Procuring Infrastructure Public-Private Partnerships

Article 47 of the Turkish constitution allows the use of public-private partnerships, but the Turkish legislation does not have one single framework law and/or regulation concerning PPPs. (Note: there is a draft act on PPP but not enacted yet). In the current situation, there are different types of PPPs and therefore there are more than one regulatory framework that allows procuring PPPs. The most commonly referred ones are: a. Build-Operate-Transfer Model(BOT): enacted for different infrastructure areas like transportation, energy and water supply and treatment: Act No. 3996 on Certain Infrastructure and Public Investments and Services with BOT Model adopted in 1996. (Published in Official Gazette No. 21959 dated 13 June 1994) [and its New Implementation Decree of 2011]. b. Build-Operate (BO) is regulating the BO Model in the electricity generation sector: Law on Building and Operation of Thermal Power Plants with the BO Model adopted in 1997 ("Law No 4283") (Published in the Official Gazette numbered 23054 dated 19 July 1997). Finally, the Public Procurement Law No 4734 is also applicable to PPPs, and we refer to it in our analysis.

(1) All the regulatory framework and Decrees can be accessed through "http://www.mevzuat.gov.tr/", "www.resmigazete.gov.tr" , and "www.basbakanlik.gov.tr"

(2) The accession links for specific legislations are below:
a. BOT: http://www.cakmak.av.tr/articles/Construction_Infrustructure/The%20New%20Implementation%20Decree%20of%20the%20Build-Operate-Transfer%20Law.pdf; http://www.mevzuat.gov.tr/MevzuatMetin/1.5.3996.pdf and http://mevzuat.basbakanlik.gov.tr/Metin1.Aspx?MevzuatKod=1.5.3996&MevzuatIliski=0&sourceXmlSearch=&Tur=1&Tertip=5&No=3996 (Law No. 3996) [and for the new implementation decree: http://www.cakmak.av.tr/articles/Construction_Infrustructure/The%20New%20Implementation%20Decree%20of%20the%20Build-Operate-Transfer%20Law.pdf]
http://www.mevzuat.gov.tr/MevzuatMetin/1.5.3465.pdf (Law No. 3465)
http://www.resmigazete.gov.tr/eskiler/2011/06/20110611M1-11-1.pdf: Decree of the Council of Ministers Regarding the Principals and Procedures of Realization of Certain Projects under the Build-Operate-Transfer Model was published in the Official Gazette dated 11 June 2011
b. BO: http://www.mevzuat.gov.tr/MevzuatMetin/1.5.4283.pdf (Law No. 4283)
c. BLT: Law No 6428:
http://www.mevzuat.gov.tr/Metin1.Aspx?MevzuatKod=1.5.6428&MevzuatIliski=0&sourceXmlSearch=&Tur=1&Tertip=5&No=6428
d. TOR: Law No. 4046:
http://www.mevzuat.gov.tr/Metin1.Aspx?MevzuatKod=1.5.4046&MevzuatIliski=0&sourceXmlSearch=&Tur=1&Tertip=5&No=4046


(3) Alternatively, a compilation of up to date PPP legislations in effect (including the rarely used and rarely referred ones) can be accessed in the Ministry of Development's publication: (in Turkish)
http://www.kalkinma.gov.tr/Documents/Kamu%20%C3%96zel%20%C4%B0%C5%9Fbirli%C4%9Fi%20Mevzuat%C4%B1-2015.pdf

(4) Public Procurement Law No. 4734: http://www2.ihale.gov.tr/english/4734_English.pdf

There is a Governmental Proposition Draft with regard to "Realization of Investments and Services Within the Framework of Private and Public Partnership Models". This PPP Draft would regulate a great variety of PPP models, and it would also introduce a new approach in project selection and a new governmental body responsible for PPP projects. According to Article 31 of this Draft, it will be in effect after six months as of its publication in the Official Gazette. However, the publication date of this governmental proposition draft has not been announced yet (Note: this article may be amended in the future as this draft has not been enacted yet).

