2nd PPP in Turkey forum

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  • BOT: BOT is a model which stipulates an infrastructure facility is designed and financed so that it can be constructed and operated for a period until the invested amount (including the profits) is recovered and finally transferred to the public administration without any remuneration. TRANSFER OF OPERATING RIGHTS: This model stipulates the transfer of operating rights of a certain facility which belongs to the public administration to a private sector company for a certain period of time. Build-Operate Model: This model stipulates an infrastructure facility is designed and financed so that it can be constructed and operated for a period until the invested amount (including the profits) is recovered. The difference of this model from the Build-Operate-Transfer is that the facility is the property of the private sector. It is applied only in the energy sector. Power plants using renewable resources are excluded from the scope of this model.BUILD-LEASE-TRANSFER MODEL: This model refers to having the health facilities as required by the Higher Planning Council constructed and restored by real persons or private law legal entities to be determined by tender on the immovables belonging to the Ministry or the Treasury, in return for lease over the cost and for a period of maximum 49 years, within the framework of main standards that will be set and preliminary projects provided by the Ministry of Health.
  • 2nd PPP in Turkey forum

    1. 1. PPP in Turkey Forum November 28, 2013 Mehmet Şimşek Minister of Finance 1
    2. 2. Outline PPP in Turkey Turkey’s Long Term Prospects 2
    3. 3. PPP Applications in Turkey 3
    4. 4. Why PPP? Budgetary resources are limited Investment needs are vast Private sector creativity & dynamism is needed 4
    5. 5. Even though, Fiscally it is Less of a Challenge 120 6.5 6 110 5.5 100 5 90 4.5 4 80 3.5 70 60 3 Maastricht Criteria Maastricht Criteria 2.5 2 50 1.5 40 35 1 30 1 0.5 Debt-to-GDP (%, 2013) Turkey Euro US OECD Budget Deficit-to-GDP (%, 2013) Turkey Euro OECD US 5
    6. 6. PPP Applications in Turkey Build-Operate-Transfer Transfer of Operating Rights • Energy • Airport • Port • Energy (HEPP) • Highway • Bridge • Port Build-Operate • Energy Build-Lease-Transfer • Healthcare 6
    7. 7. PPP Applications in Turkey 30 26.6 Total Investment Value (Billion $*) 25 20 15 10 8.5 5 0 1986-2002 Excluding Transfer of Operating Right Agreements * 2013 prices 2003-12 7
    8. 8. Key Sectors Energy Transportation Healthcare Education 8
    9. 9. Energy 9
    10. 10. High Dependence on Energy Imports 72% Total Energy 92% 98% Oil Natural-Gas 10
    11. 11. Energy Import Bill 120 60 100 60.1 50 56.9 80 40 60 30 40 20 (Brent, $ pbl) Energy Imports (Bn $) 70 20 10 9.2 Energy Import 2013 Sep 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 0 2002 0 Oil Prices Source: TURKSTAT, Bloomberg 11
    12. 12. 2002-1 4 7 10 2003-1 4 7 10 2004-1 4 7 10 2005-1 4 7 10 2006-1 4 7 10 2007-1 4 7 10 2008-1 4 7 10 2009-1 4 7 10 2010-1 4 7 10 2011-1 4 7 10 2012-1 4 7 10 2013-1 4 7 (12 Month Rolling, USD bn) Current Account Deficit 40 20 0 -20 -40 -60 -80 Current Account Current Account without Energy Import Source: Central Bank of Turkey 12
    13. 13. PPP in Energy Sector Projects signed amounted $13.2 billion during 2003-12. Thermal Power Plants Hydro-Electric Power Plants Electricity Distribution Companies 13
    14. 14. PPP in Electricity Generation PPP for Planned Electricity Generation Facilities • 27,250 MW • $50 Billion Project Afşin-Elbistan (Lignite) Konya- Karapınar (Lignite) Thrace (Lignite) Kahramanmaraş-Elbistan (Lignite) Nuclear (Sinop+Other) Total Approximate Capacity (MW) 8,000 6,000 2,000 1,250 10,000 27,250 14
