FOR the second time in the past two weeks the Turkish press has warned that Ankara will cut electricity imports from Bulgaria, Intellinews news service announced on Tuesday. Turkey will cancel its contract for purchasing electricity due to Sofia's failure to award the construction of infrastructure projects in Bulgaria to Turkish companies, Turkish news daily Zaman reported.

Under an intergovernmental agreement of 1998, Bulgaria sells electricity to Ankara in exchange for participation of Turkish companies in local infrastructure projects. Zaman cited Turkish Energy Minister Hilmi Gyuler's statement of the previous week that he would propose cancellation of the agreements with Bulgaria, since by 2006 Turkey will have no electricity shortage.

According to Zaman, Turkey buys 3.7 billion kilowatt-hours a year from Bulgaria. The major joint project - the construction of the Upper Arda hydro power project - has failed to start due to the failure of the Turkish partner, Ceylan Holding, to provide financing.

The National Electric Company (NEC) has observed its commitments; it financed the feasibility study of the hydro power project but Ceylan did not raise the capital of the joint venture, the Bulgarian Energy Ministry commented.

The timing of Zaman's article coincided with a visit to Sofia of Mahmud Ceylan, Ceylan Holding's CEO, who announced that the company will not withdraw from the project for the construction of the Gorna Arda hydro power project.

Ceylan said last Friday that his company would remain involved in the project after being on the verge of leaving it because of suffering financial difficulties in the past three years, the BGNES news agency reported.

Ceylan met Nikolai Marinov, a close aide of Prime Minister Simeon Saxe-Coburg in Sofia on Friday, Government Information Service head Tsvetelina Uzunova told the agency.

The $220 million project, including three hydroelectric power plants on the Arda River in the Rhodope Mountains region, was meant to create some 3000 jobs for Bulgarian ethnic Turks, who are plagued by poverty and unemployment.

After being inaugurated with a lavish ceremony, it has remained on the books for some four years as the previous Bulgarian government headed by Ivan Kostov refused to guarantee loans that Ceylan intended to borrow for the project. Since then Bulgaria has been seeking to replace Ceylan with another Turkish or other foreign company.

Meanwhile, in a surprising turn of events on Tuesday, Turkish Foreign Minister Abdullah Gul denied press reports that Turkey intends to decrease the amount of electricity it buys from Bulgaria.

Gul assured his Bulgarian counterpart Solomon Passi that electricity imports would even be increased. Abdullah Gul will visit Bulgaria from May 12 to 13. The date was officially confirmed during the meeting of the two countries' top diplomats in Belgrade. Passi and Gul met during a forum of the countries of the South Eastern Europe Co-operation Process. It was their first meeting after Gul's appointment as Turkey's Foreign Minister.