According to Article 12 of law n.3996 - All works and transactions to be carried out by the administration, the capital company or the foreign company within the scope of the issues specified in the 2nd item and the build-operate-transfer model shall be made according to the stamp tax taken in accordance with the Law No. 488 dated 1.7.1964 and the Law No. 492 dated 2.7.1964 exempt from fees received.

Also, Act no. 3065, provisional article 29: Project deliveries to be carried out within the framework of the BOT Law numbered 3996 and BLT Law numbered 6428 have been excluded from VAT for the goods delivered and services rendered under the project during the investment period.

Finally, we note that, although the health sector is not included in the scope of our analysis, Law no 6428, article 9 provides for exemption from stamp tax received in accordance with the law no. 488 and charges received in accordance with the law no. 492.

The PPP procuring authority will depend on the sector of investment. (Note: the sectors are widely listed under Law number 3996 and each administrative authority responsible to provide services under such sector will be the PPP procuring authority); provided that the PPP project is duly approved in accordance with Law number 3996, and the other PPP legislation indicated above. (1) In the event of a tunnel project, the General Directorate of Infrastructure Investments which is subordinated to the Ministry of Transportation, Maritime and Communication will be the PPP procuring authority. http://www.dlh.gov.tr/ (2) In the event of a health facility, the General Directorate of Health Investments which is subordinated to the Ministry of Health will be the PPP procuring authority. http://www.saglikyatirimlari.gov.tr/ (3) Ministry of Transport, Maritime Affairs and Communication - General Directorate of State Airports Authority in case of airports. www.dhmi.gov.tr and www.udhb.gov.tr (4) In the event of a bridge/highway project, the General Directorate of Highways will be the procuring authority www.kgm.gov.tr (5) For Transfer of Operation Rights, except the airports, Republic of Turkey Privatization Administration - http://www.oib.gov.tr/ (6) Ministry of Education, www.meb.gov.tyr (7) Higher Education Credit and Hostels Institution, www.yurtkur.gsb.gov.tr (8) Information and Communication Technologies Authority ("ICTA")- www.btk.gov.tr (9) Municipalities via Ministry of Interior http://www.icisleri.gov.tr (10) Ministry of Environment and Urbanization http://www.csb.gov.tr/turkce/index.php (11) Ministry of Customs and Trade http://www.gtb.gov.tr

Turkey's PPP unit is based in the Ministry of Development (MoD). Its official name is "Department of PPP" located under the General Directorate of Investment Programming, Monitoring and Assessment. (http://www.kalkinma.gov.tr/Pages/KamuOzelIsbirligiProjelerindeGelismeler.aspx)
Other entities facilitating the PPP program in coordination with this unit are: (1) Ministry of Finance (https://www.maliye.gov.tr/Sayfalar/Eng/AnaSayfa.aspx)ad (2) Under secretariat of Treasury (http://www.treasury.gov.tr/en-US/Mainpage);

Article 13 of the Decree on Organization and Duties of Ministry of Development (http://www.mevzuat.gov.tr/MevzuatMetin/4.5.641.pdf) provides: (1) The duties of the General Directorate of Investment Programming, Monitoring and Evaluation are as follows:
A) Public investment policies within the framework of the priorities identified under development plans and programs. To analyze and research investments, to develop project ideas to be implemented by public institutions. To provide support, to analyze projects and to prepare, monitor and evaluate the public investment program,
B) to develop appropriate financing models in the realization of public investments, to implement public-private partnership projects, and analyzing the principles and procedures of project planning and monitoring and evaluation activities of public institutions and organizations, as well as to support capacity building in these areas.
C) To perform similar duties assigned by the Minister.

As per article 4 of the Act no. 3996, approval is sought from the High Planning Commission (HPC) within the Ministry of Development (MoD). Article 2 of the Act no. 6428 also refers to the approval of the HPC with regards to the health PPP projects. Tender process is initiated following the decision of the HPC. The HPC comprises of ministers to be determined by the Prime Minister and under the supervision of the Prime Minister. The approval process, during which a feasibility report and other documents are submitted for review, is executed by the MoD. After necessary review is concluded, it is submitted to the HPC for approval. As per article 5 of Decree number 2011/1807, the HPC, while making its decision on the approval, may request the opinion of the Ministry of Finance, Ministry of Development and Under secretariat of Treasury and other related authorities in case deemed necessary.

