Turkey: Port Operation in Turkey: An Overview of Applicable Legislation

Over the last decade, the operation of port facilities has been among the top investment opportunities in Turkey, attracting the attention of both local and foreign investors. This comes as no surprise given the country's long coastlines covering major international transportation routes. Sixteen ports have been privatized by the State in the past seventeen years, and privatization transactions concerning some ports (e.g. İskenderun, Bandırma and Samsun) have also been accompanied by transfer operations among private parties (e.g. Antalya port has been the subject of private commercial transactional activity since its privatization in 1998).

Transfer operations involving the ports of Turkey exhibit certain qualities that differentiate them transactionally from ordinary share or asset transfer deals. This is due mainly to the fact that the core of these transactions has dealt with the transfer of rights related to the land upon which the port facilities were constructed, as well as the transfer of licenses specific to operating a port in Turkey. These qualities stem from the fact that Turkey's coastal areas are either state-owned or subject to the state's right of disposal by virtue of the Turkish Constitution. Acquiring entities holding port operation rights cannot thus enjoy ownership rights with respect to the port itself, and can only benefit from servitude or utilization rights over the land subject to conditions that are, to a great extent, pre-defined in the applicable legislation.

The following is a summary of the transfer regime applicable to the rights and licenses that are required for the operation of a port business in Turkey.

Transfer of Licenses Specific to a Port Business

Main Licenses

Under the port legislation, in order to operate a port in Turkey, an entity should either carry a permanent or a temporary port operation license.1 Temporary port operation licenses are granted for a period of six to twelve months to cover the period until the finalization of the port construction. Both licenses are transferrable to third parties, provided that the rights related to the land on which the port facilities are located are also transferred to the party acquiring the operation license. The Maritime Undersecretariat must be notified of any transfer involving the port operation license or the temporary port operation license within one month from finalization of the related transfer.

Ancillary Licenses

Apart from the main licenses, there are certain ancillary licenses that may be required in connection with a port business in Turkey depending on the nature of the activities to be carried out in the port facility. For example, security certificates must be obtained if services will be provided to specific types of vessels in the facility (e.g. vessels carrying cargo weighing 500 gross tons or more). Transfer of the related port business will require reissuance of the security certificate in favour of the acquiring party. If the entities are willing to operate a bonded warehouse in the related facility, this will require acquisition of a bonded warehouse certificate from the Undersecretariat of Customs. Such certificate may be transferred to third parties provided that the approval of the Undersecretariat of Customs is obtained. On the other hand, pilotage and tugging business permits that must be obtained in order to provide piloting and tugging services cannot be transferred to another entity, and no entity with a foreign shareholder may apply for such a permit.

Transfer of Rights to Land on Which Port Facilities Are Constructed

Rights related to coastal land

Since coastal land in Turkey is subject to either ownership or disposal rights of the state, private entities cannot acquire ownership of the related land, but may only benefit from either servitude2 or usage rights over it.3 Such rights may be transferred to third parties as part of a transaction involving the transfer of the related port business, provided that the Ministry of Finance's approval for such transfer is secured. It is noteworthy that even if the entity holding the related rights remains the same, any transaction concerning the transfer of 50% or more of the shares of the related entity will require the approval of the Ministry of Finance. Although the servitude and usage rights may be transferred to third parties subject to ministerial approval, such transfer will still require the acquiring party to execute a new deed, and the Ministry of Finance may impose new conditions distinct from those set forth in the original deed.

Rights related to forestry

According to the Forestry Law, entities are entitled to benefit from forestry for the establishment of facilities providing, among others, transportation services. Use of the forestland requires the issuance of a preliminary forestry permit that will be granted for a term of two years, and which must be replaced with a forestry permit before its term expires. Such permits are granted by the Ministry of the Environment and Forestry. The forestry permit may be transferred to third parties with the approval of the Ministry of Environment and Forestry, and the acquiring party must execute a letter of undertaking in that respect. However, the preliminary forestry permit cannot be transferred.

Expected Transactions

According to the news, the State plans to make additional investments in some of the ports for which the privatization process could not be finalized. An additional investment of $300 million will be devoted to İzmir Port, which was acquired by neither of the two second-highest bidders in the tender launched in summer 2007. Finalization of most of the investments is planned in March 2011 increasing the yearly cargo capacity of the port to 2.5 million TEU. Based on the statements of Transportation Minister Binali Yıldırım, a new tender will be launched for the privatization of İzmir Port, although the exact date has not been announced. It is hoped that the second privatization process for İzmir Port will share the same destiny as İskenderun Port, the acquisition of which by the highest bidder could not be finalized as a result of the tender launched in 2005 due to the court order. However, in the second tender launched in September 2010, the port has attracted a bid four times higher than the highest bid made in the first tender.

Footnotes

1. The requirements to obtain a port operation license as well as the related procedures are set forth in the Regulation on the Procedures for Granting Operation Licenses for Coastal Facilities, published in the Official Gazette dated 18 February 2007 and numbered 26438.

2. The state may grant servitude rights regarding the land subject to the state's ownership right, whereas utilization rights may be granted over the land subject to the disposal right of the state.

3. The issuance of the related rights as well as the applicable transfer procedures are regulated under the Regulation on the Utilization of Immovable Property Owned by the Treasury and Communiqué No. 324 issued by the General Directorate of National Real Estate of the Ministry of Finance.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Hergüner Bilgen Özeke
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
Accounting and Audit
Anti-trust/Competition Law
Consumer Protection
Corporate/Commercial Law
Criminal Law
Employment and HR
Energy and Natural Resources
Environment
Family and Matrimonial
Finance and Banking
Food, Drugs, Healthcare, Life Sciences
Government, Public Sector
Immigration
Insolvency/Bankruptcy, Re-structuring
Insurance
Intellectual Property
International Law
Law Practice Management
Litigation, Mediation & Arbitration
Media, Telecoms, IT, Entertainment
Privacy
Real Estate and Construction
Strategy
Tax
Transport
Wealth Management
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.