Poor gradings from international credit rating agencies such as Moody’s and Fitch have relegated the Turkish economy to the underdeveloped league as Ankara grapples with long-running economic woes, exacerbated by the COVID-19 pandemic. The government attempted to warm the economy in June and July, but the risky policy quickly backfired. The fresh nosedive of the Turkish lira, coupled with unruly inflation and a high, ossifying unemployment rate, has raised the specter of a lengthy stagnation. Remarkably, however, bankruptcies among big companies have yet to be seen as those sinking are somehow kept afloat, very much like the “living dead.”

Many of those “zombie” companies, which would have normally gone bust, are continuing to exist thanks to President Recep Tayyip Erdogan’s government. Among them are construction heavyweights known to be close to the president and have thrived under his rule.

According to World Bank data, Turkish companies such as Limak, Cengiz, Kalyon, Mapa and Kolin top the global list of contractors with the most public-private partnership (PPP) projects in the 1990-2019 period. In no other country have PPP projects been concentrated in the hands of such a small coterie of companies. 

Their heyday, however, is gone; the companies have been battered by the economic turmoil that hit Turkey in 2018 and that deepened further with the pandemic. Saddled with the debt of foreign loans they lavishly used, the companies have come to the brink of collapse. The most ambitious of their so-called “megaprojects” — Istanbul’s new giant airport — has seen a 83% decline in passenger traffic only a year after its inauguration. The government, however, is trying to keep them afloat by awarding them fresh tenders.