According to the Article 49 of the Public Finance Management and Control Law, it is stated that accounting standards which apply to the public administrations, shall be in line with international standards. In relation to this Article, General Management Accounting Regulation has been enacted by the Governmental Accounting Standards Board. Its provisional Article 1 has regulated the inventory procedures of the PPPs and has authorized the Ministry to regulate the procedures and principles related to PPP's inventories. In the Article 13(2) of the Public Private Partnership Applications' Accounting Transactions General Communique, it is stated that Public Private Partnership Projects Notification Form shall be filled in and sent to the accounting units. General Directorate of Accounting under the Ministry of Finance published its announcement No.28165485-010,05-7968 (Communiqué N. 29410 on Accounting Transactions of Public Private Partnership Practices), dated 18 August 2015 with the subject of tracing the PPP investments under governmental inventory system.

According to Article 49 of the Law on Public Financial Management and Control numbered 5018, all public authorities shall use internationally accepted standards of accounting.

(1) Pursuant to Article 5 of Regulation for Law 3996: Each procuring authority must submit its PPP project to the HPC through its relevant ministry. I.e. Highway agency through Ministry of Transport. Likewise, local authorities should submit PPP project proposals to HPC through Ministry of Interior and universities and higher education institutes through Ministry of Education. This step is more like a coordination point rather than a stage of approval. Process for BOT projects to be implemented under Law 3996 and BLT projects under Law 6428: Implementing agencies and local authorities, intending to implement PPP projects should seek for the approval of High Planning Council (which is the ultimate decision body for key economic issues including PPPs) , comprised of Ministers in charge of different parts of economy who are supervised by the Prime Minister. PPP projects are then evaluated by the Ministry of Development (MoD), the Ministry of Finance (MoF) and the Treasury. Acting as the secretariat of HPC, the MoD organizes and coordinates all the technical works for HPC to make a decision. A formal approval process starts with submission of feasibility reports, technical analysis and other documents concerned by the implementing agency. MoD evaluates the project with a view to ensuring that the project is economically, financially and socially value-adding, and in line with sectoral, regional and other policies. MoD also consolidates reviews from Treasury and MoF. Based on the analysis carried out by MoD and supported by Treasury and MoF, MoD prepares a comprehensive review and submits to HPC, which then approves the project to be included in the pipeline. (Note: If MoD finds the technical preparations insufficient, MoD may ask for revisions/additions/changes). (2) Pursuant to Article 3 of Law No. 4046: In the case of Transfer of Operating Rights, implementing agencies should obtain the approval of High Council of Privatization. (3) Pursuant to Article 12 of the Regulation for Law 3465: For the implementation of BOT road projects under Law 3465 (which is outdated and not used in practice), the approval authority is General Directorate of the Highways. (4) Pursuant to Article 7 of Decree of Cabinet of Ministers (No: 2012/3682) for Law 652: For BLT projects in schools and education facilities, the approval authority is the Ministry of National Education.

(1) (i) Pursuant to Article 5 of Decree number 2011/1807, the High Planning Committee which is the approving authority under the Law Numbered 3996, may request the opinion of the Ministry of Finance, Ministry of Development and Under secretariat of Treasury and other related authority (ii) Article 4 of Law 3996 provides that the administration wishing to procure PPP is required to submit its preliminary project to High Planning Committee without the approval of which, the administration cannot procure PPP. (iii) Article 2 of Law 6428 provides for the same approval requirement from HPC regarding PPPs submitted by the Ministry of Health or other subordinated institutions. (2) Article 3 of Law No. 4046 (3) Article 12 of the Regulation for Law 3465 (4) Article 7 of Decree of Cabinet of Ministers (No: 2012/3682) for Law 652

Pursuant to Article 12 of the Regulation for Law 3996: In the projects to be carried out by the build-operate-transfer model, the consultancy services can be procured during construction and operation periods.

