THE BUILD-OPERATE-TRANSFER MODEL

REPUBLIC OF TURKEY MINISTRY OF TRANSPORT AND COMMUNICATION DIRECTORATE GENERAL OF CIVIL AVIATION THE BUILD-OPERATE-TRANSFER MODEL FOR AERODROME TERMINAL BUILDINGS Hazırlayan: M. Cemil ACAR Head of the Aerodromes Department (Architect, M.Sc.) Publications of Directorate General of Civil Aviation Aerodromes Department

2 REPUBLIC OF TURKEY MINISTRY OF TRANSPORT AND COMMUNICATION Publications of Directorate General of Civil Aviation Publication No.: HAD/A-02 TURKISH MODEL THE BUILD-OPERATE-TRANSFER MODEL FOR AERODROME TERMINAL BUILDINGS* The printing, publication and sales rights of this book are owned by the author. The book may not be reproduced, fully or in part, without the author s permission. It is unquotable. * A rearranged form of the thesis headed The Build-Operate-Transfer Model in the Production of Public Buildings Sampling of Aerodrome Terminal Buildings- made by M.Cemil ACAR at the Gazi University Institute of Natural Sciences Main Scientific Branch of Architecture in 2006. Advisor Prof. Dr. Tanju GÜLTEKIN Prepared by M. Cemil ACAR Head of the Aerodromes Department (Architect, M.Sc.) ISBN: 978-975-493-023-8 2009 Directorate General of Civil Aviation www.shgm.gov.tr Graphic Design Merdiven Ajans G.M.K. Bulvarı Özveren Sokak No.: 54/ Demirtepe - Ankara Phone: 0312 232 30 88 e-mail: merdivenreklamtanitim@gmail.com

TABLE OF CONTENTS FOREWORD / 11 1- OVERVIEW / 15 3 2- PUBLIC STRUCTURE SERVICES / 19 3- THE BUILD-OPERATE-TRANSFER MODEL / 48 4- ANTALYA AIRPORT 2 nd INTERNATIONAL TERMINAL SAMPLING / 68 5- POST-BUILDING OPERATIONAL PROCESS / 150 6- CONCLUSION AND SUGGESTIONS / 153 REFERENCES / 159 APPENDICES / 163 APPENDIX-1: BUILD-OPERATE-TRANSFER MODEL TENDERS / 164 APPENDIX-2: BUILDING MANUFACTURES / 165 APPENDIX-3: FEATURES OF THE ANTALYA AIRPORT 2 nd INTERNATIONAL TERMINAL PROJECT / 171 APPENDIX-4: SYSTEMS OF OVERSEAS SUPPLY / 178 APPENDIX-5: PROGRESS ILLUSTRATIONS OF THE ANTALYA AIRPORT 2 nd INTERNATONAL TERMINAL / 179

The endeavours for getting our civil aviation at the highes levels by means of the decisive policies of our Ministry determined since 2002 are continuing nonstop. In order to be able to respond to the intensity permanently increasing in the aviation sector from year to year, to enable the implementation of innovations and due to the planning of constant growth, and in order to enable our aerodromes to satisfy this need, they are required to be rapidly developed. 4 Some of our airports have been reconstructed with the Build-Operate-Transfer model without even spending a penny from the public treasury for the improvement, modernization and efficient use of our aerodromes, and the operational activities of the terminals within the periods determined in their tenders have been transfered to the Private Sector. As a result of the tenders made to date, Atatürk Airport International, Antalya Airport International I and II, Dalaman Airport International, İzmir Adnan Menderes Airport International and the Esenboğa Airport Domestic and International Terminals in the framework of the Build-Operate-Transfer model have been realized. In this framework, the tenders of the Milas-Bodrum Airport have been realized as well and their works are continuing. During this process, these constructed terminals have brought the prestige of our country on the international platform to a more prestigious position both in terms of the unique architectural buildings as well as the comfort and facilities they present. It is considered that this document describing the characteristics and introducing the terminals constructed as a result of the implementation of the Build-Operate-Transfer Model published by Civil Aviation Directorate General fulfilling the organization and supervising duties of the civil aviation sector shall be very useful and that it shall constitute an example for other countries endeavouring to develop the civil aviation activities along with the practices in our country..

