TURKISH EXPERIENCE
IN
PUBLIC-PRIVATE PARTNERSHIPS
1
Outline

Background of PPP Projects in Turkey

Sectoral Distribution of PPP Projects

Legal Framework in PPP

Demands by the Public Institutions Regarding the
PPP Applications

Fundamental Problems of PPP Applications in
Turkey

Requirements for Succesfull PPP Projects

Draft PPP Law
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Need for Public-Private
Partnerships

The need for additional finance under the ongoing
economic program

Faster implementation of the projects

Reduced operation and construction costs

Transfer of managerial skills of the private sector to
the infrastructure management and public service
provision

Enhanced public management system
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Critics Regarding Public-Private
Partnerships

Costly, Complicated and Time Consuming Tender
Process
–
–

An Incentive for More Costly Projects
–
–

Higher cost of capital for the private sector
Incentive to increase the costs in the “cost+profit” method
Excessive Sensitivity to Political and Economic Stability
–
–

Many stakeholders and many negotiations over many documents
Costly tender processes
Sensitivity of Foreign Direct Investment to political and economic
stability
Higher country risks in developing countries
Long Term Projects
–
–
Long Pay Back Periods
Detailed Forecasts
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Background of PPP Projects in
Turkey
Concessions During The Empire of Ottoman
Public Service Concessions
Electricity, Gas, Tunnel, Port,
Pier,
Lighthouse,
Tram,
Telephone, Post, Telegraph
Concessions in Manufacturing
Food, Paper, Chemistry, Textile
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Sectoral Distribution of PPP Projects
Transportation
1.
Air Transportation
Antalya Airport I. and II. International Passenger Terminal
(BOT)
Atatürk Airport International Passenger Terminal (BOT)
2.
Road Transportation
Göcek Tunnel (BOT)
Motorway Service Facilities (BOT)
3.
Maritime Transportation
Çanakkale Kepez Port Superstructure Facilities (BOT)
Güllük Pier (BOT)
Trabzon Port (TOR)
4.
Rail Transportation
Antalya-Alanya Railway Project (BOT)
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(no proposal was received in the tender)
Sectoral Distribution of PPP Projects
Energy
Bursa Natural Gas Power Plant (BO)
Ankara Natural Gas Power Plant (BO)
Unimar Natural Gas Power Plant–Trakya (BOT)
Tourism
Turgut Reis Marina (BOT)
Customs
İpsala Border Gate (BOT)
Drinking Water
Yuvacık Dam (BOT)
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Legal Framework in PPP

Build-Operate-Transfer Legislation

Build-Operate Legislation

Build-Lease-Transfer Legislation

Transfer of Operation Rights and Long Term Leases
Legislation

Other Legislation Related to PPP Models
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Legal Framework in PPP
Build-Operate-Transfer Laws
 The Law on the Build-Operate-Transfer No. 3996
(Official Gazette: 13 June 1994, no 21959)

The Law on Turkish Electricity Authority for
Generation, Transmission, Distribution and Trade of
Electricity No. 3096 (Official Gazette: 19 December
1984, no 18610)

The Law on Construction, Maintenance and
Operation of Motorways. No. 3465 (Official Gazette:
2 June 1988, no 19830)
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Legal Framework in PPP
Build-Operate Laws
The Law on the Establishment and Operation of Electricity Production Plants and
Energy Sales No. 4283 (Official Gazette: 19 July 1997, no 23054)
Build-Lease-Transfer Laws
The Law on Build-Lease-Transfer in health sector No. 5396 (Official Gazette: 15
July 2005, no 25876)
Transfer of Operation Rights Law
The Law on Privatization No. 4046 (Official Gazette: 27 November 1994, no
22124)
Law No. 5335 (transfer of operation rights of airports and passenger terminals by
State Airports Authority) (Official Gazette: 27 April 2005, no 25798)
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Legal Framework in PPP
Other Legislation Related to PPP Models
•
Public Procurement Law No. 4734 and Public Procurement Contracts Law
No. 4735
•
State Tender Law No.2886
•
Law on Protection of Competition No. 4054
•
Law on Municipalities No. 5272
•
Law on Council of State No. 2575
•
Financial Management and Control Law No. 5018
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Demands by the Public Institutions
Regarding the PPP Applications
General Directorate of State Airports Authority
•Rehabilitate-Operate-Transfer, Long Term Leases
Ministry of Health
•Design-Build-Finance-Operate-Transfer, RehabilitateOperate-Transfer
•Establishing an administrative structure for the PPP
Projects
•A new comprehensive and flexible legal framework
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Demands by the Public Institutions
Regarding the Applications
General Directorate of State Railways
•A new legislation for new PPP models
DLHİ
•Complete(finish)-Operate-Transfer, Lease-Operate-Transfer
•Project prioritization in accordance with the development plans and sectoral
master plans
•Effective coordination among related public bodies responsible and authorised
with the implementation of the PPP projects
Municipalities
Technical Assistant in the procurement and contracting phases
State Highway and State Hydrolic DGs
New Model for Shadow Rate
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Fundamental Problems of the PPP
Applications in Turkey
1. Limited Number of PPP Models in the Laws
• Limited scope of the existing PPP legislation
(legislation limited to BOT, BO, TOR and BLT
models)
2. Lack of Harmonisation among PPP Laws
• Several sector specific and model specific PPP
laws
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Fundamental Problems of the PPP
Applications in Turkey
3. Lack of Central Administrative Structure
for the PPP Projects
•
Assignment of different public bodies for
the implementation of PPP Projects
•
Lack of coordination among the related
public bodies
•
Lack of a central public body responsible
for setting PPP policies and coordination
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Requirements for Succesfull
PPP Projects
•
•
•
A Comprehensive Legal Framework
A Central Public Body
Improving the Institutional Capacity of the
Related Public Bodies
•
•
•
•
Detailed Economic and Financial Feasibilities
Proper Project Selection
Effective Risk Management
Competetive and Transparent Tender Process
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Suggestions for the
Ongoing Problems
Enacting a new comprehensive PPP law in order to
extend the scope in terms of the applicable PPP
models and sectors
Establishing a central public body responsible for
coordinating the PPP process, policy setting and
improving the institutional capacity of the
implementing organizations
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Draft PPP Law
A Draft PPP Law is Prepared by SPO
•A frame law arranging a great variety of PPP models
•A new and rational approach in project selection
based on feasibility studies
•A new central governmental body responsible for
PPP projects
•A New Purocurement Law Compatible with EU
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Lagislation (Draft Law Prapared by PPA)
Thanks for Your Attention
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