Union, principally financed by the EU
A joint initiative of the OECD and the European
PUBLIC-PRIVATE PARTNERSHIP
TURKISH EXPERIENCE
Mehmet UZUNKAYA
Planning Expert
Undersecretariat of SPO
« Concessions and Public-Private Partnerships »
Ankara, 10-11 March 2008
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
OTTOMAN PERIOD
Public
service concessions
Railroad, Post, Telegram,
Telephone, Lighthouse, Port, Pier,
Tram, Tunnel, Electricity, Gas,
Water, etc.
Manufacturing Industry Concessions
Food, Weaving, Quarry-terrain, Metal
Objects, Paper, Chemistry, Rubber.
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
RECENT HISTORY
Turkey
is one of the first countries to
apply PPPs since 1980s.
One of the leading laws in this area is
the Law 3096 on the Assignment of
Institutions other than Turkish Electricity
Administration for Electricity Production,
Transmission, Distribution and Trade”
dated 1984.
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
METHODS COVERED BY THR CURRENT LEGISLATIVE
INFRASTRUCTURE





Build – Operate - Transfer (Laws no:
3996, 3465, 3096)
Build - Operate (Law no: 4283)
Build - Rent - Transfer (Law no: 5396)
Transfer of operation rights (Law no:
4046, 5335, 3465, 3096)
Long term leasing (Law no: 5335, 4046)
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
LAWS AND REGULATIONS
BUILD – OPERATE - TRANSFER LEGISLATION

Decision no. 94/5907 on the Law 3996 on Performance of
Certain Investments and Services within the framework of
Build-Operate-Transfer

4 Regulations related to Law 3096 on Assignment of
Institutions other than Turkish Electricity Administration for
Electricity Production, Transmission, Distribution and Trade

Law no. 3465 on Assignment of Institutions other than General
Directorate of State Highways for Highway (with tolls)
Construction, Maintenance and Operation and Regulation no.
93/4186 regarding this Law
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
LAWS AND REGULATIONS
BUILD – OPERATE LEGISLATION
Law no. 4283 on Establishment of Electricity Production
Facilities with Build-Operate Model and their Operation and
Regulation of Electricity Sales and Regulation no. 97/9853
regarding this Law
BUILD – RENT – TRANSFER LEGISLATION
Law on the Addition of an Article to the Health Services Law no.
5396 and Regulation no. 2006/10655 regarding this Law
LEGISLATION ON TRANSFER OF OPERATION RIGHTS AND
LONG TERM LEASING
Privatisation Law no. 4046
Law no. 5335
(Law authorising the State Airports Authority to totally or partially
transfer its airports to the private sector through long term leasing
or transfer of operation rights methods)
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
SECTORS COVERED BY THE CURRENT LEGISLATIVE
INFRASTRUCTURE
ENERGY
Electricity generation,
transmission, distribution and
trade
Dams
TRANSPORTATION
Highways, bridges, tunnels,
carparks, highway operation
facilities
Railroads
Ports and airports for civil use
AGRICULTURE
Irrigation
DRINKING WATER, SEWAGE
Drinking water
Water treatment facility
Sewage system
HEALTH
Hospitals
TOURISM
Marinas
GENERAL ADMINISTRATION
Customs
MINING
Mines and operation facilities
ENVIRONMENT
Investments on prevention of
pollution
MANUFACTURE
Factories and similar
facilities
COMMUNICATION
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
SECTORAL PRACTICES
 ENERGY
BOT PROJECTS
 Marmara Ereğlisi-Trakya
Natural Gas
 Marmara Ereğlisi-Unimar
Natural gas
 Gebze-Dilovası Natural Gas
 Esenyurt Natural Gas
 Birecik Dam and HP
 Berdan HP
 Çal HP
 Çamlıca HP
 Aksu-Çayköy HP
 Fethiye HP
 Tohma-Medik HP
Girlevik II-Mercan HP
Gaziler HP
Gönen HP
Kısık HP
Hasanlar HP
Suçatı HP
Dinar II HP
Ahiköy I-II HP
Sütçüler HP
Bozcaada Wind Power
Çeşme-Alaçatı Wind
Power
HP: Hydroelectric Plant
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
SECTORAL PRACTICES
 ENERGY
BO Projects





