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The Role of Privatization & Public Private Partnerships in Infrastructure Development

Ali Güner Tekin

Head of Department

+90-312-585 8090

a g t e k i n @ o i b . g o v . t r

July 2012

REPUBLIC OF TURKEY

PRIME MINISTRY

PRIVATIZATION ADMINISTRATION

www.oib.gov.tr

2

www.oib.gov.tr

� PA is the main responsible administration for the privatizations of the SOE’s, state entities and state shares in companies.

� PA is directly subordinated to the Prime Minister. The duties and powers are derived from the law are currently beeing exercised by the Minister of Finance.

� Besides PA, there are some special regulations for the privatization of certain SOE’s, among others Türk Telekom, National Lottery Games and Electricity Generation.

Privatization High Council

[PHC]

Decision Making

Body

Privatization Administration

[PA]Executive Body


www.oib.gov.tr

R. Tayyip ERDOĞAN

Prime Minister

Erdoğan BAYRAKTAR

Minister of Public Works and Settlement

President

Member

Ali BABACAN

Minister

& Deputy PM

Member

Mehmet ŞİMŞEK

Minister of Finance

Member

Binali YILDIRIM

Minister of Transport, Communications and

Maritime

Member

Privatization High Council

3

www.oib.gov.tr

l TAKEN INTO THE PROGRAM:

l 270 COMPANIES

l 858 REAL ESTATES / 114 PLANTS

l 8 MOTORWAY / 2 BOSPHORUS BRIDGES

l 1 STATE LOTTERY LICENCE / 1 VECHICLE INSPECTION

LICENCE

l TAKEN OUT OF THE PROGRAM:

l 25 COMPANIES / 5 REAL ESTATES

l PROCESSED:

l 199 COMPANIES

l FULLY PRIVATIZED

l 188 COMPANIES

l CURRENTLY IN PROGRAM

l 12 COMPANIES ( WITH =>50 % GVMT SHARE)

l 417 REAL ESTATES / 48 PLANTS

l 2 PORTS

l 8 MOTORWAY / 2 BOSPHORUS BRIDGES

l 1 STATE LOTTERY LICENCE

PRIVATIZATION IMPLEMENTATIONS1986 - 2012 June

www.oib.gov.tr

4

www.oib.gov.tr

__COMPANY __________ YEAR ___________ SIZE (million$)

1. TÜRK TELEKOM (70%) 2005-2008 8.461

2. TÜPRAŞ (REFINERIES) (100%) 1991-2006 5.726

3. ERDEMİR (IRON&STEEL) (51%) 1990-2006 2.928

4. HALKBANK (SME BANK) (25%) 2007 1.839

5. TEKEL (ALCOHOL-CIGARETTES) 1987-2011 2.799

6. PETKİM (PETROCHEMICALS) (100%) 1990-2008 2.538

7. POAŞ (OIL DISTRIBUTION) (100%) 1991-2002 1.707

8. TEDAŞ (ELECTRICITY DISTRIBUTION) 2005-2011 5.450

9. ÇİTOSAN (CEMENT) (100 %) 1989-2003 1.127

MAJOR PRIVATIZATIONS(1989-2011)

www.oib.gov.tr

Almost 80% of all privatization revenues were accrued between 2004-2010

29 131 486 244 423 568 412 515 292 4661,020

38

2,717

120 536 187

1,283

8,222 8,096

4,259

6,296

2,274

3,085

1,358

4,919

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

198

5–19

88

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

(US$m)

TOTAL PRIVATIZATION REVENUE REALISED BY PA :$ 43.1 billion

Alr

ead

y te

nd

ered

, wat

ing

fo

r cl

osi

ng

19 %

$8.2 billion $34.9 billion

81%

PRIVATIZATION -REVENUES-

Source: PA

5

www.oib.gov.tr

As of the end of 2010 almost 35% of the completed privatization deals have foreign capital involvement.

In Million USD

PRIVATIZATION -FOREIGN CAPITAL INVOLVEMENT-

www.oib.gov.trwww.oib.gov.tr

6

www.oib.gov.tr

11

Major Companies and Entities in the Privatization Portfolio

Percent of share belonging to Privatization Administration

Administration leads

privatization of key enterprises

in Turkey

1 License will be granted to operate the national lottery games2 PA currently leading the privatization without owning the shares3 Privatization studies undertaken under law 406SOURCE: Privatization Administration

Companies under the Administration Program

Banking Sugar industries Electricity distribution

Retail Turkish Airlines Maritime transportation

Tobacco and salt production

Copper mines Floor tiles & cement pipes

Petrochemical Sugar industries Natural gas distribution

75 100 100

100 49 100

100 100 56

10 10 80

Companies to be privatized under

special legislation

National lottery games1

Toll motorways2

Telecoms3

Electricity generation2

TCDD Ports2

32

xx

10 10 80

www.oib.gov.tr

• MOTORWAYS & BRIDGES

• ELECTRICITY DISTRIBUTION COMPANIES

• ELECTRICITY GENERATION FACILITIES

• BAŞKENTGAZ (NATURAL GAS DISTRIBUTION IN ANKARA)

