Blow to Balfour Beatty as Skanska pulls out of Turkish dam project

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The Independent Online

The controversial Ilusu dam project in Turkey, in which UK contractor Balfour Beatty has a leading role, suffered a setback yesterday after Skanska of Sweden pulled out of the consortium behind the £1.25bn scheme.

The controversial Ilusu dam project in Turkey, in which UK contractor Balfour Beatty has a leading role, suffered a setback yesterday after Skanska of Sweden pulled out of the consortium behind the £1.25bn scheme.

Environmental campaigners said this was a "body blow" to the project, but a spokeswoman for Balfour Beatty, which is heading the construction consortium, played down Skanska's decision. Construction of the dam on the Tigris river would result in the forced displacement of up to 78,000 Turkish Kurds and ethnic Arabs and submerge famous archaeological sites. Earlier this year the Commons Select Committee on International Development said going ahead with the dam would breach world conventions on human rights and the environment.

Stephen Byers, Secretary of State for Trade and Industry, has withheld a decision on granting £200m in export credits for the dam while the Turks provide assurances relating to resettlement water quality and water flow and the measures to protect archaeological heritage.

Tony Juniper of Friends of the Earth said: "The withdrawal of Skanska puts the dam in great jeopardy."

Balfour Beatty confirmed Skanska had pulled out, but insisted the decision was commercial and unrelated to environmental or resettlement issues. "It is not unknown for companies to pull out of projects," a spokeswoman said.

Nine companies are involved; the other major players are Sulzer of Switzerland, ABB of Sweden and Impreglio of Italy.

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