5 Binali YILDIRIM Minister of Transport and Communication

In the recent years, there has been a significant increase in the number of tourists visiting our country and since a great majority of the coming tourists prefer airways, the airports, which represent our gates to the external world, have been confronted with an traffice intensity of domestic and international increasing every day. Taking also into consideration the fact that the tourists visiting our country get their first impression about our country at the airports and that this circumstance directly effects our country s tourism potential, and that likewise, tourists leaving our country in a pleased mood, shall be voluntary and efficient means of publicity in terms of the country s tourism, it is even more important to modernize the aerodromes. 6 Therefore, it has become necessary for our country s aerodromes to be renewed in order to be capable of satisfying the age s needs both in terms of their physical infrastructure as well as the service they render, parallel to the developments experienced worlwide in the aviation sector, and of improving their prestige on international level. Our modern terminal buildings, which are the best indicators of the significant point our country has reached in the aviation sector, shall certainly lead the promotion of our country at the international arena and this endeavour shall receive interest both in terms of the aviation sector as well as the community of architecture. We think that this publication, which comprises the properties of the terminals completed and presented for service by the Build-Operate-Transfer model, shall be very useful for everybody including our citizens along with the relevant institutions and establishments requiring information in this matter, and we are proud of having made such a beneficial source of information awarded to the Turkish Civil Aviation..

7 Dr. Ali ARIDURU Director General

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INTRODUCTION Having arrived at the year 1990, the aerodrome passenger terminals in Turkey had remained extremely inadequate in terms of contemporary technology, the rapidly increasing number of passengers and passenger comfort. Therefore, it has been resolved during those years to build new passenger terminals. For this purpose, the State Airports Administration has opened a competition for a series of architectural projects, starting with the Antalya Airport, which has been under the hardest circumstances, and then for the Bodrum, Yeşilköy, Dalaman, İzmir and Ankara terminal buildings by order of appearance. In 1991, the project which we have presented to the project competition with limited participation, which has been opened for the Antalya Airport terminal, has been acknowledged as the most appropriate project both in terms of its master plan as well as its architectural project. In the same year, the State Airports Administration has entrusted to our office the implementation projects of the first of the terminal buildings to be built at the Antalya Airport. The preparation and approval of all projects has taken about one year. However, despite the gradually increasing number of passengers and the severe difficulties at the Antalya Airport, the building could not be constructed for quite some time since financing could not be found by the public. 9 Having arrived at the year 1996, as a solution for the resource squeeze of the new Antalya Terminal, it has been decided to build it by means of a model called Build-Operate-Transfer model which had been newly started to be implemented by the State. The tender has been realized and the building has been constructed and has come into service completely with all its systems within a short time such as 18 months. By means of this model, we have seen that, differently from the public buildings the projects of which we have been preparing over the years, a structure could be achieved where the project is implemented practically without any deficiency, that successful buildings having been partially saved from the sophisticated process of public bureaucracy could be realized, and moreover, that they could be realized rapidly. This first unit designed for 5 million passengers-year, due to the delay in starting the 2nd building on the master plan, has proved that it could even serve 10 million passengers. The 2nd unit could just be tendered in the year 2003, and this time it has again been completed and put in commission completely in a record duration of 11,5 months.