• TÜRKŞEKER (SUGAR PROCESSING)

• CRUISE PORTS • SALIPAZARI• İZMİR

• CONTAINER PORTS• DERİNCE• İZMİR

• MARINAS• MERSİN- TAŞUCU• İSTANBUL- FENERBAHÇE KALAMIŞ

• TÜRK TELEKOM

• HALKBANK

• THY – TURKISH AIRLINES

• IMMOVABLES

Important Privatization Projects on the Pipeline

7

www.oib.gov.tr

World Bank: Turkey accords with the best international privatization practices

The success attained by Privatization Administration has been praised and awarded by various international organizations

� PA showed professionalism and good practices in all of

the 20 transactions

� PA’s use of financial advisors has resulted in an

open, transparent and competitive privatization

process

� PA pursued a broadly transparent process, which

was consistent with acceptable competitive

practices

� Tender processes were open, transparent and

competitive and tender pre-conditions appropriate

� World Bank, CEPDL REPORT

Turkey ranked number 5 in the top 10 list with its

total privatization implementation figure

for years 2004-2008 among OECD member

countries

www.oib.gov.tr

Ongoing Privatization Implementations

NAME METHOD BIDDING DEADLINE

VARIOUS IMMOVABLES Asset Sale various

MOTORWAYS AND BRIDGES TOR 31.10.2012

İZMİR CRUISE PORT TOR 07.09.2012

17 SMALL RUN ON RIVER POWER PLANTS TOR 05.10.2012

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www.oib.gov.tr

15

� Total lenght 2.036 km’s

� The routes to be privatized (1.975 km.)1. Edirne-Istanbul-Ankara2. Pozantı-Tarsus-Mersin3. Tarsus-Adana-Gaziantep4. Toprakkale-Iskenderun5. İzmir-Çeşme6. İzmir-Aydın7. İzmir-Ankara8. Gaziantep-Şanlıurfa9. 2 Bosphorus Bridges

Sales [2011] : $ 561 million Number of vehicles [2011] : 350 million

� To be privatized by Transfer of Operational Rights.

� Tender announced by 25.08.2011� Bidding deadline is 31.10.2012

Toll Motorways & Bridges

Timing

Privatizationmethod

Assets

www.oib.gov.tr

PRIVATIZATION OF MOTORWAYS AND BRIDGES

Motorway Network in TURKEY

9

TEKİRDAĞ

ÇEŞME

MARMARİS ANTALYA

ALANYA

DİKİLİ

TDI-TCDD PORTS PRIVATIZED BY PA

KUŞADASI

MERSIN

BANDIRMA

ISKENDERUN TDI Ports- with revenue sharing

TDI Ports without revenue sharing

TCDD- Ports

İZMİR

DERİNCE

Source: PA/AGT To be privatized

SALIPAZARIHAYDARPAŞA

www.oib.gov.tr

Cruise Ports

İstanbulport – (Galataport)

� Largest cruise port of Turkey� Total project area is c. 112,000 m2� To be privatized by TOR & BOT model� The whole region should be developed by

building a cruise terminal, a five stars hotel, shopping malls and free shops.

İzmir Cruise Port� The port is divided into two as cruise and

container ports and will be privatized separately� To be privatized by TOR for 46 years� The whole region should be developed by

building a cruise terminal, a five stars hotel, shopping malls and free shops

� Bidding deadline 07.09.2012

10

www.oib.gov.tr

Marinas

İstanbul-Kalamış Fenerbahçe Marina

� Largest marina of Turkey� To be privatized by TOR method.� Land registry studies are ongoing.

Mersin - Taşucu Marina

� 6 piers (total length 610 m2)� Total project area is c. 140,000 m2� To be privatized by TOR for 49 years.� Land registry studies are ongoing.

www.oib.gov.tr

Container Ports

Derince Port

� An important port in the Marmara, Turkey’s industrial region.

� To be privatized by TOR for 36 years.� Preparatory studies are ongoing.

İzmir Port

� The biggest container port in Turkey � To be privatized by TOR for 36 years. � Land development plan studies are ongoing.

11

www.oib.gov.tr

Turkey has one of the largest and fastest growing power markets in the CEEMEA * region

▪ Electricity demand growth is expected to outpace real GDP growth as a result of population growth, urbanisation, industrialisation and economic growth

▪ Turkey, as the sixth largest electricity generating country in Europe, has a per capita power consumption levelwell below Western European markets

▪ As well as enhancing competition and efficiency, the ongoing liberalisation process is also expected to bring the Turkish power market in line with EU market structures

▪ Opportunities to create vertically-integrated operations in the sector are expected to increase

Share of private players in the market is increasing

▪ Privatisation of the power distribution market is ongoing with a rapid pace

▪ Privatisation preparations for 16 GW of thermal and hydro generation assets are about to be completed

EÜAŞ privatisation process is of critical importance due to the contribution it will make tomobilize the growth potential of the sector

Turkish Power Market Opportunity

www.oib.gov.tr

16.35912.524

Electricity Generation Privatizations

� In 2008 as a pilot project 9 small power plants (ADÜAŞ) with a total capacity of 141 MW were sold to Zorlu Group for $510 million.