Gebze Natural Gas Combined Binary Power Plant
Adapazarı Natural Gas Combined Binary Power Plant
İzmir Natural Gas Combined Binary Power Plant
Ankara Natural Gas Combined Binary Power Plant
İskenderun Geothermal Power Plant
TOR Projects
 Çayırhan Geothermal Power Plant
 Hazar I-II HP
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
SECTORAL PRACTICES
 TRANSPORTATION
AIR TRANSPORTATION










Antalya Airport International Terminals I and II (BOT)
Atatürk Airport International Terminal Building (BOT)
Dalaman Airport International Terminal Building (BOT)
İzmir Adnan Menderes Airport International Terminal Building (BOT)
Ankara Esenboğa Airport Domestic and International Terminals (BOT)
Sabiha Gökçen Airport International Terminal Building and
Supplementary buildings (BOT)
Atatürk Airport Domestic and International Terminals (long term leasing)
Antalya Airport Domestic and International Terminal Buildings (long term
leasing)
Zonguldak Çaycuma Airport (long term leasing)
Antalya Gazipaşa Airport (long term leasing)
 LAND TRANSPORTATION
 Göcek Tunnel (BOT)
 Highway Service Facilities (BOT)
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
SECTORAL PRACTICES
 TRANSPORTATION
SEA TRANSPORTATION




Çanakkale Kepez Port Superstructure Facilities (BOT)
Güllük Quay (BOT)
Bodrum Passenger Quay (BOT)
Trabzon Port (TOR)
RAIL TRANSPORTATION
 Antalya-Alanya Railroad Project (BOT)
(no tender was submitted)
 Reconstruction of the Kapıkule Border Train Station (*)
URBAN TRANSPORT

İstanbul Bosphorus Tunnel Road (BOT) (*)
(*) HPC Authorisation was received for BOT contract, HPC authorisation will be taken for implementation contracts
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
SECTORAL PRACTICES

TOURISM












Bodrum Turgut Reis Marina (BOT)
Didim Marina (BOT)
Çeşme Marina (BOT)
Sığacık Marina (BOT)
Kaş Marina (BOT)
Alanya Marina (BOT)
Mersin Marina (BOT)
Dalaman Marina and Quay (BOT)
Datça Marina (BOT)
Tekirdağ Marina (BOT) (*)
Yalova Marina (BOT) (*)
Afşa Island Marina (BOT) (*)
(*) HPC Authorisation was received for BOT contract, HPC authorisation will be taken for implementation contracts
.

DRINKING WATER
 Yuvacık Dam (BOT)
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
SECTORAL PRACTICES

GENERAL ADMINISTRATION


















Edirne İpsala Border Gate (BOT)
Iğdır Gürbulak Border Gate (BOT)
Şırnak Habur Border Gate (BOT)
Edirne Kapıkule Border Gate (BOT)
Artvin Sarp Border Gate (BOT)
Hatay Cilvegözü Border Gate (BOT) (*)
Mardin Nusaybin Border Gate (BOT) (*)
Edirne Hamzabeyli Border Gate (BOT) (*)
Pazarkule Border Gate (**)
Esendere Border Gate (**)
Türkgözü Border Gate (**)
Dilucu Border Gate (**)
Akçakale Border Gate (**)
Öncüpınar Border Gate (**)
Yayladağ Border Gate (**)
Kırklareli Dereköy Border Gate (BOT) (***)
İstanbul Halkalı Border Gate (BOT) (***)
Şırnak Ali Rıza Efendi Border Gate (BOT) (***)
(*) HPC Authorisation was received for BOT contract, HPC authorisation will be taken for implementation contracts.
(**) HPC Authorisation for BOT contract is submitted to the approval of HPC members. After this, HPC authorisation will be taken for
implementation contracts.
(***) Preparation works are going on.
© OECD
PROJECTS AT THE PREPARATION STAGE PROPOSED
BY THE DG STATE HIGHWAYS
Union, principally financed by the EU
A joint initiative of the OECD and the European
PPP in Turkey
TRANSPORTATION