    15. 15. Building Nuclear Capacity Akkuyu: with Russia Sinop with a Japanese-French consortium Working on a 3rd plant 15
    16. 16. Privatization: Electricity Distribution • Distributions: Done 16
    17. 17. Privatization: Generation Assets Sold Hamitabat Termal Power Plant Seyitömer Termal Power Plant Kangal Termal Power Plant 17
    18. 18. Privatization: Generation Assets Portfolio On Sale: 1,500 MW Yeniköy Kemerköy Yatağan Çatalağzı Coming on Board soon 16,530MW 18
    19. 19. Transportation 19
    20. 20. Turkey: Investment in Transportation 2003-12: $75 billion 2013-23: $350 billion Intensity of highway, motorway and railway networks in Turkey is about 1/5th of that in EU 20
    21. 21. Dual Carriageway Network (January 1, 2003) 1,714 Km Total of Motorways 4,387 Km Total of State and Provincial Dual Carriageways Total: 6,101 Km Dual Carriageway Network (November 1, 2013) 2,244 Km Total of Motorways 20,601 Km Total of State and Provincial Dual Carriageways Total: 22,845 Km 21
    22. 22. Construction of Dual Carriageways Target for 2015 26,500 km Target for 2019 31,000 km Target for 2023 36,500 km 22
    23. 23. High Speed Railway Projects EDİRNE ZONGULDAK SAMSUN İSTANBUL TEKİRDAĞ AMASYA ÇANKIRI İZMİT Bandırma KARS KARABÜK 105 km BURSA ERZURUM BİLECİK 533 km Yenişehir ANKARA ERZİNCAN KIRIKKALE SİVAS ESKİŞEHİR BALIKESİR 405 km Yerköy Polatlı MUŞ AFYONKARHİSAR İZMİR MANİSA ELAZIĞ 212 km UŞAK VAN KAYSERİ MALATYA NİĞDE 624 km KONYA ISPARTA DENİZLİ BATMAN MARDİN BURDUR OSMANİYE Completed (888 km) Under Construction (1796 km) Bidding Phase (454 km) Project Phase (354 km) DİYARBAKIR K.MARAŞ AYDIN GAZİANTEP KARAMAN MERSİN ADANA Çobanbey 23
    24. 24. Targets for Construction of Railways By 2023 $ 45 billion worth of investment 10,000 km worth of new high speed railway network 4,000 km of new conventional line 2023-35 1,480 km of high speed railway lines 956 km of conventional line 24
    25. 25. PPP in Aviation • Number of Contracted Projects = 17 • 11 BOT projects • 6 transfer of operating rights • Total Investment Value = $15.0 billion • Total ToR value = $28.9 billion Zafer Airport Antalya Airport International Terminal Adnan Menderes Airport International Terminal Çukurova Airport 25
    26. 26. Active Airports in Turkey • The number of airports serving 2003 scheduled flights = 26 • The number of airports serving 2013 scheduled flights = 52 Airports serving Scheduled Flights (52) Airports under Construction (3) Airports Planned (1) 26
    27. 27. The 3rd Airport in Istanbul, Largest of All 150 million passengers An area of 90 million m2 Construction Cost: €10 billion Rent (25 Years): €22.2 billion 27
    28. 28. Projects of the Century - Completed Marmaray 28
    29. 29. Projects of the Century - Under Construction 3rd Bridge Tube Tunnel Izmit Gulf Transit Istanbul-İzmir Highway High-Speed Train through Ankara-Bursa-Istanbul 29
    30. 30. Projects of the Century – Planned Channel Istanbul 30
    31. 31. PPP in Ports Projects under Construction Dalaman Marina Datça Marina Gazipaşa Marina Muğla-Ören Marina Kumkuyu Marina Karasu Port Project 31
    32. 32. Healthcare 32
    33. 33. Healthcare Expenditures Source: The Ministry of Finance 33
    34. 34. Healthcare: Targets Increase the number of healthcare facilities Enhance the quality of the healthcare services Apply state-of-the-art technologies in the hospital management 34
    35. 35. Healthcare Indicators Source: The Ministry of Health 35
    36. 36. Healthcare Indicators Source: TURKSTAT 36
    37. 37. Increasing Life Expectancy Source: TURKSTAT, Ministry of Health 37