Turkey has strategic documents that define the framework of the priority investment areas and projects which are 5-year Development Plans, 3-Year revolving Medium Term Programs and Annual Programs. PPP projects are chosen within this priority framework and thus from the public investment pipeline.
10th Development Plan, Action 589: In public investments including PPP model, education, health, drinking water and sewerage, science-technology, transportation and irrigation sectors will be given priority.

In practice, the procuring authority generally evaluates the consistency of PPPs with other government investment priorities in Turkey

Article 4 of Law 3996 (BOT) provides that investments and services provided under the BOT model will require a cost-benefit analysis of the socio-economic impact of the PPP project.

According to our contributors, a socio-economic assessment is always done in practice when identifying and preparing a PPP project in Turkey

(1) Article 4 of Law number 3996 provides for an affordability assessment (including the identification of the long term public commitments). in fact, this article states that a study should be conducted about the scope of the contract and the investment result in order to determine the cost of goods and services, taking in consideration other principles of Finance, Public Works, Transport, Energy and Natural Resources ... and (2) Article 7 of Law number 3996 provides that the duration of the project (that cannot exceed 49 years) needs to be determined in order to undertake the construction and operation investment cost, as well as the projected profits, the loans to be taken and the repayment period (taking in consideration the amount of capital available and the operating principles). (3) Article 2 of Law 6428 (BLT for health projects) also requires this analysis.

The affordability assessment, including the identification of the required long term public commitments are always done in practice

Article 2 of the New Implementation Decree of BOT Law number 3996 providing that the High Planning Council shall determine at the beginning of the project the contribution fees and demand guarantees , if any, and the risk sharing principles.

A comparative assessment to evaluate whether a PPP is the best option when compared to other procurement alternatives is done in practice when identifying and preparing a PPP in Turkey

Article 4 of Law number 3996 provides for financial viability assessment. Article 2 of Law 6428 (BLT for health projects) also requires this analysis.

Article 6(3) of the Environmental Impact Assessment (EIA) Regulation states that a project cannot be tendered before the tender environmental impact assessment is obtained. Additionally, Article 7 provides for the preparation of an EIA report for the projects which enters into the scope application of the regulation. and finally, Articles 8, 9, 10, 11, 12, 13 and 14 set forth the methodology of the preparation of report is regulated

Articles 8, 9, 10, 11, 12, 13 and 14 of the Environmental Impact Assessment (EIA) Regulation set forth the methodology of the preparation of report is regulated

According to Article 6 of the Decree for Law no 3996, tender announcements are published in the Official Gazette that is published online.

http://www.resmigazete.gov.tr/default.aspx
and on the websites of the relevant procuring authority launching the call for tender

Article 18 of the Decree for Law no 3996 sets forth that (j) that the contract shall include the permits required by the legal legislation.

Article 18 of the Decree for Law no 3996 sets forth that (j) that the contract shall include the permits required by the legal legislation.

Article 18 of the Decree for Law no 3996 sets forth that (j) that the contract shall include the permits required by the legal legislation.

According to ARTICLE 39 of Law 3996- (1) The expropriation proceedings required for the investments and services proposed in its opinion shall be filed by the administration…"

Article 23 of the PPP Regulations (2014/6282) states that the commission should consist of one chairman, two experts depending on the subject, one accountant and one expert for the financial issue. Furthermore, relating to our case study, article 16 of the Regulation of Highways (No. 21552) provides that the committee consists of 5 permanent members and 5 reserve members who have expertise in the subjects handled.

Additionally, General BOT Law (N. 3996) Articles 10 and 11 state that the qualification of the committee members shall be regulated by the procuring authority.
ARTICLE 10- (1) The procuring authority is free to make ten qualification assessments. A ten competency commission shall be established if the procuring authority who will also set the features of such Commission as well as the working procedures and requirements of the tender.
ARTICLE 11- (1) The commissioning committee of the senior manager of the mentor who will perform the forecasting shall be appointed. Administrative and technical staff can be assigned to assist the Commission, not to participate in the decision of clerking.
(2) The commission and the working procedures are regulated by the procuring authority.