My esteemed colleague Mr. Cemil Acar had been in charge at the State Airports Administration during the construction and building process of the 2nd terminal in Antalya. Therefore, he had the opportunity to closely observe the Build-Operate-Transfer model in Antalya and later on at the other airports with all its aspects. He reviews in this book the tender and construction processes, starting from the projects, of both the two terminal buildings in Antalya as well as the Dalaman and Ankara terminal buildings built later on, with a remarkable attention and with all details, and presents them to the information of the concerned parties. Even I have come to know many detailed information related to the Antalya terminals, which I thought I closely knew as the project author, from this book and I have benefited much from it. I sincerely congratulate Mr. Cemil Acar for this precious work, which I find immensely useful for those interested, and wish him the continuation of his achievements. Doğan TEKELİ Architect (Dr. M.Sc.) 10

FOREWORD In the framework of the mankind s historical development, the breathtaking speed of the developments experienced since the 20th Century is amazing. In this modern century, where a new invention and technological development is experienced every day, the requirements of the society have undergone a change and have acquired a new skin. Some products, the existence of which we had not been aware of even a few years ago, can become indispensable elements of our life. In a developing and progressive way of living, developments are experienced likewise in communications. The aviation sector, which has been rapidly developing since early 20th century, today forms a significant point in our life. The speedy and comfortable way of travelling introduced by aircraft, has resulted in the requirement of creating new public areas. These areas, which we call Airports and where the aircraft depart and land, take shelter, where the passengers go aboard and get down, have become the indispensable of today s life. These places defining the notion of flying as the access to the living space, are expressed as places ensuring the ability to fly what mankind has been desiring most for ages for sure. Legends and fairy tales related to what man has been desiring most for centuries, to man s dreams full of curiosity and desire, looking up to the sky, related to man s affectation to birds, have always attracted interest. In Greek mythology, Daedaus of Athens and his son Ikarus have tried to put on wings and fly like a bird in order to escape from the labyrinth surrounded by high walls, where they had been arrested by the Cretan King. Apart from this mythology, many philosophers have brought forward various ideas about flying. Ultimately, this concern, this dream, has rapidly advanced toward concrete solutions by means of the works of Leonardo Da Vince, which were going beyond his era. Along with the persistent efforts of Hezarfen Ahmet ÇELEBİ, Montgolfier and then the Wright brothers, the sky has been filled with metal birds, the ability of flying speedily, a different dimension of flying has been experienced. 11 The formation of shelters of this new sector as a result of this desire and the perception of these shelters as places of preparation for flying has brought along with it its reflection to architecture. In his work on Architecture Le corbusier states that an aircraft is a product of sensitive choice. The lesson given by the aircraft lies in the logic conducting the introduction of the problem and its solution and realization.i think that I share the same spiritual status,

in terms of architecture, with the person having invented the aircraft the lesson to be derived from the aircraft lies in the forms created; first of all, when you look at the aircraft you don t have to see it as a bird or a dragonfly, but as a machine for flying. The lesson to be derived from the aircraft lies in the manner the problem has been introduced and in the logic of the successful solution. Nowadays, when a problem is introduced, its solution is inevitably found. Both his admiration for aircraft as awell as his manner of thinking in his associating the succes achieved in the solution of these vehicles with architecture, is of guiding nature in the solution of airport terminal buildings in the recent years. 12 The airports, which represent the threshold of moving from the hard and complex elements of urban life to the easy and speedy dimension of flying by aircraft, have always been an exciting topic in architectural terms by this characteristic. Airports are living spaces, which comprise facilities that ensure their communication to the place they wish in a speedy manner, where they are able to easily go aboard, spend time, go shopping and rest. It is an entry gate for incoming passengers ensuring their communication to the point they wish in a convenient and comfortable way. The fact that it is the first contact with the country in which they are present, for passengers entering the country, and the last place which passengers leaving the country, see, explains this significance. Airports, having achieved the property of being the threshold of countries, gain the characteristic of being the place where prestige and image concerns are in the foreground. At the same time, these buildings, which are used by thousands of persons at the same time and where many aircraft are served simultaneously, have to operate perfectly and well just like a machine. Today, studies are made constantly on the properties of airports and terminal buildings, which have reached a business volume of hundreds of billion Dollars, and this has turned into an international race. Every year new modern airports/terminal buildings are opened and are present to use as the edifice of pride of the countries in which they are located. These buildings, which hold an important place in providing the requirements of modern life where technological developments progress without reducing the speed, have started to turn into huge shopping centers parallel to the constant decrease of its use. Taking into consideration that travelling by aircraft increases significantly every year, it is clear that this conversion is unavoidable. On the other hand, global business associations and their displaying an increasing acceleration in trade have brought along the use of the airports for purposes such as meetings, lodging, education, etc. People coming from other countries or cities create the fact of saving time by completing their affairs within the borders of the airport and returning from here by aircraft again. This need has become so clear that airports have now started to achieve a new identity with their hotels, conference halls. Terminal buildings, which live for 24 hours, where the passengers are able to satisfy all kind of requirements, are quite like a little town as mentioned just above. A little town with its streets and squares, business areas, sometimes hotel, comprising permanent living elements... The fact that the energy and water quantity consumed in a terminal building