� 50 run-on river plants have already been tendered in 18 groups. The total size of the privatization was $440 million.

� In 18 groups, 4 cancelled, 10 transferred, 4 in the process of closing.� A new tender for 17 small run on river with an installed capacity of ~67 MW has already started.

Last bidding date is 05.10.2012.

� 9 Portfolios were formed ranging from 356MW to 2,795MW in size.� Seyitömer, Soma, Hamitabat and Kangal are priority as assets.� 3 thermal-only portfolios, 2 mixed thermal and hydro portfolios, 4 hydro-only portfolios.� For hydro plants; TOR (49 years), for thermal plants; asset sale method will be used.

Total capacity of EUASapp. 24,300 MW

Number of plants

1483,687

Thermal

18

Hydro

28

Run-on river

52

Total

98

Capacity subject to privat.

Timing

Privatizationmethod

Assets

12

www.oib.gov.tr

Design of Portfolio Groups

GROUP NO Hydroelectric Power Plants LocationInstalled Capacity

[MW]

1

Engil Van 4.6

Erciş Van 0.8

Hoşap Van 3.5

2 Koçköprü Van 8.8

3 Kısık Kahramanmaraş 9.6

4 Göksu Konya 10.8

5Bozkır Konya 0.075

Ermenek Karaman 1.12

6

Haraklı-Hendek Sakarya 0.26

Pazarköy-Akyazı Sakarya 0.17

Bozüyük Bilecik 0.36

7 Hasanlar Düzce 9.4

8Ladik-Büyükkızoğlu Samsun 0.4

Durucasu Amasya 0.8

9 Arpaçay-Telek Kars 0.062

Kiti Iğdır 2.76

10 Berdan Tarsus 10.2

TOTAL 63.7

17 small run on river power plants are currently in in tender[Last Bidding Date: 05.10.2012]

www.oib.gov.tr

Geographical distribution of 9 portfolio groups

Kürtün 85 MW

Almus 27 MWKöklüce 90

MW

Çamlıgöze 32 MWKılıçkaya 120 MW

Karacaören-132 MW

Gökçekaya 278 MW

Sarıyar 160 MW Kesikköprü

76 MW

Kemer 48 MW

Kapulukaya 54 MW Hasan Uğurlu 500 MW

Suat Uğurlu 69 MW

Derbent 56 MWAltınkaya 703

MW

Adıgüzel 62 MW

Demirköprü 69 MW

Doğankent 75 MW

Tortum 26 MW

Menzelet 124 MW

Hirfanlı 128 MW

Aslantaş 138 MW

Gezende 159 MW

Çatalan 169 MW

Özlüce 170 MW

Karkamış 189 MW

Yenice 38 MW

Kızılırmak Yeşilırmak

Fırat

Seyhan

Ceyhan Aksu

B. Menderes

Gediz

Göksu -Ermenek

Sakarya

Peri Çayı

Harşit Çayı

5

8

7

94

6

Aliağa180 MW

Orhaneli 210 MW

Bursa D.Gaz 1432 MW

Çatalağzı300 MW

Yeniköy 420 MWKemerköy 630 MWYatağan 630 MW

Kangal 457 MW

Ambarlı F.Oil 630 MWAmbarlı D.Gaz 1351

MW

A. Elbistan A 1355 MW

A. Elbistan B 1440 MW

Tunçbilek 365 MW

1

3

2

3

3

Hidroelektrik SantrallerTermik Santraller Portföy Grupları x Portföy Numarası

SOURCE: EÜAŞ.

Harşit 75 MW

13

www.oib.gov.tr

Timing

Privatizationmethod

Assets

� 10 regions are already privatized by PA. 3 were handed over in 2009, 6 in 2010 and 1 in 2011 respectively.

� 4 regions are waiting for closing, 3 (4) regions; (Aras), Gediz, Akdeniz and Boğaziçi will be retendered.

� TEDAS- The Holding Company for state owned regional electricity distribution companies

� Block sale of 100% of shares of the regional companies which have operational rights of the electricity distribution network

� Regulated tariffs with targets for distribution loss and operational costs� Future network investments to be earned back through tariffs

Number of Regions

Already privatized

Canceled

Total

BaşkentSakaryaMeramOsmangaziÇamlıbelUludağÇoruhYeşilırmakFıratTrakya

Van GölüDicleToroslarİstanbul Anadolu Side

The tenders for the privatization of Turkey’s electricity distribution network are now almost complete

To be closed 1810

4 4(Aras)

GedizAkdenizBoğaziçi

www.oib.gov.tr

The privatization of Turkey’s whole electricity distribution sector is at the closing stage.

