public-private partnerships: lessons learnt from turkish experience
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tepav. The Economic Policy Research Foundation of Turkey. Public-Private Partnerships: Lessons learnt from Turkish experience. Sibel Guven 10 October 2011, Batumi. Framework. What do we mean, when we say PPP? Any role chambers can play? Two examples from Turkey - PowerPoint PPT PresentationTRANSCRIPT
tepavThe Economic Policy Research Foundation of Turkey
Sibel Guven
10 October 2011, Batumi
Public-Private Partnerships:Lessons learnt from Turkish experience
Framework What do we mean, when we say PPP? Any role chambers can play? Two examples from Turkey
Organized industrial estates creating conducive local business environment.• Turkish case
Border management companies to facilitate trade.• GTI example of TOBB
Turkey′s experience in PPP solutions Slide 2
Slide 3
Public-private partnerships Problem definition
Not all public-private interaction is a partnership Two essential prerequisites for PPPs:
• Joint decision-making• Risk-sharing• Financial return should be less than economic return
Why do they matter?The gray/intersection area between markets and
states• Market failures and state failures
Key for the effective functioning of both The complexities of the private sector
development process
Turkey′s experience in PPP solutions
A PPP is collaboration among government and business A collaboration, in which risks, resources
and skills are shared in projects that benefit each partner as well as the community
PPPs can effectively overcome complex public policy problems by bringing together multiple stakeholders
PPPs expand the set of resources by not only bringing together financial assets but also each partner’s skills
Slide 4Turkey′s experience in PPP solutions
PPPs strengthen the alignment of public and private value PPPs can accomplish what outsourcing cannot:
creating and sustaining public value by leveraging the combined assets The scale and sustainability of a PPP depends on the
strength of the alignment of public and private value created by the project
• Public value aims to attain a desirable collective social outcome, • Private value aims to attain or exceed privately established
benchmarks, such as returns and earnings.
Due to these differences, simply outsourcing when the government does not have the resources to perform a service becomes problematic.
Slide 5Turkey′s experience in PPP solutions
Not every project is appropriate for PPP
PPPs are appropriate under certain conditionshaving trust and credibility between partners
having a competent and committed executive body
neither of the parties are able to complete the task on their own
creativity in handling the problems where money is not the only answer
no warped priorities of partners and unsuitable assets, such as national security
A competent use of political management among partners
Slide 6Turkey′s experience in PPP solutions
Slide 7
Chambers as natural PPP catalyzers Chambers play a very key role
because of their structure both private and public features strong dialogue mechanisms integral role in private sector development
process
Two cases from TurkeyOrganized Industrial ZonesBorder Crossing Arrangements
Turkey′s experience in PPP solutions
Slide 8
Case 1: Turkey’s Organized Industrial Zone Experience Governments cannot deliver adequate services
everywhere equally and efficiently Designating certain areas as “more equal” for
improving the investment climate
250+ Organized Industrial Zones, 70 fully operational Started as a urban development tool in the 1960s, with
a loan from the World Bank
Private-public partnerships were facilitated through the local chambers Evolved over time to obtain regulatory oversight
The Law on OIZs was enacted in 2000
Turkey′s experience in PPP solutions
Slide 9
PPP model in Industrial Zones A mixed structure of the Management Body
Public involvement• through local government bodies• through chambers
Private involvement• Investors of the OIZ
Areas of joint risk sharing and decision-making Land development Utilities provision Regulatory authorities (licenses and permits)
Turkey′s experience in PPP solutions
Slide 10
Roles of actors in OIZs Public support
Land expropriation Credit for infrastructure construction Investment incentives (tax breaks for relocation)
Private contribution Partially or wholly financing construction and land
development Utilities provision Management Investment promotion Maintenance Regulatory support to investors
Turkey′s experience in PPP solutions
Slide 11
Performance of OIZs in Turkey
0
5
10
15
20
25
Other OIZs Other OIZs Other OIZs
Telephone connection Electricity connection Water connection
Time for Getting the Permit and the License (days): inside and outside the OIZs
Infrastructure Setup Time (days): enterprises inside and outside the OIZs
Kaynak: TEPAV – World Bank Investment Climate Survey 2005
020406080
100120
Others OIZs Others OIZs Others OIZs
Construction Permits andLicenses
Operation Licenses Health permits
Turkey′s experience in PPP solutions
OIZs surely play a role in the diversification performance of the Turkish Industry
1 1 12 2 2 2 2 2
3
56
10
14 14 14
17
0
2
4
6
8
10
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14
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18
Bahra
in
Jord
an
Oman
Bulgar
iaIra
n
Mor
occo
Saudi
Arabia
Tunisi
a
Ukrain
e
Greec
e
Sloven
ia
Roman
iaIsr
ael
Turke
y
Hunga
ry
Russia
Czech
Rep
.
2000 2005
Turkey′s experience in PPP solutionsSlide 12
65 % of MENA regions Industrial exports are fromTurkey..
)
Number of export items with a volume over 1 billion USD
(SITCrev2 classification in 2 digits)
Slide 13
Case 2: TOBB has launched the modernization projects of border gates in Turkey TOBB / GTI has modernized customs gates with a
private-public partnership model Easing bottlenecks at the gates First project completed in 2003 Now 8 gates: İpsala, Habur, Cilvegözü, Kapıkule, Sarp,
Dereköy, Hamzabeyli, Nusaybin Build-Operate-Transfer model
No burden on public budget Effective daily management Transfer of a modern facility to government after the
concessionperiod
Goal is to improve trade facilitation through a PPP scheme
Turkey′s experience in PPP solutions
What do we mean by trade facilitation? Enhancing border management facilities
Effective customs administration ICT usage Logistics Institutional capacity building
border crossing timesReducing inland clearance
physical inspection
Upgrading and adjusting transport infrastructure interoperability of transport systems Multi-modal systems
Private sector capacity enhancing
Turkey′s experience in PPP solutionsSlide 14
Slide 18
TOBB-GTI border gate modernizations
Cilvegözü to Syria
Turkey′s experience in PPP solutions
TOBB-GTI: private management is accomplished, next step is to facilitate the public part What is in the new gate model?
Effective daily management User-friendly architecture Facilitation of customs formalities A high level of ICT use
Next step: facilitate the public part Multiple public agency involvement Feedback-based approach (surveys of private logistics
companies) Shorten the time & reduce cost in each step, starting from
the longest Target: full integration of all public agencies involved
Ultimate target: Fully integrated border management
Slide 19
Private sector control
Public control
Turkey′s experience in PPP solutions
Next Step: Fully Integrated Joint Border Gate Management One-window for controls of both countries
First pilot: Tel Zivan border crossing between Turkey & Syria
Bolstering strategic partnership framework Increased trade volume between two countries
Improvement in the logistics sector
60-70 % decrease in the border waiting time - Threefold the capacity
Investment and operational costs will get significantly lower
A concrete example for the revitalization of the Modern Silk Road in the big picture
Slide 20
Turkey′s experience in PPP solutions
Takeaways from a PPP framework PPPs are key to private sector development
Chambers have an essential role to play for creating conducive business environments
It is not only national Easing bottlenecks have cross-border spillovers
It is not only public sector Critical role of private sector in design and financing
It is not only demand-driven Projects to create access to new markets
It is not only economic Transport issues as a vehicle to bring conflicting parties
together
Slide 21
Turkey′s experience in PPP solutions