The recent history of public tenders governed by the State
Tender Law has witnessed controversial developments in Turkey.
This resulted in the enactment of a new system in 2002 that
initiated a highly restrictive and cumbersome set of rules
under the Public Tender Law and related regulations.
Unfortunately, the new mandate merely covered the area of
public tenders for purchase of goods and services by public
institutions from real estate contractors and service
providers. Consequently, the old regime established under the
State Tender Law remained in force with respect to the sales,
barter and leasing of the real property owned by the Treasury
or under the control of the State, and for the establishment of
easement rights on public properties (collectively the
In 2007, the Ministry of Finance enacted the more
comprehensive "Regulation on Operation of Real Property
Owned by the Treasury" (the "New Regulation") to
set forth the rules and procedures applicable to Tenders. The
New Regulation details the procedure to be followed for the
Tenders and provides three methods for tenders: (i) by closed
bid, as the principle method, where the bidders serve their
offers in sealed envelopes; (ii) by open bid, which enables
bidders to make their offers verbally; and (iii) through
negotiation, which is the most flexible method whereby the
bidders are allowed to bid in writing or verbally, depending on
the preference of the public authorities.
The establishment of easement rights and barter transactions
will be accomplished through negotiation, while the sales and
leasing of real property must be effectuated under the closed
or open bid procedures depending on the estimated value of the
properties. The duration of leases may not exceed 10 years, and
authorization by the Ministry of Finance is required for leases
which exceed 3 years in duration. The successful bidders and
their sub-lessees will also pay a yearly amount over the income
and the rental. Alternatively, bidders may benefit from an
easement right for up to 49 years under the New Regulation.
Despite this relatively long term, beneficiaries of easement
rights may not establish mortgages on the public
The New Regulation also sets forth new rules for the
granting of easement rights on the on-shore facilities such as
naval docks, harbors, sea ports, and wharfs for a period up to
49 years, provided that they comply with the Coastal Law and
related regulations, and that all requisite permissions are
Following the delivery of an amount equal to 6% of the
tender price, the successful bidder enters into a contract with
the administration. The provisions of this contract must comply
with the particular sample contract annexed to the Regulation,
corresponding to each estate granted. The duty of care is
two-fold at the stage of contracting with the administration:
any harm to public interest would create a risk of cancellation
of the contract by the administrative courts, and future
non-compliance with the provisions of the agreement would
result in the revocation of contractual rights by the
The New Regulation enables installment sales for the leasing
of large, valuable tracts of agricultural lands by negotiation,
as well as other positive and progressive legal features. The
New Regulation also provides a clear procedure regarding
eviction and for the resolution of unlawful occupation of
The innovative approach of the New Regulation seems to have
achieved its goals in terms of expediting and simplifying
Tenders. Nonetheless, the struggle between centralization and
liberalization of public tenders appears not to have been put
to rest, and the effect of this new legislative repast has yet
to be digested by the public.
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.
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