is equivalent or may be exceeding the consumption of many counties or small scale province centers of our country without taking the passengers into consideration, only number of employees supports the reality of this notion. Terminal buildings resembling vertical towns similar to those imaginary towns which Italo Calvio describes in his unforgettable work Invisible Towns. Terminal buildings are towns which consist of layers, are of huge scale and embraced by a single shell. Towns, too, always think that they are the work of thought or coincidence, but neither one nor the other suffices to keep their city walls upright. What you admire in a town are not its seven or seventyseven wonders, but its response to a question which you ask it or the question which it asks you and certainly expects you to answer, just like Thebai s question asked by the mouth of Sphinx says Marco Polo to Kubilay Khan in the invisible towns. We ought to ask this very intelligent utterance for terminal buildings as well. We should discuss the answers to the question which it asks us or which we ask it. 13 I wish to present my thanks to my esteemed Director General Dr. Ali ARIDURU, who has been working with superhuman performance during the process of restructuring the Civil Aviation Directorate General, who has acted as our leader with all kind of self-sacrifice and efforts for the purpose that the Civil Aviation Directorate General gains a corporate identity and the establishment of its corporate culture, and who is still continuing this position, for leading the publication of this thesis. M. Cemil ACAR Head of the Aerodromes Department (Architect, M.Sc.)

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1.OVERVIEW Turkey has made significant progress in the aviation sector during the last years and has achieved a graphic over the aircraft and passenger traffic increase worldwide. Related to this progress, many projects are developed regarding the requirements and capacity problems arising at aerodromes. Aerodromes, which represent the most important base of the aviation sector, are financed and operated by the public in our country. Recently, it has been gradually quitted to obtain any aerodromes, which are of large scale and require great investments to the same extent, by means of totally public investments, because one of the basic problems of developing countries such as Turkey is that the resources are limited and insufficient. Especially the planning, implementation and control of large scale projects with public contents, the new management technics becoming compulsory, from time to time leaves this kind of countries confronted with unsolvable problems. 15 For example, developing countries according to the report of the World Bank for the year 1994, reserve annually an average of 200 billion Dollars for their public structure investments. This corresponds to 4% of the national income and one fifth of the total investments. Along with this, the State becomes obligued to provide for an amount of 30% to 80% of the total investment outlays for the public structure expenses [1]. The progress of developing countries depends on investment, on any resources which may be allocated in the investment for this purpose. Any resources available should be directed to investments in a planned, programmed, moderate and rational understanding. The financing of the investment requirement, against developing limited resources, by means of public resources becomes difficult. This circumstance gives rise to a search for new resources and finance methods; efforts are increasing to ensure the contribution of private enterprises to finance and risk. Whereas the B.O.T. model is a model developed related to these searches. By the B.O.T. model it is aimed at increasing the contribution share of the private sector in the infrastructure investments, to relieve the burden of public finance and to increase efficiency in the presentation of service.