14

www.oib.gov.tr

80% of the shares of the Başkent Natural Gas Distribution Company will be privatized by PA

�License for monopolistic distribution in Ankara till 2037

�2th largest natural gas distribution company in Turkey

�Total network 8.900 km

�2.3 billion m3 gas sales and 1.3 million subscriber (2011)

�High growth potential – ~ 100.000 newcomers per year

�Fixed tariffs in Dollar terms till 2017

�Collection thru 85% pre-paid system

�Block Sale of 100% of shares anticipated

�To be retendered in 2012Timing

Privatizationmethod

Assets

www.oib.gov.tr

32

� The holding company has 57 % of market share in Turkey� Total sugar production capacity per year: ~2 million tonnes� Total ethyl alcohol production capacity per year: ~58 million litres� Total seed production capacity per year for sugar beet: 3,000 tonnes

� Paid-in Capital [2011] : $ 1,116 million� Sales [2011] : $ 1,194 million � Number of Employees : 15.751

� PA aims to privatize the Company’s 25 factories / plants in 6 regional packages

� Majority stake in 2 affiliated companies were already successfully sold off� Portfolio B (Malatya, Erzincan, Elazığ ve Elbistan plants) and Portfolio C (Kastamonu,

Kırşehir, Turhal, Yozgat, Çorum ve Çarşamba plants) are pending for appoval.

Türkşeker

Timing

Privatizationmethod

Assets

15

www.oib.gov.tr

Location of the TURKSEKER Plants

Portfolio A

Portfolio E

Portfolio D

Portfolio B

Portfolio FPortfolio C

www.oib.gov.tr

35

� PA share : 49.12 %

� Total sales [2011] : $ 7.2 million

� Operating Profit [09/2011] : $ 132 million

� Net Profit [09/2011] : $ - 253 million

� Number of Employes [2011] : 15,737

� Number of Aircrafts [01/2012] : 179 (6 of them are cargo planes)

� Number of Destinations [2012] : 189 (40 domestic, 149 international)

� Passengers [12/2011] : 32.6 million

� Public offering or block sale of shares

� 23 % of the shares were sold through public offering in 2004

� 28.75 % of the shares were sold through public offering in 2006

Turkish Airlines

Timing

Privatizationmethod

Assets

16

www.oib.gov.tr

36

� PA Share [2011] : % 75

� Total Assets [09/2011] : $ ~ 91 billion

� Net Profit [09/2011] : $ ~1.5 billion

� Number of Employees : 13,643

� Leading bank in SME loans and services

� One of the largest branch network in Turkey with 771branches and units

� Strategy for the rest of the shares has not been set yet

� % 25 of the shares have already been privatized by IPO

Halkbank

Timing

Privatizationmethod

Assets

www.oib.gov.tr

� Strategy for the rest of the shares has not been set yet.

� 55 % of the shares were sold through block sale in 2005 for $6,550 million.

� 15 % of the shares were sold through initial public offering in 2008 for $1,911 million.

3,687

� Current shareholders of Türk Telekom:

� Treasury : ~32 %

� Oger Telecom : ~55 %

� Free Float :~ 13 %

� Total revenue [2011] : ~$6.3 Billion

� Net Profit [2011] : ~$1.1 Billion

� Costumer Profile:

� Fixed line [03/2012] : 15 million

� Mobile (AVEA) [03/2012] : 12.9 million

� ADSL (TTnet) [03/2012] : 7 million

� Number of Employees [03/2012] : ~35,600

TÜRK TELEKOM

Timing

Privatizationmethod

Assets

17

� After the wave of privatizations, PPP can be considered as a complementary step for further liberalization of economies.

� As it was in privatization the case - again starting in the UK, PPP have become a current issue throughout the world as a cost-effective solution

for investments which had normally been made by the public sector.

What is Public Private Partnerships ?

18

� In a broad sense the PPP projects can be considered as in-advance-privatizations of the future investments.

� In many cases PPP models are emerging as an integrated part of privatization projects.

� In connection of the privatization implementations Privatization Law No 4046 allows the application of almost all of PPP Models.

PPP - Privatization

Privatization PPPTOR New

Investments

PrivatizationRevenue

Revenu

Sharing

613,5- milyon $

Gov’t Share : 30 - 40 – 50%

Private Sector : Capex+Opex+Profit

20

Projected: $ 150M Realized > $ 300M

Projected:$ 8,000 M Expected: $ 10,000 M

Pri

vat

izat

ion

Rev

enu

e

Inv

estm

ents

▪ During preparation phase two concession zones for whole Turkey have been established.

▪ The JV Group (Akfen-Dogus-TÜV) has won tenders for both zones for $613.5M in 2005.

▪ The contract has been signed in 2007.

▪ Concession period is 20 years.

▪ The obligation due to contract to establish 189 stationary and 38 mobile stations in 18 months

has been satisfactorily fulfilled by the investor. (Currently 193 stationery and 71 mobile stations

are in operation and 3.000 people are employed.)

Source: Privatization Administration

Privatization of Vehicle Inspection Stations with Revenue Sharing Model

19

� Turkey is one of the first countries in the world which has developed its own PPP legislation. Law No 3096 enacted in 1984 permitted the private sector to invest in power generation.

� Following the first UK application in 1992 in the form of PFI in 1994 Turkey enacted a general law for BOT, the Law No 3996, which is applicable to different infrastructure areas like transportation, energy and water supply & treatment.

