Public Private Partnership in Turkey

Transcription

1 T.R. MINISTRY OF DEVELOPMENT Public Private Partnership in Turkey SEDEF YAVUZ NOYAN Head of Public Private Partnership Department

2 Outline Investment Prospects Turkey s PPP Experience Lessons Learned and Steps Taken

3 Outline Investment Prospects

4 Good infrastructure: Investment Prospects Investment in infrastructure Key to sustainable & inclusive growth & productivity Private and public sector productivity, Reduces business costs, Creates jobs, Provides people with access to civilization, to services and products equally, Helps decreasing disparities regionally. 4

5 Investment Strategy in Turkey Strategy papers determining the investment strategy: Five-Year Development Plans Medium Term Programs (3-Year) Annual Public Investment Programs 5

6 10th Development Plan ( ): Investment Strategies Public and private sector investments will be addressed with a holistic approach for achieving high and stable growth performance. Public investments will be intensified on economic and social infrastructure areas that could not be fulfilled by private sector. Emphasis on «infrastructure management»: better maintenance and repair, efficient use of existing assets. 6

7 10th Development Plan ( ): Investment Strategies Priority areas (including PPPs) are: education, health, drinking water and waste science and technology, transportation irrigation sectors. water, 7

8 Public Investments in Turkey Public invesments have increased remarkably in the last 10 years Public Investments by Years ($ billion) *Excluding local governments investments 8

9 Outline Turkey s PPP Experience

10 PPP Investment/Public Investment Ratio 90% PPP Investments / Public Investments* 80% 70% 76% 60% 50% 40% 30% 27% 20% 10% 0% 10% 14% 5% 3% 0% 1% 0% 1% 3% 1% 7% 10% 3% *Excluding local governments investments 10

11 Turkey s PPP Market in 2016 Turkey ranks third in European PPP market according to EPEC (European PPP Expertise Center European Investment Bank-2016) & Turkey ranks third among 139 countries according to World Bank (between ) 11

12 Incentive Mechanisms for PPPs in Turkey Shadow toll or revenue guarantees, Debt assumption by Treasury: BOTs must have a minimum investment cost of 1 billion TL (app. $ 340 million) BLTs must have a minimum investment cost of 500 million TL (app. $ 170 million) 12

13 Incentive Mechanisms for PPPs in Turkey «Step-in» right for the creditors, Exemption from VAT, stamp duty and charges, Free use of state-owned immovable assets and expropriation, International arbitration is allowed. 13

14 Bidding Criteria for BOT and BLT Projects Operation Period, Lease Amount (paid by investor to government in BOT projects), Lease Amount (paid by government to investor in BLT projects), Minimum Revenue Guarantee. 14

15 Financing Structure in PPP Projects in Turkey Minimum equity/credit ratio for PPP projects is 20%/80% according to legislation, For mega projects, 80% credit becomes the most common practice. 15

16 PPP Models and Legislation in Turkey Models & Legal Framework & Sectors Build-Operate-Transfer Law No 3996, 3465 and 3096 Build-Operate Law No 4283 Build-Lease-Transfer Law No 5396,652,6428 and 351 Transfer of Operating Rights Law No 4046,5335,3465,3096, 4458 Motorway Port Airport Marina Border Gate Power Plant Thermal Power Plant Hospital College Dormitory School Airport Port Power Plant Electricity distribution Border Gate 16

17 How PPP projects are submitted 1) Preparation Stage (BOT and Health BLT Projects): Strategy Papers Development Plan NEEDS ANALYSIS Feasibility Analysis Medium Term Program Financial Analysis Yearly Program Investment Program APPLIANCE FOR AUTHORIZATION Economic Analysis Social Analysis Sectoral Strategies Public Sector Comparator

18 How PPP projects are submitted: 2) Authorization Stage PUBLIC INSTITUTIONS & SEE s MINISTRY HIGH PLANNING COUNCIL MINISTRY OF DEVELOPMENT MUNICIPALITIES MINISTRY OF INTERIOR MINISTRY OF FINANCE TREASURY

19 How PPP projects are submitted: 3) Tendering and Approval Stage TENDERING PERIOD SELECTION OF PRIVATE PARTNER SIGN THE DRAFT CONTRACT DRAFT CONTRACT TECHNICAL SPECIFICATIONS INSTITUTIONAL SPECIFICATIONS APPROVAL OF THE RELATED MINISTER

20 Turkey s PPP Experiences Project in Operation Project in Financial Close/Construction Total Project Number Project Contract Value Project Investment Cost $ 51 billion $ 78,5 billion $ 17 billion $ 41,5 billion $ 129,5 billion* $ 58,6 billion* * In 2017 prices 20

21 Turkey s PPP Experiences Distribution of Project Numbers by Models Transfer of Operating Rights, 88, 41% Build-Operate- Transfer, 103, 47% Build-Lease- Transfer, 21, 10% Build-Operate, 5, 2% 21

22 Turkey s PPP Experience Culture and Tourism Railway Border Gates $ 0,13 $ 0,24 $ 0,39 $ 1,4 Industrial Facilities Marinas $ 1,9 Total Contract Value $ 129,5 $ 2,6 Ports Health Campuses $ 11,6 $ 17 Motorway related $ 25,7 $ 68,6 Energy Airports * 2017 Prices, Billion $

23 Large-Scale Projects by PPPs

24 Projects Realized in the Last Seven Years 7 motorway projects contracts are signed Total length: km (including 3 suspension bridges and a tunnel) Total investment cost: $ 16,8 billion 3 out of the 7 projects are under operation Total length: 215 km (including 2 suspension bridges and a tunnel) Total investment cost: $ 11 billion * In 2017 prices 24

