UPDATE - Canal Istanbul project: $1B estimated to be generated

UPDATE WITH MORE COMMENTS FROM CAHIT TURHAN

By Gokhan Ergocun and Aysu Bicer

ISTANBUL/ANKARA (AA) - A mega-project to build a canal through Istanbul, Turkey, will provide safe passage to 185 ships daily, compared to 118-125 ships through Bosphorus Strait, Turkey's transport minister said on Monday.

"An estimated total of $1 billion per year will be collected from ships passing through Canal Istanbul," Cahit Turhan told Anadolu Agency.

Some 50,000 ships are expected to pass through the canal in 2035, 70,000 in 2050 and 80,000 in 2070, he said, adding that Turkey would earn $5 billion from the passage of 50,000 vessels.

An additional $250 million is expected to be generated in ports and logistic centers, Turhan added.

Turkey's goal is to create a new waterway with a capacity to be thrice that of the Bosphorus Strait, he noted.

He added that the Bosphorus was one of the most risky crossing points for maritime traffic, with increasing commercial transportation threatening the lives of people living around it.

The strait was traversed by a yearly average of 42,258 ships over the the past five years, with the number of ships sometimes exceeding 50,000, Turhan noted.

"There is a 53% increase in the amount of cargo carried by ships passing through the Bosphorus," he noted, adding that it was the amount of cargo and dangerous goods shipped through the narrow strait that was most alarming.

Dangerous cargo -- LNG, chemicals, oil and explosives -- made up 25% of shipments through the strait 10 years ago, with current levels exceeding 35%, he added.

Underlining that the Bosphorus Strait was frequently used by Istanbul residents and tourists commuting across the city via 57 piers, he said Turkey adopted measures to ensure security in the strait against larger vessels.

The planned 45-kilometer (nearly 28-mile) canal to be built west of the city center on the European side of the Istanbul province, aims to boost the city's marine through-traffic capacity.

The mega-project, which aims to prevent risks posed by vessels carrying dangerous shipments through the Bosphorus Strait, was approved by the country's Environment and Urbanization Ministry.

- Project expected to be completed in 2025-2026

Turhan said studies for the canal project began in 2008, with five alternative locations determined, adding that the route ultimately selected would be the most environmentally friendly.

He noted that if construction on Canal Istanbul begins in 2020, it would be completed in 2025-2026.

The project's cost, including substructure work, is calculated to be $15 billion, with only the canal's construction cost being $10 billion, said Turhan.

The project could be made via a build-operate-transfer-model, he added.

"There are 13 natural curves in the Bosphorus. There will be no sharp bends in Canal Istanbul, it will be safe due to lighting," he said.

He stressed that Turkey would provide tow boat service for ships using Canal Istanbul.

Citing high compensation penalties for sea accidents due to environmental damage, he argued that ships would choose to use Canal Istanbul instead of the more risky Bosphorus.

The model of the canal was tested in a laboratory against earthquakes, and measures against groundwaters were taken, he noted.

Turhan also said that a major logistic port would be built in the canal's the Black Sea end.

An area of nearly three million square meters will be rented as commercial areas and this is also expected to create $3 billion of yearly income.