The B.O.T. model also gives the firms, who invest in developing countries, the opportunity to transfer their technological infrastructure and experience. Knowledge, experience and technological infrastructure, which are an important factor in the development of these countries, form a great advantage as a different reflection of the investment made. In order to enable our country, which takes place among developing countries, to join advanced countries in the coming period, at has to realize investments and has to produce, along with some other factors. When the necessity to implement great investments meet with the insufficiency of capital and technology, it becomes unavoidable to use different financing and investment methods. In this framework, the build-operate-transfer (BOT) model which has come up intensively during the 80 s, could not be implemented for a long time due to significant legal problems. 16 In recent years, the implementation of many significant projects has been realized upon the State Airports Administration s selecting the extra budgetary financing model for obtaining the aerodrome terminal buildings. 6 terminal buildings, with a construction value of more than 1 billion US Dollars, which are of international scale and equipped with up-to-date technologies, have been brought in to the national economy without being a burden to the budget. Thanks to these buildings, which have been realized by entirely extra budgetary financing, employment opportunities have been created for thousands of people both in the construction stage as well as in the operational period, and they have become an important factor of production in many sectors due to the requirements in the construction stage. The objective of the work is to consider at length the process of acquisition of terminal buildings as a sample of public buildings by the B.O.T. model applied as an extra budgetary financing model towards the provision of public requirements. It has been aimed at considering in general terms the planning, building and control stages of the terminal buildings which have been made and are actually made by means of the Build-Operate-Transfer model, and thus to consider at length the principles and dimensions influencing the design and building thanks to this model, the legal infrastructure, the adaptation with this model to technological requirements, advantages and disadvantages, innovations coming along with this model as well as developments. The underlying bases of the legal infrastructure, the limitation it brings along in implementation and matters which may be arranged with experiences obtained have been questioned. Thus, looking at implementations, it has been targeted that future oriented lessons yield inputs for new implementations. The Antalya Airport II. International Terminal and Supplementaries project, which has been tendered and the construction of which has been completed by the Build-Operate-Transfer (B.O.T.) model, and the operations of which have commenced, has been analysed in terms of its technical, economical and social feasibility as well as building management during construction. In the framework of the building management, all processes starting with the planning stage from the moment where the building and the requirement have

come up, have been analysed. The methods chosen due to the conditions requiring a very rapid building process as in the sampling of the Antalya Airport 2 nd International Flights, all phases have been examined interrelated with each other under the concept of integrating management. As working method; Starting from the project s commencing phase, the tender process has been reviewed and the relevant documents collected. The project s building phase has been followed up starting from the site delivery and subsequently the course of the construction s development stage has been monitored with periodical construction site inspections. Information and documents serving as resources for the construction phase have been compiled in coordination with the authorized persons of the contractor firm of the Antalya 2 nd International Terminal (ÇELEBİ-IC A.Ş.). The end of the project s construction phase (Temporary Admission period) has been examined and the term of Transition to Operation has been separately followed and data collected. 17 The data of the enterprise s 1 st year (April 7, 2005 April 30, 2006) have been collected and reviewed. The data have been analysed and compared. A comparison has been made between the projects realized by means of the BOT model with the data obtained through the design and construction controlling of the Dalaman Airport new international terminal as well as the İzmir Adnan Menderes airport new international terminal multi-storey car park project, and it has been ensured to obtain common data. The State Airports Administration s Directorate General, who has realized significant Implementations by means of the Build-Operate-Transfer Model, has made serious contributions to the establishment of the legal infrastructure of this model by the works it has performed. The experiences obtained by working in the institution, are the most important bases of this work. The researches, impressions and observations within the process of active work in the implementations, have provided inputs for the work. By means of negotiations made with the executives, who have realized the first implementations in the institution and who have attended the preparation of the specifications both legally as well as contractually, use has been of these persons experiences. Joint works realized with the contractor firm s executives and project executors as well as project authors, have constituted a basis to this work as a significant contribution. This subject has been attempted to be supported by literary works made.