� Based on this legislation, first implementations of PPP projects came on the agenda and several projects, mainly in electricity generation and transportation sector have been realized as BOT projects. Later the BO method for thermic power plants was also been introduced.

� Regarding the PPP implementations Turkey had to overcome several problems in the past. But today it can present a large number of successful PPP projects, especially in the transport and energy sectors.

� Lastly with the Law No: 5396 a new PPP method for the healthcare sector called “Build-Rent-Transfer” has been introduced and for the first time in Turkey a special department only responsible for PPP projects has been intoduced.

� Nowadays Turkey has a big stock of PPP projects in various sectors like transport, waste treatment etc.

PPP in TURKEYHistory

20

Ministry of Development

PPP

Treasury

Ministry of Finance

Public Procurement

Agency

Privatization

Administration

Line Ministries

Regional Authorities

Macroeconomic Planning

State Guaranties

Budgetary Issues

Supervising Tenders

Implementation

Implementation

Implementation

PPP in TurkeyFunctions of the Stakeholders

High Planning Council

HPCPrivatization High Council

PHC

Line Ministries

Ministry of Development

SOE

Min. Of Interior

Regional Authorities


BOT - BO - TOR – LTR - BRT

Co

nce

ssio

ns

BO

T –

BO

TO

R -

LT

R

SOEMin. Of Health

+ B

RT

BOT - BO - TOR – LTR etc.

BO

T –

BO

TO

R -

LT

R

BO

T –

BO

TO

R -

LT

R

BO

T –

BO

TO

R -

LT

R

BO

T –

BO

TO

R –

LT

Re

tc

PPP in TurkeyInstitutional Framework

21

47

� In Turkey; as the end of 2011, contracts for 131 PPP projects have been signed

Motorways; 21 [16%]

Airports; 14 [11%]

Harbors; 19 [14%]

Marinas; 14 [11%]

Border Gates; 8 [6%]

Health Facilities;1 [1%]

Energy Production; 53 [41%}

Distribution of Project Numbers by Sectors

Source: Ministry of Development

(İTİC-UNESCWA-UNDP PPP EVENT 26.01.2012-İstanbul)

A Snapshot of PPP in Turkey

� ENERGY� Electricity generation, transmission,

distribution and trade

� TRANSPORT� Motorways, Highways Bridges, Tunnels,

Parking Lots, Motorway service stations� Vehicle Inspection Stations� Railways / Railway stations/ Logistic Centers� Seaports /Airports

� AGRICULTURE� Dams, Irrigation

� DRINKING WATER & SEWERAGE� Drinking & Raw Water Facilities� Purification Plants� Sewerage Systems� Waste Treatment

� HEALTH� Hospitals

� TOURISM� Marinas

� ADMINISTRATION� Port of Entries (Border Gates)

� MINING� Mining & processing

� ENVIRONMENT� Investments Against Pollution

� PRODUCTION� Factories

� COMMUNICATION

� OTHERS� Wholesale marketplaces� Facilities in natura/wildlife

protection areas.Source: SPO/AGT

PPP – Areas in Turkey

22

• ELECTRICITY DISTRIBUTION COMPANIES

• ELECTRICITY GENERATION FACILITIES

• BAŞKENTGAZ (NATURAL GAS DISTRIBUTION IN ANKARA) (TOR)

• CRUISE PORTS

• SALIPAZARI

• İZMİR

• CONTAINER PORTS

• DERİNCE

• İZMİR

• MARINAS

• MERSİN- TAŞUCU

• İSTANBUL- KALAMIŞ FENERBAHÇE

• TÜRKŞEKER (SUGAR PROCESSING)

• HALKBANK

• TÜRK TELEKOM

• THY – TURKISH AIRLINES

• VARIOUS IMMOVABLES

Currently the majority in the PA’s pipeline consists of the infrastructure projects which are to be privatized using PPP Method.

23

� BOT Projects� Marmara Ereğlisi-Trakya Natural Gas PP � Marmara Ereğlisi-Unimar Natural Gas PP� Gebze-Dilovası Natural Gas PP� Esenyurt Natural Gas PP_______________________� Berdan Hydroelectric PP� Çal Hydroelectric PP� Birecik Dam & Hydroelectric PP � Çamlıca Hydroelectric PP� Aksu-Çayköy Hydroelectric PP� Fethiye Hydroelectric PP� Tohma-Medik Hydroelectric PP� Girlevik II-Mercan Hydroelectric PP� Gaziler Hydroelectric PP� Gönen Hydroelectric PP� Kısık Hydroelectric PP� Hasanlar Hydroelectric PP� Suçatı Hydroelectric PP� Dinar II Hydroelectric PP� Ahiköy I-II Hydroelectric PP� Sütçüler Hydroelectric PP� Çeşme-Alaçatı Wind PP____________________� Bozcaada Wind PP

� BO Projects� Gebze Natural Gas PP

� Adapazarı Natural Gas PP

� İzmir Natural Gas PP

� Ankara Natural Gas PP

� İskenderun Thermoelectric PP

� TOR Projects� Çayırhan Thermic PP

� Hazar I-II Hydroelectric PP

Source: SPO

PPP Implementations in Turkey-Power Plants-

BİRECİK HEPP

Source: Türker Yöndem


1995 – Law. No. 3096 BOT - 15 Years - 672 MW – 1.2 billion $

PPP Implementations in Turkey-Power Plants-

24

ELBİSTAN C&E LIGNITE POWER PLANT

Source: TEBA July 2012 / AGT

PPP Implementations in Turkey-Power Plants (PPs)-

� Using the coal from the fields C&E of Elbistan Afşin a 1,400 MW thermal PP will be built with BOT scheme.