Article 25 of Regulation No. 2014/6282 regarding the open tender procurement, notice should be issued at least one month prior to last application date of bid. For the negotiated tender this period is only one week . Furthermore As per Article 6 of the BOT Decree, projects to be carried out under the BOT Law must be announced in the Official Gazette of the Republic of Turkey and in a minimum number of two nationwide newspapers with high circulation, at least one month prior to the date of bidding. . Finally, in relation to our case study, Article 20 of the Highway Regulation provides that an announcement needs to be made in the Official Gazette , which is distributed in two high circulation newspapers , at least fifteen days before the date of bidding.

The records of the Official Gazette are available online. http://www.resmigazete.gov.tr/default.aspx and http://www.oib.gov.tr/index_eng.htm

Article 25 of Regulation 2014/6282, regarding the open tender procurement, notice should be issued at least one month prior to last application date of bid. For the negotiated tender this period is only one week. According to Article 6 of the General BOT Law Implementation Decree (2011/1807): A minimum of 30 days. Finally, in relation to our case study , Articles 20 and 22 of the Highway Regulation, A minimum of 15 days for pre-qualification, and a minimum of 45 days for construction projects and a minimum of 30 days for projects with purposes other than construction.

Articles 13 and 16 of the BOT Decree N. 2011/1807 provide that open tender among all bidders is deemed the principal tender procedure, and deviations therefrom require that a reasoning be provided in the tender announcement or the specifications

Article 10 of the BOT implementation Decree provides that the procuring authority can decide to adopt a restricted tendering procedure. In this case, if preliminary qualification is decided, a Pre-qualification commission is established. The procuring authority would determine the commission's establishment and working procedures ...

ARTICLE 12 of the BOT implementation Decree provides that - (1) The following procedures are available:
a) bidding among all bidders (auto-selected method, any deviation from bidding among all the bidders requires a reasoning to be reflected in tender documents)
b) bidding among predetermined bidders
c) bargaining method

Furthermore, Article 15 provides that in cases where neither the open tender procedure, nor the restricted procedure can be used, the procuring authority can use the direct negotiation with more than one candidate. The qualifications and requirements of the business are assessed on the basis of the fees and services ...

The following articles provide that the tender documents must indicate the stages of the procurement process: - Article 8 of the General BOT Law Implementation Decree. - Articles 35, and 36 of the Implementation Regulation of Road PPP Law (indirect provisions) - Article 10 of the Highway Regulation

Laws and regulations applicable to PPPs usually provide general criteria for participants to assess whether they are appropriate to participate in the prequalification and/or tender stages. These provisions are provided under the following articles: Articles 8, 9, 10, and 19 of the Implementation Regulation of Road PPP Law: Article 8 - To participate in the work to be carried out in accordance with this Regulation bidders must; a) be compliant with the provisions of private law or of capital companies established in Turkey: commitment to the establishment of the joint-stock company , b) show an address for service in Turkey , c) inform the statutory residence, d) possess the necessary qualifications and competence, e) provide the required collateral and documents, Pre- selection and assignment to those who can not participate. Article 9 - The following are required for preselection or conditions to participate: a) to prepare the work assignment process, execute, finalize, approve or oversee the spouses of the persons mentioned by the officials ... b) Those temporarily or permanently banned from participating in public tenders or assignment in accordance with Regulation the 3713 Anti-Terrorism Act of organized crime within the scope and convicted for crimes and, c) from the date of the definitive acceptance of the documents was made before the lapse of 3 years preparing the assignment documents loaded for related consultancy services d) The fraudulent bankruptcy by the relevant authorities... Article 10 - General Directorate indicates every aspect send specifications of the work subject and specifications, (finalized with the approval of the Minister). The special conditions and technical specifications will be based on the nature of the task; it must show : a) the nature of the task, kind and scope , b) the rates and terms of the performance bond , c) the place, manner and terms of delivery and receipt of obligations, d) Appointed jobs and deadlines, as well as delay penalties, e) conditions and documents sought in equity companies ... j) method of dispute resolution . Article 19 - in order to ensure the most favorable conditions for the conclusion of the assignment , the willingness of financial and technical competences and qualifications for preselection made ​​in accordance with the purpose of scoring basis. For Preselection purposes, the companies will be asked to apply depending on the task feature to determine the adequacy of information. The documents prepared by the General Directorate indicate that the pre-selection will be evaluated according to a set of principles and information...

