Dear All,

It is with much pleasure that I can report to you that 2006 was the best year in the history of TAV Construction. Despite the economic and political fluctuations in both national and international arenas, our Company continued to pursue our venture with a vision with very strong results. Therefore, I am not only hopeful and positive as we face the future, but also excited about what lies ahead.

In 2006, in spite of high commodity and oil prices, rising interest rates and increasing volatility in the financial markets, the world economy grew stronger than in the previous year, increasing by 5%. With the economies of developed countries leading the way, emerging markets, especially China and India, also showed positive signs. With growth rates of 10% and 8% respectively, China and India emerged as the driving force of the global economic boost. Following close on their heels, the economies of other developing countries experienced a good year because of demand and teh flow of capital from major economies.

However, while the growth rate of the Euro Zone has stabilized is likely to be sustained this coming year, a slowdown has already begun in the United States and Japan. Nonetheless, it is anticipated that the world economy will continue to grow in 2007, although perhaps at a slightly lower rate than in 2006.

As per the case in recent years, the major threats to global fiscal growth come from political instability, fanatical terrorism and the threats of war and nuclear proliferation, always an unfortunate reality in today’s polarizing world. Turkey, in particular, is in a vulnerable position in this regard. However, our country also stands to play a key role in the resolution of the problems that accompany these issues. Our nation’s strategic location and specific cultural and socio-economic make-up uniquely posture us to effect positive changes in the world, an occurrence which greatly strengthen Turkey’s role in the world today.

On the home front, the strong economic indicators of recent years carries over into the early part of 2006. A growth rate of 7% saw an influx of foreign capital stream into the country. The fluctuations in the markets in May and June created a slowdown, but the overall economic growth rate still exceeded 5% by the end of the year. The government’s sound fiscal policies of recent years appeared to have a positive overall stabilizing impact. These factors notwithstanding, issues such as rising inflation and interest rates, coupled with the widening trade deficit and the flagging unemployment problem, create questions about what lies on the horizon.

Adding to the looming question mark is the doubt created by the partial suspension of accession talks for Turkey’s long-awaited membership in the European Union, plus the fact that this is a major election year for Turkey. Despite these ominous clouds, there was still much to be thankful for in 2006. An influx of US$ 20 bilion in foreign capital last year, as well as the fact that all these seemingly negative indicators rarely served to derail the Turkish economy as in previous years, says a lot about the stability Turkey has gained in recent years and bodes well for the future.

Looking forward, especially to the nation’s important rendezvous with the ballot box, it is imperative that Turkey relentlessly seek to maintain political and economic stability and continue to create the kind of ambience that encourages foreign investment. Moreover, it is also vital that some kind of consensus be achieved this year in the political arena and that divisive issues are laid aside. Furthermore, reforms and strict fiscal policies must be adhered to and fully implemented and privatization efforts must continue.

As for TAV Construction, as a Company we took giant steps forward in 2006. We worked  tirelessly to complete and deliver tne construction of new airports in Ankara and Izmir, as well as the renovation of the domestic terminal at Istanbul’s Atatürk Airport. We also finished work on the Al Sharaf Shopping Mall and Tohid Iranian School projects in Dubai. Also in 2006, the TAV Doha office was established to complement our TAV Gulf and TAV Cairo branches. In addition to these, TAV Tunisia Branch was established fır the construction of New Enfidha International Airport in 2007. Besides all this, work continued at a rapid pace on all our ongoing projects, bringing them nearer to completion.

Financially, 2006 exceeded all our expectations. The value of new projects in Turkey grew up substantially over the 2005 figure. Overseas ventures increased almost fourfold.

Our Tendering and Proposals Departmant continues to bid successfully for one project after another. Currently, 43.81% of TAV’s initial bid amounts were successful and the proposals awarded totaled US$ 5.2 billion, of which US$ 3.2 billion represents TAV Construction’s share in these contracts.

The story of what is happening in and through TAV Construction is a fascinating one, as the pages of this publication bear witness. Now in 2007 we are proud to be celebrating our 10th anniversary. Our successes this past decade have exceeded our highest hopes and farthest dreams and have instilled in our leadership team the desire and will to scale even higher heights in the bright future that lies ahead.

Finally, I would like to thank the wonderful people who make up the TAV Construction family. The entrepreneurial initiative, creativity and action of each of our employees has shape our achievement-oriented culture and led to one success after another, ensuring client satisfaction. And a special thank you to each of our business partners, customers and shareholders for your trust and support as we take this wondrous journey together.

Dr. Eng. Mustafa Sani Şener
Board Member and CEO
TAV Construction