� The total investment together with investments in coal fields: $3.3 to 3.6 B. ($2.5 B for PPs)

� The construction period 5 years, operation period 30 years .

� In addition, payment to the government 7% for using coal

� Price will be guaranteed for 15 years the price (for the first 5 years, 75 %, in the following next 5 years, 50 % and 25 % for the last 5 years purchase guarantee)

� EÜAŞ will have 35 % share in the project company.

� Bids will be requested in September 2012. Project company will be founded in 2013.

� Tendered on the lowest electricity sale price (minimum guaranteed price)

� Ministry for Energy is in negotiations with South Korea for establishing a Intergovernmental Agreement for the project.

25

İSTANBUL AIRPORT

1- 1997 – Law No. 3996 BOT - 5,5 years - 400 m. $

2- 2005 – Law No. 4046/ 5335 TOR - 15,5 years - 3 billion $



PPP Implementations in Turkey-Airports-

ANKARA AIRPORT

2004 – Law No. 3996 BOT – 15 years 8 months Cost: 230 m.$ - Capacity: 10 m. Passenger



PPP Implementations in Turkey-Airports-

26

SABİHA GÖKÇENSABİHA GÖKÇENSABİHA GÖKÇENSABİHA GÖKÇENATATÜRKATATÜRKATATÜRKATATÜRKA.MENDERESA.MENDERESA.MENDERESA.MENDERESDALAMANDALAMANDALAMANDALAMAN ANTALYAANTALYAANTALYAANTALYA

ESENBOĞAESENBOĞAESENBOĞAESENBOĞAÇAYCUMAÇAYCUMAÇAYCUMAÇAYCUMAGAZİPAŞAGAZİPAŞAGAZİPAŞAGAZİPAŞA

Airports built / operated with PPP Model

� Antalya Airport Int. Terminal Buildings I. & II. (BOT)

� Atatürk Airport Int. Terminal Building (BOT)

� Dalaman Airport Int. Terminal Building (BOT)

� Izmir Adnan Menderes Airport Int. Terminal Building (BOT)

� Ankara Esenboğa Airport Domestic & Int. Terminal Building (BOT)

� Sabiha Gökçen Airport Int. Terminal Building & (BOT)

� Atatürk Airport Domestic & Int. Terminal Building (LTR)

� Antalya Airport Domestic & Int. Terminal Buildings (LTR)

�

� Zonguldak Çaycuma Airports (LTR)

� Antalya Gazipaşa Airports (LTR)

� Zafer Regional Airport Project (BOT)(Construction started in April 2011)

� Çua Regional Airport Project (BOT)(Ckurovontract signed in January 2012)

Source: Ministry of Transport / AGT

PPP Implementations in Turkey

-Airports-

ÇUKUROVAÇUKUROVAÇUKUROVAÇUKUROVAZAFERZAFERZAFERZAFER

Source: Ministry of Transport / AGT

PPP Implementations in Turkey-3th Airport to Istanbul-

• One of the 2023 year projects.

• On the Black Sea coast.

• The capacity is set as 120 million pax per year.

• It will have 6 runways with 3.5 to 4 km’s in length allowing the jumbo-jets

landing and take-offs, 4 runways will be parallel to the Black Sea and 2 vertical

to it.

• It will built on 3,500 acre of land (7x5 km’s) within the boundaries of Arnavutköy

• To be completed at the same time with the 3th Bosporus Bridge and Northern

Marmara Motorway.(2016?)

• There will be a 1100-hectare of high-tech industry and commerce area and

special economic zone

• A new city with maximum of one million inhabitants will surround the

city airport.

• It will be positioned to minimize the sound of flight paths.

• Terminal building will be designed as a green building.

• Public transportation from / to all regions of Istanbul. Reachable in 15 minutes

from Taksim by railway.

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MoT

TENDERED UNDER BOT SCHEME & Proposals were received on 2nd March, 2011.