According to Article 30 (4) of the Regulation numbered 2014/6282, bidders can request clarification on the tender documents during the preparation to the tender and at the latest 10 days before the tender submission date

Article 11 of the Implementation Regulation of Road PPP Law states that the relevant authority shall deliver the clarifications in writing on the tender documents to all the bidders.

In Turkey, the disclosure of information is always done in practice. In fact, the procuring authority discloses the questions and answers to all bidders at the same time regardless of the identity of the bidder raising the question. One of our contributors provided that such information were disclosed at least in the cases that they witnessed: two cases in the context of port PPPs and three cases in the context of highways PPPs in Turkey

Procuring authorities are required to choose the bidder which provides the most profitable financial terms for the construction and operation of projects. Even though participants are required to present certain financial data and projections, there are no provisions in the Turkish laws and regulations describing specific information to include as to consider the forms submitted as "financial models"

Articles 37, 38, and 40 of the Public Procurement Law provide that the procuring authority must evaluate the bids based on their financial terms and then choose the bid which is the most economically advantageous, which determination is either: (1) solely based on quotation; or (2) based on operation and maintenance costs, cost efficiency, efficiency, quality and technical value or other similar factors in addition to quotation. Additionally, we will mention the Regulation of Highways that is directly related to our case study. Pursuant to article 30, the details of evaluation of the most economically advantageous shall be stated in tender specifications.

Although the BOT law does not include a specific provision about providing all bidders with the result of the PPP procurement process, the general Public Procurement Law does provide in its Article 41 that the tender result shall be provided to all tenderers within three days from the approval by the procuring authority... Furthermore, Article 29 of the Communique on Tenders Related to Authorization in Electronic Communication Industry provides that the tender decision is served upon all bidders within 15 business days of the approval, including the winner by personal delivery, registered mail, or a letter. Finally, relating to our case study, Article 32 of Regulation of Highways also sets out that the Commission provides all bidders with the result of the PPP procurement process along with the facts

Although the BOT law does not include a specific provision regarding notification of the grounds for the selection of the winning bid, the general Public Procurement Law provides in its Article 41 that the tender result shall be provided to all tenderers ... The reasons for excluding tenderers from the evaluation or not finding the tender eligible, shall be included ...

According to the Article 41(3) of the Public Procurement Law, the contract can not be signed until ten days, following the notification of tender result to all bidders. Unsuccessful bidders who do not approve the result, will have the chance to make an application for complaint to the Authority within this period

According to Article 25 of the BOT implementation Decree, the Administration may supervise or have another company supervise the Procuring company to determine whether or not the private company is running the PPP project in accordance with the provisions of the signed contract. In fact, it provides that the Administration officials covered by the contract save all the activities registered in the company's documents at all stages for studies or audit purposes: control of expenses and that all terms specified in the contract are being applied. Additionally, Article 74 of the Implementation Regulation of Road PPP Law also provides that the procuring authority may either supervise the activities of the company in relation to the PPP contract at any stage or outsource such supervision. (Supervision shall also be regulated in the PPP contract).

Article 16 of the Decree for Law no 3465 and Article 10 and Article 11 of the Decree for Law no 3996 a commission (management team) will be formed by the procuring authority.