As per the general lines of the thesis work; in the first part the introduction, in the second part the public structure services and methods of acquisition, in the third part the build-operatetransfer model and its features have been considered at length, and thus it has been strived for reaching the factors for chosing the BOT model in obtaining the terminal buildings as public building selected as sampling. In the fourth part, the planning, building and control processes of the Antalya 2 nd International Terminal has been considered at length in the framework of the construction management systematic. In the fifth part, the legal regulation of the operational period, which is one of the important stages of the build-operate-transfer model, and the revenues of the operational period have been reviewed in the framework of the contract, have been reviewed and the completion of the definition of processes in the formation of the BOT model has been ensured. 18 The parts considered at length within the scope of the thesis, such as public services and methods of their acquisition, the build-operate-transfer model, building management, have been separately investigated in various academic works and many different thesis have been prepared. However, the explication of this framework as a whole in the process of acquisition of public buildings within the systematic of the building management of terminal buildings as well as the BOT model has not been realized before and forms the genuine part of this thesis. Besides, the consideration of the building stages of the terminal buildings by the integrating management concept within the construction management systematic, and with experiences gained by being active at the stages of construction, intensifies the orginality of the thesis.

2.PUBLIC STRUCTURE SERVICES 2.1. Public Service 2.1.1. Description of public service Public services are continuous and regular activities, which are realized and presented to the community by the State or by other public corporations or under their supervision and control in order to provide for general and common requirements, to provide for the public and its benefits [2]. 19 In other words, in the political direction and legal framework in which the state determines its legislative and executive power, it is defined as the conduct of public activities in a direct, continuous and harmonious manner by using public power and procedures to ensure and carry on the community s orderly and civilized life [3]. Public services should accommodate the features of being rendered regularly and continuously, being oriented toward providing public benefits and fulfilling requirements, and providing for social needs. Along with this, public services should be oriented towards obtaining social needs and may also be oriented towards providing a comfortable and convenient life of the individuals living in the community. The state, which is unable to provide for the financial and technical resources necessary for the establishment and operation of public services, has started to look for ways and methods of ensuring them to be realized through corporate bodies. One of the basic services, which are acknowledged to be important in terms of especially the economic growth and progress of a country, are public building services. Public building services have very different characteristics in many areas. These service types representing the country s infrastructure, are structures which have to be developed continuously with the dynamic components which they accommodate. These services, which feature a very extensive scope, consists of sub-sectors within itself. Among these, the transportation services being associated with the subject of the thesis, shall be handled in detail.

2.1.2. Public structure services: definition, types and general properties Public structure may be defined as the structure constituting the basis of a system or organization. According to this definition, public structure is a very extensive concept reaching from some physical components to corporate arrangements. In this scope, we may describe it as structures made or caused to be made toward public service by means of public resources according to the Country s and the society s requirements. 20 In the science of economics, the public structure concept has two different meanings, i.e. the narrow and the broader sense. In the narrow sense, public structure comprises the means such as transport, communication, energy, water, etc. sought at any location where an investment may be realized. Whereas public structure in the broader sense expresses facilities such as transport, communication, energy, water and sewerage, establishments in the field of education and health, which economy has or has to have, and also social fixed capital including the knowhow and skills related to these subjects. Accordingly, while public structure in the narrow sense is described as material or economic structure, the public structure concept in the broader sense includes also social structures comprising educational and health services as well, along with the material (economic) structure. Whereas the public structure services handled in the present study comprise the services described as material or economical infrastructure. Accordingly, the economic public structure comprises the services in the areas of energy, gas pipeline, telecommunication, water and sewerage, solid waste collecting and destruction; barrages, watering chanels or roads oriented public works and transport services such as railways, city transport, ports and waterways as well as aerodromes [4]. The public structure services generally feature the following properties: There is common consumption in public structure services. In case of public structure services, there is common consumption rather than individual consumption.. Consumers may make use of infrastructure services simultaneously. Public structure services are necessary to ensure economic development. Increase of population, the notion of urbanization, etc. factors increase the need for public structure services. Public structure services are services which have to be produced with priority and as necessary for the realization of various economic activities in a country or region [5]. Consequently, they have positive influence on the total production and economic development. Public structure services require high fixed costs at the first stage of the investment. Public structure services are services mainly requiring fixed cost. This feature of the infrastructure services results rather from the fact that they have a capital intensive production structure.