    38. 38. PPP in Healthcare Sector Contracted Projects Kayseri Integrated Health Campus Ankara Etlik Integrated Health Campus Ankara Bilkent Integrated Health Campus İkitelli Integrated Health Campus Elazığ Integrated Health Campus Projects worth $3.8 billion Projects Awarded Manisa Training and Research Hospital 38
    39. 39. PPP in Healthcare Sector Projects at the Tender Stage • • • • • • • • • • • • Bursa Integrated Health Campus Konya Karatay Integrated Health Campus Mersin Integrated Health Campus Yozgat Training and Research Hospital Adana Integrated Health Campus Physical Therapy and Rehabilitation, Psychiatry and High-Security Forensic Psychiatry Hospitals Gaziantep Integrated Health Campus Isparta City Hospital İzmir Bayraklı Integrated Health Campus Kocaeli Integrated Health Campus Eskişehir Integrated Health Campus Campus of Turkish Public Health Agency & Turkish Pharmaceuticals and Medical Devices Agency 39
    40. 40. PPP in Healthcare Sector Projects Planned • İstanbul Bakırköy Integrated Health Campus • İstanbul Üsküdar State Hospital • Samsun Integrated Health Campus • Denizli City Hospital • Şanlıurfa City Hospital • İzmir Yenişehir City Hospital • Tekirdağ State-Owned Hospital 40
    41. 41. Education 41
    42. 42. Education: Targets Improving access to and quality of education Having mandatory pre-school education FATiH: Furnishing each school with smart boards Reducing number of students per classroom below 30 Increasing the number of private universities 42
    43. 43. Education Budget 68.1 70 Billion TL 60 50 40 30 20 11.3 10 2002 Source: Ministry of Finance 2013 43
    44. 44. Share of Education Budget 18 17 16 % 14 12 10 9.4 8 2002 Source: Ministry of Finance 2013 44
    45. 45. (Gross Rates) Enhancing Human Capital Stock: Schooling Rates Source: Ministry of Development 45
    46. 46. Enhancing Human Capital Stock: PISA Results, Gap b/w Turkey & OECD 80 70 60 50 40 30 science math 2006 2009 Source: OECD 46
    47. 47. Build-Lease-Transfer Model in Education 40,000 additional classrooms by end-2016. 42 education campuses in 22 cities 47
    48. 48. Strong Long-Term Prospects 48
    49. 49. Determinants of Long-Term Growth Quality of Institutions Demographics Productivity 49
    50. 50. Improving Quality of Institutions Corruption perception: 2012: 54th in 176 2002: 65th in 102 Ease of Doing Business: 2013-14: 69th in 189 2006: 84th in 175 Global competitiveness: 2013: 44th in 148 2005: 71st in 117 50
    51. 51. Priorities & Reform Areas Enhancing Democratic Standards Combatting Shadow Economy Improving Access to & Quality of Education Investing in Local & Renewable Energy Deepening Capital Markets Moving up the Value-Chain Narrowing Regional Development Gaps Improving Infrastructure Increasing Labor Market Flexibility 51
    52. 52. Share of 15-24 years old in Total Pop. (%) Favorable Demographics Azerbaijan Moldova Turkey Georgia Macedonia Iceland Lithuania Montenegro Slovakia Latvia Poland Malta Ukraine Estonia Sweden Norway United Kingdom Denmark France Finland Netherlands Hungary Serbia Liechtenstein Austria Czech Republic Croatia Switzerland Luxembourg Bulgaria Ireland Slovenia Germany Portugal Spain Greece Italy Andorra 16.8 7 Source: Eurostat 9 11 13 15 17 19 21 52
    53. 53. Annual Average Growth Rate (%, 2001-11) Growth Rate of Working-Age Population 2.0 2.0 1.8 1.6 1.4 1.2 1.0 1.0 0.8 0.7 0.6 0.3 0.4 0.2 0.0 Turkey Source: OECD, Eurostat, TURKSTAT USA OECD EU-27 53
    54. 54. GDP 2050 $ 5 trillion 2002 2023 $ 2 trillion 2002 $ 230 billion 2012 $ 786 billion Source: TURKSTAT, Medium-Term Program,PwC 2050 54
    55. 55. GDP per Capita 2002 2050 $ 50,000 2023 $ 25,000 2012 $10,497 2002 $ 3,492 2050 Source: TURKSTAT, Medium-Term Program,PwC 55
    56. 56. THANK YOU… 56

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