid and in Egypt – Cairo and additionally the Hamad Airport Passenger Terminal Complex that is one of the largest building in Doha, Qatar”. He added that the work on Medina, Riyadh airport, Jeddah Airport Aircraft Maintenance Hangars and Oman, Muscat airport infrastructure construction is still in progress. THE POLITICAL DEVELOPMENTS IN THE MIDDLE EAST REGION AFFECTS THE SECTOR NEGATIVELY The political developments taking place in North Africa, Middle East and Gulf Region are among the main challenges that the Turkish Contractors face in conducting their projects abroad. In particular, in the large scale infrastructure projects, due to the fact that the employers are usually the state authorities, such developments may from time to time result in halts in the project. Kazak stated that they had a similar experience in Libya as the Tripoli Airport Project that is in construction phase, has been interrupted due to the political developments in the region. Kazak stated that the contractors are helpless in preventing such interruptions and that efforts must be focused on preventing any negative impact through effective contract management. He added that further challenges could be faced in terms of the duration of the projects in countries where the bureaucracy is quite cumbersome. According to Kazak, the partnerships established with local firms, and inclusions of people who are familiar with local conditions in the project usually help mitigate the effects of bureaucratic procedures. On the other hand according to Yenigün, the Turkish Contractors who have the capacity to quickly decide and easily take risks are apt in minimizing their losses in the face of sudden negative developments by focusing on alternative fields when the business slows down or stagnates in the markets they mainly operate. RISKS ARE TAKEN MORE EASILY IN COMPARISON TO THE WESTERN CONTRACTORS The historical and cultural background that the Turkish Contractors share with people in the Middle East, North Africa and Turkic Republics as well as the connections established as a result of cohabitation with these people for long periods in the history become pre-dominant advantages for the contractors that do business in these regions. Kazak states that, in consideration of cultural relations based on geographic proximity, they do not act only on the basis of the contracts in the management of projects but in addition to the methods based on written contracts they also rely on the establishment of effective communication channels with the employers based on mutual trust. According to Kazak, Turkish firms, due to their flexible structure, are more receptive to risk taking in comparison to their counterparts in Western countries. This turns out to be an advantage for the Turkish Contractors in projects set to be conducted in challenging geographies. Yenigün expects an increase in the infrastructure investments and business opportunities in the countries that export oil and natural gas and to register a high rate of growth with limited downward risk. According to Yenigün, the Turkish Contractors are required to establish foreign partnerships, avoid competing with each other and work under a common partnership culture by joining forces to be able to increase their market share and reach a level that they can compete with the worldwide conglomerates. Increasing its ranking, on the basis of its share in the total income earned in the ENR list, is one of the most important targets of Turkey in the field of Contracting. According to Yenigün, the structural problem at this point is the fact that the Turkish Contractors lag behind the conglomerates of the world in terms of the scale of the jobs they undertake. This makes it difficult for the Turkish Contractors to compete in terms of know-how, efficiency, costs, quality and profitability in the large scale projects. On the other hand, the number of the large projects that they can undertake simultaneously in different parts of the world is also limited. According to Yenigün, to be able to grow further, the Turkish Contractors are required to establish foreign partnerships, avoid competing with each other in the same regions to get jobs under more favorable conditions and work under a common partnership culture by joining forces to be able to work faster and more economically.