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Prime Minister İrsen Küçük’s announcement that Saray Hotel would be leased because it was operating at a loss sparked debate. In an exclusive interview with Cem Kar, Foundations Administration Director General Mustafa Kemal Kaymakamzade said that leasing Saray Hotel could be considered privatization. Kaymakamzade also commented on Saray Hotel, Dome Hotel, Maraş, and foundation properties in the South.
C. Kar: Mr. Kaymakamzade, what do you think about leasing Saray Hotel?
M.K. Kaymakamzade: “Saray Hotel, as is well known, was the first hotel established in our country. It has operated as a business of the Foundations Administration since it opened in 1962, but it has been running at a loss continuously since 2005. The figure of 1 million cited by the Prime Minister is correct. When we include severance pay and wear and tear on the hotel, the total reaches—and even slightly exceeds—that figure. The hotel had also begun to incur losses like this in 1996, but at that time we took a joint measure with the employees. The employees gave up some of their rights, and in return the Foundations Administration intended to make certain investments. By 2005, the administrators of that period had reached an agreement with the union and readjusted those rights. Meanwhile, new hotels were built in the market, and from then on the hotel was continually in the red and never made a profit. The hotel now needs major investment. Within the vision of the Foundations Administration, it has repeatedly stepped in, particularly at times when the Turkish Cypriot people could not invest, and tried to provide assistance to the extent of its means. With the private sector stepping in, the Foundations Administration is now withdrawing.”
C. Kar: So, is this privatization? M.K. Kaymakamzade: “This can be considered privatization. But if we lease it, we will set out our conditions, as we did not with Dome Hotel, and put it out to a transparent tender, then lease it through that tender. Our aim here is to ensure that Saray Hotel provides better service. It is to ensure that, with good investment, it can provide better service to our country. These days, the private sector is making good investments and providing good services.”
C. Kar: So, how was the tender for Dome Hotel conducted? M.K. Kaymakamzade: “Under the agreement, the hotel’s stock of goods also belonged to the Foundations, but there was no investment requirement set out by the Tourism Solidarity Association. In terms of representation on the management, three members belonged to Dome Hotel and two to the Foundations; in other words, the management belonged to Tourism Solidarity. Since no capital investment was stipulated, investment in the hotel was made to the extent that it earned a profit, though I cannot say how much it earned. Moreover, Dome Hotel needs substantial investment because it is by the sea. If I had been on the management at the time, I would have provided for investment, particularly to build this peninsula, but that was never considered. Investment was provided for only to keep the hotel operating, which shows that the hotel’s interests were not protected.”
C. Kar: Have you taken any legal action on this matter? M.K. Kaymakamzade: “I filed a criminal complaint concerning Dome Hotel because the contract they made was without consideration. In other words, it was a one-sided contract made without protecting the Foundations’ interests. In my assessment, the interests of the Foundations and the state were not taken into account, and I shared my findings with the prosecutor’s office. The matter is currently on the prosecutor’s agenda.”
C. Kar: What process lies ahead for Saray Hotel and its employees in the coming days? M.K. Kaymakamzade: “Specifications are now being prepared for leasing Saray Hotel. We will submit them to the Board of Directors, and once we have their approval, the tender will proceed. We are considering leasing the hotel for twenty or thirty years because it requires major investment. The person who takes it over needs that amount of time to be able to provide services. At the same time, we will take the necessary measures to ensure that employees are not disadvantaged. We do not intend to disadvantage anyone. We will take the necessary steps to pay everyone their severance and other entitlements and allow them to continue working; these provisions will also be included in the specifications. Employees can rest assured.”
C. Kar: What is the situation with foundation properties in the South? There are rumors that some of them have been damaged. Will any legal action be taken over this?
M.K. Kaymakamzade: “We are saddened by those matters too. Since 1963, the Greek Cypriots have caused the Foundations great harm. Mosques have been damaged, and many of our foundation properties have been occupied. The loss of income to just one of our foundations for these reasons amounts to $173 million. We have many other properties like these. Such damage is still continuing today. The other day, I learned that one of our mosques in Limassol was being repaired. I went there, and what I saw shocked me. The Great Mosque had been repaired, but the mortar used in the repairs was not suitable for historic buildings. They have covered the tops of our mausoleums there with concrete and are trying to build toilets there. There is extensive damage. All the distinctive features of that historic building have been lost. At most, thirty percent of our properties remain intact. We have made the necessary preparations to take this matter to court. When the time comes, we will take it to court; unfortunately, today none of us has any chance of winning a case we bring.”
Maraş belongs to the Foundations
C. Kar: Finally, what is your outlook regarding properties in the Maraş area? M.K. Kaymakamzade: “All of Maraş belongs to the foundations; only a half-dönüm plot does not belong to the foundations. There is a foundation rule accepted by everyone in the world, but this rule was violated during the British period, and title deeds were given to everyone. We have made our preparations, and when the time comes, we will take these steps.”