Public structure services are described as long-lived. Along with requiring a high investment cost, the benefits of this investment are revealed in the later years and the service has a longlived feature. In public structure services, the costs per consumer decrease while the number of consumers increases. Since the increase in the number of consumers in infrastructure services require the increase in the production scale as well, costs decrease depending on this increase [6]. Production costs decrease as a result of the increase in the production scale depending on the increase in the number of consumers. 2.1.3. Transport services as public structure service Transport services consist in themselves of road, airways, railways and sea route and port services. The general properties of transport services are as follows: All transport services require great infrastructure investments. Both consumers as well as private corporations benefit from transport services since they facilate their economic activities and cause a decrease in their costs. 21 Since the international mobility of goods and services has increased along with the globalization of transport services, it has gained more importance nowadays. Transport services require high fixed costs [7]. There are two methods in the financing of transport services. The first of them is that the costs of the transport services are covered by taxes provided for by the general budget. Likewise, in the financing by means of taxes, indirect taxes merged with fuel prices may be made use of, too. Whereas the second one are the amounts taken from those benefiting from the transport services. The passage fees taken based on the principle of benefiting are one of the methods used in financing paid roads. On the other hand, the entire cost of the service presented, may be covered by the amounts taken from those benefiting from the service by the producing entities (state and/or private sector) realizing the transport services.. In transport services, production may be significantly multidimensional. This is for instance the case for railways services. At railways, different services are rendered with the same aids and the same labor force. Both passenges as well as load may be transported on the same rails [8]. This is also the case for port services. The airways transport sector, which is an important subordinate sector of the transport sector; is an important sector consisting of institutions and establishments conducting the activies, subject of activity, instruments and equipment of advanced technology used, special

infrastructure and communication systems, qualified manpower, people rendered service, boards of national and international characteristics and subjects of regulation [9]. The road transport sector, which is a system consisting of passenger and freight transportation oriented, interdependent activities and units, comprises the construction of aerodromes, operation of aerodromes, airways operations, air navigation and air traffic control services, ground and chartering services, training, maintenance, relevant basic facilities and superstructure and other aviation activities as well as the coordination and supervision of all these activities according to internatonal rules [10]. Traffic estimates prepared by the ICAO express that the general increase in global airways transportation shall continue. While for the passenger traffic a growth of 4,8% is foreseen in Europe and of 3,3% on the North American market, a growth more than the other regions in expected in the Asia/Pacific region. 22 As a result of the demand and traffic increasing since the 80 s, delays in the flights, limited air traffic operations and excessively crowded terminals have become the ordinary images of air transportation. Along with this, since it has been comprehended that if urgent changes are not realized on the plans and policies, these unfavorable conditions shall become even worse, the primary subject of the aviaton sector and the governments has been determined as the aerodrome and air traffic insufficiencies. The major problems of the sector during the same term have been summarized as follows: The demand, which may be described as the number of passengers and aircraft, is increasing even more than the estimates. Modernization is needed for many air traffic control systems and the coordination between control centers has to be developed. Due to complicated bureaucracy and political hindrances, the planning, deciding and financial implementation stages of infrastructure investments get longer very much and are delayed. As a result of the awareness having arisen toward the environment, aerodrome extensions and traffic operations are not confronted with any new hindrances [11]. 2.1.4. Planning and project management in the public After 1980, along with the conversion stage of our country s development strategy in accordance with the outward-oriented and free market conditions, the role of the public sector has been reshaped. The share of the public within the total investment has decreased, and along with this, priority has been started to be given to projects in the fields of transport, energy, communication, urban infrastructure, health, etc. rather than manufacturing. This change

