The disorganized state of regulations governing the
public-private partnership (the "PPP")
model in Turkey and certain shortcomings of the main law regulating
the BOT projects, Law No. 3996 on Realization of Certain
Investments and Services under the Build-Operate-Transfer Model
(the "BOT Law"), has given rise to the
need for addressing models of such cooperation between public and
private sectors by means of a framework law. Thus, the Prime
Ministry's State Planning Organization (the
"SPO") has prepared a Draft Law on
Realization of Certain Investments and Services through
Public-Private Party Cooperation Models (the "Draft
PPP Law") and submitted it to the relevant public
entities for their review. Following the comments rendered by the
relevant public entities, the SPO is now ready to submit the Draft
PPP Law to the Parliament for its review and enactment.
The enactment of the Draft PPP Law will revoke the applicability
of the previous laws in this area, which are the BOT Law, Law No.
3096 on Authorization of Entities other than the Turkish
Electricity Administration for the Generation, Transmission and
Distribution of Electricity ("Law No.
3096"), Law No. 3465 on the Construction, Maintenance
and Operation of the Access-Restricted Highways by Entities Other
than the General Directorate of Highways ("Law No.
3465"), Law No. 4283 on Construction and Operation of
Electrical Energy Generation Facilities under the Build-Operate
Model and Regulation of Energy Sales ("Law No.
4283"), Law No. 5396 on Supplementing One Additional
Article to the Basic Law on Health Services and Article 33 of the
Law No. 5335 on Amendments to be made to Certain Laws and Decrees
With the Force of Law. Besides, the Draft PPP Law deletes the term
"transfer of operation rights" stated under Article
18(1)(a)(c), Article 2(1)(h), Article 7, Article 3(2)(c) and
3(2)(d) of Law No. 4046 on Privatization Implementations.
In its official Statement of Reasoning, the Draft PPP Law
reiterates the European Commission's understanding, attributing
four fundamental roles to the PPPs: (i) providing additional
capital; (ii) developing alternative management and application
skills; (iii) providing superior value to consumers and society;
and (iv) determining needs accurately and using resources
efficiently. The Draft PPP Law will, if enacted in its present
form, introduce various innovative concepts and regulations, such
as defining the PPP concept, creating uniformity in PPP
legislation, determining the PPP models, increasing the number of
sectors subject to the PPP model, defining objective criteria
governing the PPP process, establishing a central unit responsible
for PPP projects, regulating the "risk" concept and
guarantees in PPP projects. Among these, the key innovation of the
Draft PPP Law is the recognition of "risk" and the
"efficient risk sharing" concepts, which are being
regulated so clearly for the first time.
The BOT Law, which is expected to be replaced with the Draft PPP
Law, has undergone a number of cancellations and amendments since
its enactment on 8 June 1994. When first enacted, Article 5 of the
BOT Law held that BOT projects would be subject to private law
provisions and would not be deemed concession contracts. However,
such article was cancelled by a Constitutional Court Decision, in
19951; thus, such projects became subject to
administrative law provisions. Following this Constitutional Court
decision, a new provision was added to the Constitution in order to
legalize the realization of public services by private parties
through private law contracts. Ultimately, Article 5 of the BOT Law
was redrafted in order to regulate the BOT contracts under private
law provisions. Similarly, pursuant to the Draft PPP Law, projects
in all PPP models shall be subject to private law provisions.
The ultimate purpose of the Draft PPP Law, which will be the
exclusive law applied to the PPP projects, is to unify and
standardize the existing regulations with regard to the PPP
projects. Thus, upon enactment of the Draft PPP Law, it is hoped
that there will be an end to confusion about which regulation
applies to which project and which government entity will
coordinate the implementation and success of the PPP model.
1. The Constitutional Court decision dated 28 June 1995,
and numbered 1995/23K.
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