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Wednesday, 27 February, 2002, 16:20 GMT
Swiss bank quits Turkish dam project
Ilisu dam site
Environmentalists oppose the controversial dam scheme
Switzerland's largest bank, UBS, has pulled out of a troubled dam project in Turkey, saying it was concerned about its social and environmental impact.

A view of the ancient city of Hasankeyf
Critics say the project would destroy culturally valuable sites
Environmental groups have strongly criticised the Ilisu dam project in the south-east of the country, arguing that the scheme would displace tens of thousands of people and flood historic towns.

Its future had already been thrown into doubt after the main contractors in the $1.5bn project - British consortium firm Balfour Beatty and Impregilo of Italy - withdrew in November for similar reasons.

Now, UBS has ended its financial backing for the controversial project.

"The decisive factor behind this termination is that the general progress of the project has been unsatisfactory in recent years," UBS said in a statement.

"Until now there has been no definitive decision on what accompanying measures are to be taken to minimise the social and environmental impact of the project," it said.


The Ilisu dam is part of an enormous regeneration scheme known as the Gap project.

Turkey plans it to be the second largest of 22 dams for generating electricity and irrigation in an area hit by poverty.

But ever since the dam was proposed, critics have argued that it would flood 300,000 sq km of land, including the sites of ancient Ottoman and Byzantine towns and villages.

They also say that more than 30,000 local people, mostly ethnic Kurds, would be displaced.

Neighbouring Syria and lraq have also objected to what they say is a potential reduction of the water flow in the River Tigris.

The news seems to have come as a surprise to Turkey's Energy Ministry.

The ministry told the BBC it was preparing a statement, but said the contractors building the dam were responsible for it and they would have to deal with the withdrawal of UBS.

See also:

13 Nov 01 | Business
Balfour abandons Turkish dam project
01 Aug 00 | From Our Own Correspondent
Time running out for cultural treasure
10 Jul 00 | Europe
Refuge for Turkey's dam victims
22 Jan 00 | Europe
Turkish dam controversy
03 Jul 01 | UK Politics
Hewitt consults on controversial dam
14 Nov 01 | Sci/Tech
No dam, but plenty of energy
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