25 Health Campuses There are totally 29 PPP (BLT) projects which are authorized by High Planning Council, Total bed capacity is for authorized 29 PPP projects, The 21 of 29 projects contracts are signed, 14 are financially closed. * In 2017 prices 25

26 Projects Realized in the Last Seven Years 21 hospital projects contracts are signed Total capacity: beds Total investment cost: $ 11,5 billion 3 out of the 21 projects are under operation Total capacity: beds Total investment cost: $ 857 million * In 2017 prices 26

27 North Marmara Motorway Project (Including 3rd Bosphorus Bridge) 148 km motorway, including Yavuz Sultan Selim Bridge (3rd Bosphorus Bridge) part already in operation by 26th August. The longest suspension bridge with railway pass and the widest span between bridge piers. 27

28 North Marmara Motorway Project (Including 3rd Bosphorus Bridge) 3.AIRPORT GARİPÇE RİVA USKUMRUKÖ Y POYRAZKÖ Y HÜSEYİNLİ ODAYERİ IŞIKLAR REŞADİYE PAŞAKÖY BAŞAKŞEHİR Ç AMLIK SULTANBEYLİ MAHMUTBEY SABİHA GÖ KÇ EN AIRPORT ATATÜ RK AIRPORT 28

29 North Marmara Motorway Project (Including 3rd Bosphorus Bridge) Model: BOT, Investment cost: $ 2,6 billion, Construction period: 2,5 years, Operation period: 7 years 8 months (bidding critera), * In 2017 prices 29

30 Eurasia Tunnel Model: BOT, Investment cost: $ 1,3 billion, Capacity: m tunnel, 20 km s in total, Construction Period : 4,5 years, Operation Period: 24,5 years (bidding criteria) In operation since 20 December * In 2017 prices 30

31 Gebze-Orhangazi-İzmir Motorway Project Model: BOT, Investment cost: $ 7 billion, Capacity: 433 km motorway, Includes Osmangazi Bridge Connects İstanbul to İzmir Operation period: 15 years 4 months 75 km part of the motorway (including the 2,6 km Osmangazi Bridge) is in operation since July * In 2017 prices 31

32 İstanbul New Airport One of the biggest airports in the world by means of passenger capacity, Model: BOT Investment cost: $ 14,4 billion, 4 phases, 1st in operation by 2018 Final capacity: 150 million capacity 4 terminal building 6 runway 16 taxiway Construction period: first phase 42 months Operation period: 25 years Lease amount: $ 35,5 billion (inc. VAT) (bidding criteria) 1,4 billion lease/year * In 2017 prices 32

33 Kınalı-Tekirdağ-Çanakkale-Balıkesir Motorway Project Model: BOT, Investment cost: $ 2,85 billion, Capacity: 88 km motorway, Includes 3,6 km Çanakkale Strait Bridge, Connects İstanbul to Balıkesir, First bridge between Asia and Europe, excluding the bridges in İstanbul * In 2017 prices 33

34 Menemen-Aliağa-Çandarlı Motorway Project Model: BOT, Investment cost: $ 394 million, Capacity: 75,6 km motorway, Connects large scale ports of Agean Region, namely Çandarlı Port, Aliağa Port and Refinery Region to İzmir. * In 2017 prices 34

35 Mersin Health Campus Model: BLT, Investment Cost: $ 371 million, Bed Capacity: 1.250, Construction Period: 3 years,. Operation Period: 25 years, Contract signed by 2013, Bid Evaluation Criteria: The lowest lease amount, Opened in February * In 2017 prices 35

36 Yozgat Health Campus Model: BLT, Investment Cost: $ 177 million, Bed Capacity: 475, Construction Period: 3 years,. Operation Period: 25 years, Contract signed by 2013, Bid Evaluation Criteria: The lowest lease amount, Opened in January * In 2017 prices 36

37 Ankara Bilkent Health Campus Model: BLT Investment Cost: $ 1,2 billion, Bed Capacity: Construction Period: 3,5 years, Operation Period: 25 years, Contract signed by 2012, Bid Evaluation Criteria: The lowest lease amount, Will be opened in * In 2017 prices 37

38 Health Campuses in Tendering Stage Model: BLT, Samsun, Denizli, İstanbul Üsküdar, İstanbul Bakırköy, İzmir Yenişehir, Antalya, Aydın, Diyarbakır Health Campuses, Total Investment cost : $ 1,41 billion* Total Capacity: beds * According to dated exchange rate * In 2017 prices 38

39 Project Pipeline $ 6,5 Billion projects in short-term pipeline (mostly transportation projects), New logistics centers, port projects, railway projects, irrigation projects and urban infrastructure projects are expected to come in mid-term pipeline. 39

40 Outline Lessons Learned and Steps Taken

41 What Turkey Has Learned? On private sector side: o Political stability and political will to implement PPPs exist, o Good regulatory environment, where rule of law is valid, o Macroeconomic stability of the country, o Reliable dispute resolution mechanisms, o Good capacity in governmental organizations. 41

42 On public sector side: What Turkey Has Learned? o Understanding what a PPP project means (Not carrying out a project free of charge or realizing the project immediately), o Prioritizing the projects in the means of project value and sectoral importance and choosing the right project. 42

43 What Does Turkey Do Further? o Preparation of the draft framework PPP law o Gathers the scattered legislation under a single framework law o An easy to understand structure for foreign investors o Standardizes the PPP processes o Capacity building program with the World Bank o Strengthens Turkey s PPP Program o Standardizes the project preparation, evaluation and monitoring frameworks o Defines a roadmap for improvement of Turkey`s PPP capacity 43

44 Thank You Thank you