(*)
Gebze-Orhangazi-İzmir Highway (Including the İzmit
Körfez passage)(377 km) (*)
Kınalı-Malkara-Çanakkale-Savaştepe Highway
(Including the Çanakkale strait –passage) (566 km)
Ankara-İzmir Highway (503 km)
(Ankara-İzmir)Ayr.-Afyon-Burdur-Antalya Highway (345
km)
(Ankara-İzmir)Ayr.-Eskişehir-Bursa Highway (202 km)
HPC Authorisation was received for BOT contract, HPC authorisation will be taken for
implementation contracts.
.
© OECD
SOME METHODS NOT COVERED BY THE CURRENT
LEGISLATION
Union, principally financed by the EU
A joint initiative of the OECD and the European
PPP in Turkey








Design – Build – Finance - Operate
Build – Own – Operate - Transfer
Rehabilitate – Operate - Transfer
Build – Own – Operate
Build – Transfer – Operate
Made additional investment - Operate
Establishing a company with the private
sector
Shadow tolls
© OECD
SOME METHODS NOT COVERED BY THE
CURRENT LEGISLATION
Union, principally financed by the EU
A joint initiative of the OECD and the European
PPP in Turkey



Justice Services
Education Services
Cultural Services
In order to set up the legal basis for the shadow toll
application, which is not covered by the existing
legislative infrastructure, a draft law on amending
Law no. 3996 was prepared by the Ministry of
Finance and was submitted to the Parliament. The
draft was approved by the Planning and Budget
Commission. It is expected to enter into force in
2008.
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
MAIN PROBLEMS
1.
Lack of Institutional Capacity and Structuring in PPP
Applications
a.
b.
c.
d.
e.
Failure to carry out preparation activities for PPPs in time and
sufficiently to help with the analyses on technical, economical
and financial feasibility of the projects, economical and social
costs, returns and risks.
Lack of interest by the public sector to PPP projects as they
are financed and operated by the private sector.
Lack of experience in the public institutions related to PPP
projects which require more complex processes than the
classic financing methods (differences of knowledge and
experience between public and private entities)
Lack of a specialised unit responsible for the analysis,
prioritisation and selection of the PPP Projects.
Lack of a sectoral standardisation related to the project
documents (feasibility studies, contracts, etc).
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
MAIN PROBLEMS
2. Unorganised structure of the
existing legislation and its narrow
scope covering few models
a. Regulation of different models by
different laws and regulations.
b. Shortage of different models: The
legislation only covers BOT, BO, TOR,
Build-Rent-Transfer and Long term
leasing methods.
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
PROPOSALS FOR SOLUTIONS
1.
Centralised Unit:
Establishment of a centralised unit which will:





1.
2.
3.
İdentify the PPP policies in Turkey,
Monitor compliance of the PPP Projects to the development
plans, programs and sectoral policies,
Be responsible for the analysis, evaluation, prioritisation,
selection and monitoring of the PPP Projects,
Be specialised in PPP area,
Prepare guidelines and standard documents for the
implementing organisations.
Drafting of a single framework law which covers
applicable models and sectors
Establishment of a national PPP strategy
Raising awareness among and providing information
to the public institutions about PPP processes
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
STEPS TAKEN FOR SOLUTION