IMPORTANT PROJECTS

ANKARA HIGH SPEED TRAIN STATION

TURKISH RAILWAYS - Bridge between Europe and Asia -Source: Ministry of Transport

28

SUNUM İÇERİĞİSUNUM İÇERİĞİSUNUM İÇERİĞİSUNUM İÇERİĞİ

İSTANBUL

EDİRNE

ESKİŞEHİR

POLATLI

ANKARA

KONYA

İZMİR

SİVAS

AFYON

KAYSERİ

BURSAYOZGAT

ERZİNCAN

ERZURUM

KARS

MERSİN

ADANA GAZİANTEP

TRABZON

IMPORTANT PROJECTSHIGH SPEED TRAIN STATIONS MoT

HIGH SPEED LINES UNDER CONSTRUCTION

PLANNED HIGH SPEED LINES

HIGH SPEED TRAIN STATIONS

COMPLETED HIGH SPEED LINES

TURKISH RAILWAYS - Bridge between Europe and Asia -

ANTALYA

ALANYA

DİYARBAKIR

MALATYA

ELAZIĞ

Source: Ministry of Transport

High Speed Railway (HSR) Projects to be built with PPP models

1. Ankara-İzmir HSR 624 km

2. Halkalı-Kapıkule HSR 230 km

3. Ankara-Sivas HSR 466 km

4. Sivas-Kars HSR 714 km

5. Eskişehir-Antalya HSR 426 km

6. Konya-Karaman-Mersin HSR 341 km

7. Bandırma-İzmir HSR 245 km

8. Bandırma-Bursa HSR 186 km

9. Yerköy-Şefaatli-Kayseri HSR 142 km

10.Kırıkkale-Çorum-Samsun HSR 285 km

11.Trabzon-Erzincan HSR 337 km

12.Sinan-Çayırhan-İstanbul HSR 409 km

13.Antalya-Konya-Aksaray-Nevşehir HSR 550 km

Total Projects HSR Projects 4,955 km


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30

Motorways projects to be built with PPP models (2011-2023)

1. Gebze-Orhangazi-İzmir Motorway (Incl. İzmit Gulf Crossing) (Under Construction) 421 km

2. Sabuncu Tunnel (Under Construction) 4 km

3. North Marmara Motorway (Incl. 3th Bosphorus Bridge) ) (Under Construction) 414 km

4. Ankara-Niğde Motorway 342 km

5. a) Ankara-Samsun Motorway (Ankara-Kırıkkale-Delice Section) 112 kmb) Ankara-Samsun Motorway (Delice-Samsun Section) 360 km

6. a) Aydın-Denizli-Burdur Motorway (Aydın-Denizli Section) 175 kmb) Aydın-Denizli-Burdur Motorway (Denizli-Burdur Section) 155 km

7. Kınalı-Tekirdağ-Çanakkale-Balıkesir Motorway 359 km

8. Ankara-İzmir Motorway 535 km

9. Afyonkarahisar-Antalya-Alanya Motorway 490 km

10. Sivrihisar-Bursa Motorway 202 km

11. Şanlıurfa-Habur Motorway (incl.Diyarbakır Connection) 445 km

12. a) Gerede-Merzifon-Gürbulak Motorway (Gerede-Merzifon Section) 357 kmb) Gerede-Merzifon-Gürbulak Motorway (Merzifon Gürbulak Section) 919 km

13. Yalova-İzmit Motorway 81 km

14. Mersin-Silifke (Taşucu) Motorway 98 km

15. Çiğli-Aliağa-Çandarlı Motorway 81 km

Total Projects Between 2011-2023 5,550 km



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Motorways to be built with PPP model-İstanbul-Gebze-Orhangazi-İzmir Motorway


• BOT Project

• 421 km incl. İzmit Buy Crossing

• Construction started in October 2010

North Marmara Motorway Including 3th Bosphorus Bridge

Motorways to be built with PPP modelNorth Marmara Motorway Incl. 3th Bosphorus Bridge

•BOT Project

•299 km motorway

•115 km length of access roads

•Will be retendered in April 2012.


32

69

Motorways to be built with PPP model

Construction of the Bosphorus Tunnel started in February 2011!


33

TCDD MERSİN PORT

2007 – Law No. 4046 – TOR/Concession - 36 Years – 755 m. $

PPP Implementations in Turkey-Ports-

� Çandarlı Port

� Mersin Port

� Karasu Port

�Filyos Port

72

Ports to be built with PPP model


34

� In operation : 6 marinas

�In Construction : 7 marinas

� To be tendered : 8 marinas

Total Capacity: 7,490 yachts, total investment 250 milyon $)

Yalova Marina Alanya Marina

Marinas built/to be built with PPP model

Source: Ministry of Transport/AG

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� Ministry of Health plans that 29 Integrated Hospital Complexes (Hospital Cities) with > 50,000 beds will be built by using the Built-Rent-Transfer Method.

� The medical services (employment of doctors, and the clinical services) will be handled by the Ministry, while maintanance & commercial services will be provided by the operator..

� Depending on the size of investment the construction period differs between 2-3 years, operation period is usually set 25 years.

� Depending on the investments& services to be delivered, a yearly rent will be paid to the operators.