According to ARTICLE 18 of the BOT implementation Decree- (1) The Implementation contract is prepared according to the specifications set forth in this article
(2) The implementation contract includes the following:
A) The parties.
B) The issue of the contract.
C) Time.
Ç) General principles of investment and services.
D) Standard and quality of goods and services.
E) Performance criteria in assignments, RIM and its services are conditional on keeping the order.
F) Financing.
G) Determination of fee and contribution if any.
Ğ) Treasury investment guarantee and / or demand guarantee (If not, amount and duration).
H) Investment time, date of acceptance and operation.
I) Delay in completion of work during the investment period and cost changes.
I) Expropriation and / or land consolidation.
J) Permissions to be taken in accordance with the legislation.
K) Collateral.
L) Monthly and annual reports.
M) Control.
N) Safety and environmental measures.
O) Force Majeure and Insurance.
P) Maintenance and repair.
R) Your assignment is devolved.
S) Termination.
Ş) Transfer of the facility at the end of the period.
T) The period
U) Loans.
Ü) Liability and compensation.
V) The default interest will be applied.
Y) Education.
Z) Resolution of applicable law and disputes.
Aa) Who will pay the contract costs.
Bb) Notification.
Cc) Contract language. Changes in the Contract
Dd) Other contracts.
Ee) Effective date of the contract.
Ff) Other

According to ARTICLE 18 of the BOT implementation Decree- ...
(2) The implementation contract includes the following: … Y) Education.

Therefore, the regulation of training programs in the PPP contract is mandatory. The PPP contracts usually stipulate for the relevant training to be procured by and as a responsibility of, the private partner whereby the procuring authority has the right to audit the private partner and receive information on the content of the training.

Article 10 of Decree for law N. 3996 provides: The administration is free to make ten qualification assessments. a ten competency commission shall be established if the administration decides to implement the procedure of offering and to assess ten qualifications between certain interested parties. The features of the Commission and the working procedures and requirements of the tender are determined by the administration

ARTICLE 25 of the BOT implementation Decree provides that- (1) The Contracting Entity shall be entitled to all activities, documents and records at all stages. (2) The party responsible for the audit costs will be specified in the PPP contract.
Therefore, the Procuring authority will set out the system for tracking progress and completion of construction works in the PPP contract

According to Articles 18 (1) j) and 25 of the General BOT Law Implementation Decree number 2011/1807, the PPP contract of a PPP Project should include provisions regarding audit and monitoring mechanism. Also, relating to our case study, Article 74 of the Communique number 93/4186 on Application of Law (Regulation of Highways), the control of the PPP project stages will be controlled by the General Directorate of the Highways or by someone who is authorized by the General Directorate of the Highways.

According to Article 25 of the BOT implementation Decree, the relevant administration supervises, or alternatively may commission another entity to supervise, the operations of the project company. In fact, Art. 25 provides that (1) The Contracting Authority shall be entitled to all activities, documents and records at all stages; and (2) The party responsible for the audit costs will be specified in the application contract.

The provisions of the PPP regulations simply state that the transfer of the project company is permitted provided that the affirmative opinon of the PPP Procuring Authority and the approval of the relevant Minister is obtained. In fact, Article 27 of Decree No. 2011/1807 provides that the project company may assignt its duties and rights under the implementation contract to a third party subject to the consent of the relevant administration and the approval of the relevant Minister (and, if the implementation contract was subject to the approval of the High Planning Council, the approval thereof). The details of share transfers, on the other hand, are usually adressed on secondary legislations and the relevant project agreements.

Additionally, standard contractual clauses usually include restrictions on change of control in the private partner and notification obligations in case of any share transfer in the private partner.      

The provisions of the PPP regulations simply state that the transfer of the private partner is permitted provided that the affirmative opinon of the PPP Procuring Authority and the approval of the relevant Minister is obtained. In fact, Article 27 of Decree No. 2011/1807 provides: Transfer of Assignment
(1) The private partner may transfer its all rights and obligations which arise from the implementation contract, to another company which also conformed to this Decree with the same conditions in accordance with the principals and procedures as it is indicated in this Decree by having Administration review and Ministry approval.
(2) Transfer of assignment on assignments which is HPC approves implementation contracts is possible with the affirmative opinion of the PPP Procuring Authority and HPC decision.
Article 60 of Regulation No. 2014/6282 and Article 41 of Regulation No. 2012/3682 regulate transfer of contract issue.