Current Situation, Problems and Analysis of
Needs


Starting from 2005, a series of meetings was organised by
the Undersecretariat of SPO with the participation of the
relevant institutions and organisations in order to discuss
realised PPP Projects, experiences, problems and solutions
and new applicable models; and a report was prepared as a
result.
PPP Draft Framework Law


In light of the information acquired and the needs arose
during those meetings, a draft PPP framework law, which
covers all applicable models and sectors, was prepared by
the Undersecretariat of SPO and submitted to the opinion of
relevant institutions and.
The draft law has been sent to the Prime Ministry and is
expected to enter into force in 2008. Secondary legislation
regarding this law will be prepared until the end of 2009.
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
INNOVATIONS INTRODUCED BY THE DRAFT PPP LAW
1.
2.
3.
4.
5.
6.
Definition
of
the
Public
Private
Partnership concept
Unification of the PPP legislation
Definition of PPP models and bringing
flexibility to the models
Extension of the scope by adding new
sectors
Introduction of objective criteria related to
the PPP Process
Introduction of the risk concept to the
PPP Projects and definiton of the
guarantees
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
INNOVATIONS INTRODUCED BY THE DRAFT
PPP LAW
1.
Definition of the Public Private Partnership Concept
This definition helps to regulate the different concepts of
private sector participation to public services under one title,
Public Private Partnership, which is a new concept for our
country.
2.
Unification of the PPP Legislation
With the draft law, one single framework is introduced for the
unorganised legislation on PPPs. The existing legislation is
simplified and a single process valid for all applications is
developed by eliminating differences.
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
INNOVATIONS INTRODUCED BY THE DRAFT
PPP LAW
3.
Definition of PPP models
flexibility to the models
and
bringing
The current models of BOT, BO, Build-Rent and
Transfer of Operation Rights are now defined
under one law, which also brings a flexibility to
implement different types of these models.
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
INNOVATIONS INTRODUCED BY THE DRAFT PPP LAW
CURRENT LEGISLATION
DRAFT LAW
Build-Operate-Transfer
Build-Operate-Transfer
(3996, 3465, 3096)
Build-Operate
Build-Operate (4283)
Build-Rent-Transfer
(5396)
Transfer
of Operation
Rights and Long Term
Leasing (4046,
5335,3465,3096)
Works such as
completion,
Build-Rent-Transfer
renovation,develo
Transfer of Operation Rights
pment, research,
restoration,
Long term leasing
maintenance,
Design-Build-Operate-Transfer
repair, etc. are
Design-Build-Operate
within the scope
of “build”. Shadow
Rehabilitate-Operate-Transfer
tolls
Make additional investment-O-T
implementation is
Make additional investment-Operate
also covered by
the law
Settign up a company with the private sector
Make
additional investment-Rent-Transfer
Rehabilitate-Rent-Transfer
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
INNOVATIONS INTRODUCED BY THE DRAFT
PPP LAW
4.
Extension of the scope by adding new sectors
Areas such as education, culture, justice and general administrative
infrastructure, which are not covered by the existing Public Private
partnership legislation, are regulated with this draft law.
5.
Introduction of objective criteria related to the PPP Process
Feasibility study is introduced as a requirement in the selection of the
projects and decision making process is more clearly and rationally
defined.



HPC (High Planning Council) process
Obligation of a feasibility study
Risk analyses
© OECD
PPP in Turkey
Union, principally financed by the EU
A joint initiative of the OECD and the European
INNOVATIONS INTRODUCED BY THE DRAFT
PPP LAW
1.
Introduction of the risk concept to the PPP Projects and
definiton of the guarantees
It is the first time with this Law that the efficient risk sharing
concept, which is the basic element of successful PPP
projects, is mentioned. Mechanisms are developed to
monitor the financial liabilities for the public sector which
might occur as a result of the guarantees and to ensure that
these liabilities are in compliance with the the macroeconomic balances.
© OECD
Union, principally financed by the EU
A joint initiative of the OECD and the European
THANK YOU...
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