� *Istanbul İkitelli Integrated Hospital Complex with 1,980 bedsSource: Ministry of Health

PPP in Health Sector

36


Subsector PPP-Hospital Project Capacity [Beds]

Ankara Etlik 3.056

Kayseri 1.548

Ankara Bilkent 3.225

İstanbul İkitelli 2.272

Integrated Hospital Complexes Konya Karatay 810

Adana 1.400

İzmir Bayraklı 1.450

Kocaeli 1.150

Mersin Toroslar 1.100

Elazığ 950

Manisa 400

Education & Research Hospitals Gaziantep 1.550

Bursa 1.200

Yozgat 475

Pysical Therapy & Rehabilitation Hospitals [6] Afyon, Diyarbakır, Erzurum,Malatya, Samsun, Van

900

High Security Forensic Psychiatry Hospitals [7] Diyarbakır, Erzurum, İstanbul, Bakırköy,Samsun, Trabzon, Van

700

Psychiatry Hospitals [8] Bolu, Diyarbakır, Erzurum, İstanbul, Bakırköy,K. Maraş, Samsun, Trabzon, Van

1.030

City Hospital Isparta City Hospital 600

� The tender process for more than 25,000 beds is already started:


Prequalification finalized At the Bidding Stage Final Bids received At the contracting stage Construction started

Physical Therapy & Rehabilitation H. / High Security Forensic Psychiatry H. / Psychiatry H.

Adana Integrated Health Campus

Bursa Integrated Health Campus

Ankara Bilkent Integrated Health Campus

Kayseri Integrated Health Campus

Isparta City HospitalGaziantep Integrated Health

CampusMersin Integrated Health

CampusAnkara Etlik Integrated Health

Campus

Kocaeli Integrated Health Campus

İzmir Bayraklı Integrated Health Campus

Elazığ Integrated Health Campus

İstanbul İkitelli Integrated Health Campus

Konya Karatay Integrated Health Campus

Manisa Integrated Health Campus

Yozgat Eğitim ve Araştırma Hastanesi

37

� 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

� Mardin Nusaybin

� Edirne Hamzabeyli

� Pazarkule

� Esendere

� Türkgözü

� Dilucu

� Akçakale

� Öncüpınar

� Yayladağ

� Kırklareli Dereköy

� İstanbul Halkalı

� Şırnak Ali Rıza Efendi

� DRINKING WATER

� Yuvacık Dam (BOT)

� MINING

� A-Kafa Ore Extraction Facilities (BOT)

� EDUCATION

� Students dormitories

� WASTE TREATEMENT

� Ankara Mamak Waste Processing Site (ITC)

Source: SPO

PPP Implementations- Other Sectors -

38

The Project “Channel Istanbul” is planned to be built with BOT Model

39

� Although the PPP models are in Turkey already in use, in order to accelerate and extend the implementations of the PPP models, the government intents to establish a new legal and administrative framework for so called “Second Generation of the PPP Projects”

� Some International advisors have been assigned for the preparations and a draft law has been prepared by the State Planning Organization (SPO).

� By the Decree Law No: 641 from June 2011 a special department for PPP in the Ministry of Development has been established. It may be considered as a first tangible step towards to a central coordination unit for all PPP implementations in Turkey

The Need for a new PPP Law

40

There are some major amendments in the PPP related legislation made throughout the years

� 1999 : Amendment in the Constitution and Law no: 4493� The application of the private Law on PPP contracts � International arbitrage for the PPP contacts with foreign partner� No mandatorily approval of the concession contracts by the Council of State (Taking opinion is

sufficient)

� 2008 :Law no: 5762 amending the BOT Law No 3996� The scope covered by the BOT models has been extended.� Shadow price, the budgetary limitation hereof and interest for delayed payment by the state

have been presented for the first time.

� 2010 :Law no: 6001 amending BOT Law No 3996� Replaced the the Law No 5539 for General Directorate for Highways and the Law for Motorways� Amendiments in the Forest Law No 4749� Arrangements for a early termination have been set up.

� 2011 :Law no: 6111 amending BOT Law No 3996� Revenue sharing model by Treasury Guarantee.� Exception of hiring consultancy services by Administrations from the Public Procurement Law.� No cost for the usage of land belonging to the state for BOT pojects. � For signing of BOT contacts the approval by the related minister is sufficient.

Major Amendments Made on current PPP-Legislation

� Definition of PPP

� Limited Number of PPP Models

� Current legislation limited to BOT, BO, TOR, LTR and BLT models

� Limited scope of the existing PPP legislation

� Justice, education, culture are out of the scope

� Lack of Harmonization among PPP Laws

� Several sector specific and model specific PPP laws

� Lack of a Central Administrative Structure for the PPP Projects

� Assignment of different public bodies for the implementation of PPP Projects

� Lack of a central public body responsible for setting PPP policies and coordination

� Lack of coordination among the related public bodies- Need for a Central Unit

� EU Accession Process

The Need for a new PPP Law

41

� Extending the PPP covered areas. [PPP Definition]

� Allowing for new and more flexible PPP models.

� Unification of widespread Legislation.

� Coordination among govt’l agencies.

� Standardization of documents & procedures

� Education &Training for capacity building

� Harmonization with EU regulations

� Facilitating bankability

� Establishing a suitable administrative structure [PPP Unit]

NEW PPP LAW

Expectations from a New PPP Law

Ali Güner TekinHead of Department

+90-312-435 076 68a g t e k i n @ o i b . g o v . t r

PRIME MINISTRY OF TURKEYPRIVATIZATION ADMINISTRATION

THANK YOU

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