The order cements the company’s position in Istanbul’s most expensive business district when Turkey merchant Denizbank paid more than$ 350 million for the building that houses its offices in April.
The same organization was silently looking for an alternate location in another city as soon as the ink on the offer for the imposing 34-story tower dried up. The purpose was not a tectonic change in its business, but rather the possibility of geological activity beneath it.
Earthquakes are both unavoidable and uncertain, and experts believe Istanbul may be in need of one. Lenders are now moving forward with emergency planning following the devastation experienced last year in the south of the nation and the criticism that the authorities were insufficiently prepared. In order to maintain consistency in the event of a disaster, teams must be established in shadow offices in the capital city of Ankara.
As well as Denizbank, which is owned by Dubai-controlled Emirates NBD, Spanish business BBVA’s Greek product Garanti, Qatari-owned QNB Finansbank and development banks TSKB are working on back programs.
Despite a new office tower under construction on Istanbul’s Eastern area, one of many that has sprouted in recent years as the town develops its economic center, the Turkish central bank has been recalling some of its employees to Ankara from all departments. That’s so it can continue operating in the event of an earthquake, a man acquainted with the plan said. A spokesman declined to comment.
Istanbul is located northeast of the North Anatolian Fault, which runs through Turkey’s northern territory, but Ankara is located between two significant fault lines and is further away from risk zones.
About 40 % of Turkey’s business features lie in the Istanbul metropolitan area, including chemical, automotive and textile manufacturing, according to an Market and Technology Ministry statement.
The town, which has almost 16 million residents, and its neighboring counties are also a hotspot for the world supply chain. In Istanbul, the Bosphorus Strait, which divides Europe and Asia, serves as the only passageway for boats carrying oil and corn from the Black Sea nations during the Ukraine-occupied War.
According to Nurcan Meral Ozel, a professor at Istanbul’s Kandilli Observatory and Earthquake Research Institute,” It’s crucial to assess the potential loss in the event of an disaster and to immediately apply professional disaster risk management strategies at national, regional, and business levels.”
Based on a number of calculations involving traditional law, the institute predicts a 7.33 magnitude earthquake to strike at some point. The Crisis and Emergency Management Presidency, however, is preparing for a 7.5 scale collapse, only somewhat smaller than the ones that hit the south in February next year.
According to a person with knowledge of the company’s plan, Denizbank’s administration in Istanbul requested employees from all units be located in Ankara, while another stated that it plans to encourage everyone looking to travel to the funds.
The bank announced that it is developing a” smaller” version of its Istanbul headquarters. In response to questions, the bank stated that the goal is to “make sure our finance services continue unceasingly after a possible earthquake that may influence Istanbul.”
QNB Finansbank said it was even backing up its HQ groups in Ankara, while ensuring that all branches and banks houses are earthquake-resistant. Some of TSKB’s employees have been moved to a occupied office in Ankara. The lender declined to comment.
According to a person with knowledge of the plans, Garanti BBVA is moving its data centre and some of its nose offices. The bank stated in a statement that it ensures that a portion of its” manufacturers, services, and human resources are backed up outside the disaster territory.”
The precautions have served as a reminder of what is being done rather than what is, as with all disaster preparations.
Other businesses and industries need to step up their planning, according to Erdal Bahcivan, president of the Istanbul Chamber of Industry. After a thorough examination of all industrial companies in the city, he said, that includes making sure facilities are more earthquake proof.
After the events in eastern Turkey last year, Bahcivan said that about 80 % of the industrial facilities in Istanbul’s major districts were built pre-1999, before the country revised its building regulations.
A 2021 report by Turkey’s largest business group, Tusiad, found that coordination between industries was insufficient, while small and medium-sized enterprises stood out with low awareness and insurance cover.
” Given the weight of Istanbul in the national economy and the scenario analysis of a possible earthquake, it is therefore vital that we reduce the expected risk to an acceptable level”, Bahcivan, whose organization has about 25, 000 members, said in a written response to questions. ” If we do not take action, unfortunately, we will all pay the price as a country”.
The impact would, of course, be huge. Insurers estimate a$ 300 billion hit to the economy, equivalent to 27 % of gross domestic product, according to a senior person in the industry. That would be three times the estimate from last year’s disaster. About$ 25-$ 30 billion would be borne by insurance companies, according to the person, who asked not to be identified because of the sensitivity around earthquakes.
Istanbul has always been an earthquake-prone city. A powerful earthquake struck Istanbul shortly after the Ottomans took control of the city in the summer of 1509. According to records, the city was hit by the earthquake. Thousands of people are reportedly killed by collapsed buildings, according to gossip reports. About 250 years later, in 1766, another strong quake hit, collapsing the minarets of the Blue Mosque.
More recently, a devastating quake 25 years ago in the city of Izmit less than 100 kilometers ( 62 miles ) from Istanbul killed more than 17, 000 people in the region. A financial crisis in 2001, which paved the way for Recep Tayyip Erdogan’s ascendancy to power, followed.
The risks are comparable to those in other earthquake-prone regions. Japan was seemingly well prepared and yet the 2011 Tohoku quake triggered a tsunami and caused a nuclear meltdown, resulting in over 15, 000 deaths.
Los Angeles, San Francisco, and San Diego sit perilously close to the San Andreas Fault, where experts predict that a powerful quake, often referred to as” The Big One”, is not a matter of if, but when.
The urgency in Istanbul was highlighted again last year when twin quakes devastated Turkey’s southern cities, claiming more than 50, 000 lives. The government received criticism for not building housing infrastructure to withstand earthquakes, among other things.
With Erdogan’s fondness for construction, Turkey has focused its resources on developing new projects rather than renovating its aging stock.
The government is aware of the danger, according to Murat Kurum, minister of environment and urbanization. He stated last week in Istanbul that building retrofitting is the most urgent priority and that includes earthquake preparedness.
” A potential earthquake is expected in Istanbul, but we will not wait for it—we cannot wait”, he said. ” We will not turn a blind eye to this reality, as some might”.
Istanbul Mayor Ekrem Imamoglu, who beat off a challenge by Kurum in municipal elections, estimates the cost to make vulnerable buildings resilient at$ 20 billion. Turkey’s overall estimated cost of the World Bank is$ 465 billion for the reconstruction or retrofitting of 6.7 million residential units.
But it’s not just about the money. Istanbul is densely populated and packed with multi-story apartments, each owned by different individuals, making it difficult to reach agreements to renew buildings. That’s in addition to the high cost associated with a period of economic hardship and roiling inflation.
More than 500, 000 people live on unstable ground such as riverbeds. Pre-1999 constructions, many of which were built with substandard materials, face the highest risk.
Around 40, 000 buildings could suffer “heavy damage” in the next Istanbul earthquake, according to the Kandilli Institute. About 12 % of all buildings in Istanbul could see substantial casualties, it said.
Let’s face it, today it’s very difficult to say whether Turkey or Istanbul is prepared for the” Great Istanbul Earthquake” predicted by the scientific community, according to Bahcivan, the chamber of industry chief. ” If we live in this geography, we have to see this issue as the most fundamental, most important potential problem”.