Article 18 (1) of the BOT implementation Decree number 2011/1807 provides that regulation of amendments should be inserted to the PPP contract.

Article 26 of the General BOT Law Implementation Decree requires that the force majeure events must be specifically determined in the contract that will be executed between administration and bidder. Article 4(9) of the BLT Law indicates that "the issues relating to force majeure and the termination of the agreement upon the mutual understanding between the administration and contractor shall be determined in the contract. In the event of termination of the contract, the performance bond shall be returned and the calculation of the works completed up to that point shall be made according to the general provisions." Article 59 of the BLT Regulation lists the force majeure circumstances to be set under the relevant BLT agreements.

The PPP legislation in general allow arbitration for resolution of disputes arising from the PPP project agreements. In some cases the venue of arbitration is restricted to Turkey whereas in some other cases the parties also have the option to set the seat of arbitration outside of Turkey. This applies to PPP projects provided for in Article 32 of the General BOT Law Implementation Decree (No. 2011/1807) stating that Turkish law shall govern the disputes which may arise from the performance of the PPP contracts executed by and between the project company, PPP procuring authority and other administrative authorities and Turkish courts shall have jurisdiction for the settlement of disputes.

The PPP legislation in general allow arbitration for resolution of disputes arising from the PPP project agreements. In some cases the venue of arbitration is restricted to Turkey whereas in some other cases the parties also have the option to set the seat of arbitration outside of Turkey. This applies to PPP projects provided for in Article 32 of the General BOT Law Implementation Decree (No. 2011/1807) stating that Turkish law shall govern the disputes which may arise from the performance of the PPP contracts executed by and between the project company, PPP procuring authority and other administrative authorities and Turkish courts shall have jurisdiction for the settlement of disputes.
Additionally, as per Article 32 of the Decree for Law 3996, Turkish court are authorized to settle disputes arising from the PPP contracts. The parties may alternatively choose arbitration.

Article 436(3) of the Civil Procedure Law No. 6100 states that the arbitral award shall be notified to the parties and shall be sent to the local court with the file. Such award shall be preserved by the local court.

According to the provisions of the International Private and Procedural Law No. 5817 and the NY Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Investor-State arbitration is enforceable by the local courts according to the provisions of the Washington Convention on the International Settlement of Investment Disputes to which Turkey is a member

According to Article 28 of Decree number 2011/1807, events resulting the termination of PPP contract are the non-performance of its terms, infringment of the PPP contract, bankruptcy, composition of debts, insolvency of the private partner and the termination related provisions and consequences of the termination will be set forth in the PPP contract. Note: Communique number 93/4186 on Application of Law provides: (1) Article 49: in the event of that the private partner do not provide the required guarantee, the contract will be terminated. (2) Article 55: in the event of that the private partner waives from its undertakings, the contract will be terminated. (3) Article 60: in the event of that the private partner is incapable, the contract will be terminated. (4) Article 74: in the event of that the private partner do not assign a public accountant company within 3 months after the starting date, the contract will be terminated. (Additionally alternative termination grounds may be determined in the contract). Furthermore, related to our case study, Article 60 of the Implementation Regulation of the Road PPP Law provides that if the project company goes bankrupt, or goes under liquidation Article 28 of Decree number 2011/1807 on the Implementation of Law numbered 3996; Article 60 of the Implementation Regulation of the Road PPP Law; (and Communique number 93/4186)

Article 28 of the General BOT Law Implementation Decree and Article 60 of the Implementation Regulation of the Road PPP Law provide that the consquences of termination must be determined under the PPP contract. Also, Art. 40 of the General BOT Law implementation provides that (4) If the contract is terminated for any reason, all rights and use permits are also automatically terminated ... no rights can be claimed.