Turkish Experience in Public-Private Partnerships - Özlem AYDIN SAKRAK, Turkey
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TURKISH EXPERIENCE IN PUBLIC-PRIVATE PARTNERSHIPS Özlem AYDIN ŞAKRAK Senior Associate at PPP Department Turkish Treasury March 2016, Paris Republic of Turkey Undersecretariat of Treasury
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Transcript of Turkish Experience in Public-Private Partnerships - Özlem AYDIN SAKRAK, Turkey
TURKISH EXPERIENCE IN PUBLIC-PRIVATE PARTNERSHIPS
Özlem AYDIN ŞAKRAK
Senior Associate at PPP Department
Turkish Treasury
March 2016, Paris
Republic of Turkey
Undersecretariat of Treasury
Agenda
An Overview
PPP Market in Turkey
Major PPP Projects in the Pipeline
Strengths and Challenges
1
3
An ambitious objectives and important infrastructure gap
A long standing experience in PPP models
Crucial role of private investment in development plans
Overview: TURKEY
(Source: Ministry of Development)
Share of the Investments in GDP (1998-2014)
2
$43
$72
In Operation
Contract Values in Billion $ Contract Values
(115 Billion $ in Total)
164
34
At construction
Number of Contracts
(198 in Total)
PPP Market in Turkey
3 *By November 2015 (Source: 2016 Annual Program)
Build Operate Transfer
98
Transfer of Operating
Rights
78
Build Lease
Transfer
18
Build Operate
5
PPP Market in Turkey
4
PPP Market in Turkey
0
20
40
60
80
76
33
22 18 18 16 13
2 1
Number of Projects by Sector
5
Public Stakeholders in Turkey
7
MINISTRY OF
HEALTH
MINISTRY OF
CUSTOMS AND
TRADE
MINISTRY OF
TRANSPORT IMPLEMENTING
INSTITUTIONS
TRANSPORT ENERGY CUSTOMS HEALTH
MINISTRY OF
ENERGY
UNDERSECRETARIAT
OF TREASURY
MINISTRY OF
DEVELOPMENT
MINISTRY OF
FINANCE
AUTHORISING
BODY
RELATED
INSTITUTIONS
HIGH PLANNING COUNCIL (HPC)
6
Credit Enhancement Tools
Revenue Guarantees by procuring institutions Traffic guarantee Lease payment Conditional specific compensations
Debt Assumption Commitment
Exemption from VAT, stamp taxes and duties
7
A credit enhancement tool: Debt Assumption Commitment
In case of an early termination of the contract provided that
the project assets are taken over by the public administration
Limitations
Only for foreign financing
Partial debt assumption (Authority default & force
majeure: % 100, Company default: % 85)
Only for BOT model and BLT models implemented with
general & special budget agencies
A threshold for the investment amount
• for BOT projects > 1 billion TL
• for BLT projects > 500 million TL
Subject to a budgetary limit – 3 billion $/annual (@ 2015)
8
Debt Assumption Commitment: Projects
Project
Debt
Assumption
Agreement
Date
Total Project
Cost Loan
Eurasia Tunnel 11.12.2012 USD 1,2 Billion USD 960 Million
3rd Bosphorus Bridge 13.05.2014 USD 2,9 Billion USD 2,3 Billion
Gebze-İzmir
Motorway
05.06.2015 USD 6,3 Billion USD 5 Billion
Total USD 10,4 Billion
USD 8,2 Billion
9
Eurasia Tunnel
► BOT model
► Connects the Asian and European sides via a highway tunnel going underneath the seabed (only for light vehicles)
► Cost about USD 1.2 bln
► Loan: USD 960 mln
► Construction started in 2011
► Operation period 26 years
► Debt Assumption by Turkish Treasury
10
Gebze-İzmir Motorway (incl. İzmit Bay Crossing)
► BOT model
► Over 400 kilometres of motorway – Connecting İstanbul, Bursa and İzmir
► İzmit Bay Suspension Bridge – 4th longest in the world
► Samanlı Tunnel- longest motorway tunnel in Turkey
► Total Investment Amount: USD 6.3 bln / Loan: USD 5 bln
► Construction started- Operation period 15 years
► Treasury’s debt assumption
11
3rd Bosphorus Bridge
► BOT model
► Total length 95 km including 3rd Bosphorus Crossing Bridge
► Total cost: USD 2.9 bln / Loan: USD 2.3 bln
► Construction period: 2 years and 6 months (started)
► Operation period: 7 years, 8 months and 20 days
► Approximately 1875 meter long 3rd Strait bridge, which has 2x 4 lanes of motorway
and 2x1 lanes of railway, is the most prominent part of the project.
► Debt Assumption by Turkish Treasury 12
Istanbul New Airport
BOT model
25 years operation period
Contracted in 19 Nov. 2013
Construction Cost: €10 bln
4 phases, construction of
the initial phase is set to be
completed by the end of 2017
150 million passengers
capacity
Initial capacity 90 million
passenger per year
13
Health PPPs
There are totally 34 PPP projects in the pipeline.
For 18 of them, the projects’ contracts are signed.
Total bed capacity is 27.911 for these 18 projects
6 Projects has reached the financial close among these 18 Projects: Ankara
Etlik, Ankara Bilkent, Yozgat, Mersin, Adana, Isparta
The SPV will supply and maintain the hospital facilities, while the provision
of medical care and services will remain the responsibility of the MoH
Source: Ministry of Health 14
Strengths
Turkey’s strong economic fundamentals and dynamic construction sector
A high level of support from the government for the large PPP programme,
The existing successful PPP track record in certain sectors
Credit enhancement tools
Comprehensive legal framework
15
There is room for improvement….
Effective appraisal and selection of projects
The institutional capacity of the related public bodies
Central administrative structure for the PPP Projects
Harmonization among PPP Laws
Effective monitoring and evaluation system
16
Thank you
Ozlem AYDIN SAKRAK
Senior Associate
Undersecretatiat of Turkish Treasury
ozlem,[email protected]
