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Insurers quit Turkey dam project

THREE Western export credit insurers quit Turkey's planned Ilisu dam on the Tigris River yesterday because it is failing World Bank environmental and heritage standards, throwing the 2 billion euro (US$2.8 billion) project into doubt.

The dam is due to provide 3.8 billion kilowatt-hours of electricity a year and help wean Turkey off reliance on energy imports. But it will also swallow up more than 80 villages and hamlets by the time of its planned completion in 2013.

Work on the project was halted in December when the three insurers - Euler Hermes Kreditversicherung of Germany, Austria's Oesterreichische Kontrollbank and Swiss Schweizerische Exportrisikoversicherung - ordered suppliers to stop working on the dam for 180 days.

"The agreed contractual conditions regarding the environment, cultural heritage and relocation could not be fulfilled," the insurers, which were providing credit guarantees for the German, Austrian and Swiss suppliers, said in a joint statement.

Iraqi criticism

It was unclear whether Turkey would continue construction now that the European backers have withdrawn.

Turkey had said work on the dam would continue this week, sparking criticism from Iraq, which says it would worsen an already dire water shortage.

The Tigris and Euphrates rivers both rise in Turkey and flow into Iraq, the latter passing first through Syria.

Turkey began work on the dam in 2006. Environmentalists and historians say almost all the historic ruins that attract tourists to the Hasankeyf, on the Tigris, would be buried if the project goes forward.

Hasankeyf was used by the Romans as a fortress to ward off the Persians. The town was later destroyed by Mongols and rebuilt in the 11th century by Selcuk Turks.


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