has increased the importance of planning and project management in physical and social infrastructure projects. Planning and project management principles have started to be used not only for projects directly managed by the public, but also for the evaluation and execution of investment projects conducted by means of public resources in various forms (stimulation, Build-Operate-Transfer, etc.). This circumstance has made the need for the public to work more efficiently more pronounced and has given importance to objective criteria in the process of decision. Taking into consideration that the project management methods are techniques, which come up in the market economies and develop in time, it may be expressed that project management is a technique that shall not become antiquated. Project planning is used as a tool of public policies, to the income distribution between sections and regions in the light of new trends worldwide except for economic efficiency. In addition, the participation dimension during various stages of project planning and the project process is emphasized even more each day. In this framework, it becomes important that the public resource allocation is institutionalized in a way as to ensure efficiency on the basis of objective criteria and to serve various social targets. Within this effort of institutionalization, it should be clarified which standards shall be used in various phases of designing in different sectors and for various cases where public resources are used. 23 It is important that at various stages of project planning and the project process, the allocation of public resources by the use of the principles of contribution is institutionalized so as to ensure efficiency on the basis of objective criteria and to serve various social targets. For the various circumstances where this public resource is used, this shall result in which standards and principles shall be used and which contributorship mechanisms shall be applied in project management. Taking into consideration the investments conducted by the mediation of the public sector, it is seen that many elements of the project management process are applied in an unnamed manner. What has to be done is to express this process in a clearer manner, to define deficient points, to ensure its implementation in a scientic manner and thus to ensure its consistency with international standards. In Turkey, public organizations have to conduct their investments in the framework of determinents such as project costs, characteristic, duration, location, annual allocation mentioned in the public Investment Programme put into force by the Resolution of the Council of Ministers every year. Whereas the organization in charge of the preparation of development plans and the Annual Programmes being the implementation tools of these plans, and in this framework the selection, programming of public investment allocations consistent with development targets, and the determination of investment allocations is State Planning Organization. Therefore, investing public organizations must transmit to the State Planning Organization their investment projects, which they suggest to be included in the public investment programme, together with their relevant feasibility studies. The State Planning Organization evaluates the feasibility

studies delivered by the public organizations in terms of the plan targets, public investment policy, national economy, sectoral an intersectoral priorities and makes a choice between the projects, and forms the public investment programme by allocating resources to the projects selected. The fact that any investment suggestions, which are communicated to the State Planning Organization by public organizations, is not supported by well-prepared feasibility studies unfavorably affects the plan-project relation, the formation of the public investment programme by preferential projects which are well analysed in technical, economical, social, financial, environmental terms, the rational use of resources and consequently the maximization of the social benefit. 24 The attempt to conduct a public investment programme, which consists of many projects the priorities of which could not be determined well by limited budget means, has become one of the basic problems encountered in introducing public investments to economics in our country on time during the recent years. In this case, sufficient resources may not be assigned in appropriate times even to projects of high priority, the construction periods of the projects lengthen, project amount rise, their costs to economics increase. In order to ensure that the public investment programme achieves a more rational structure, it has to be made of high priority projects of a number consistent with the country s funding means. But this shall just be possible by making the right choice from projects which have been well analysed in terms of national economy. This has revealed the requirement to revitalize the significance given to the concept of project analysis and the plan-project relatoin both with investing organizations as well a central decisional units. The supply of public resources as entirely provided from the budget, has become quite difficult for developing countries. The accurate and scientific realization of plan-project analysis made shall also ensure that right investment decisions are adopted as well. As a result of the planning and analysis made, the development of strategies towards the provision of investments, being oriented towards public requirements, by means of out-of-budget resources shall prevent the overstain of the budget and new employment means shall be created. For any projects to be made for public service requirements, it is not compulsory that the public share is more. However, the public share may be increased by means of the realization of certain infrastructure projects necessary for the sound functioning of economy as well as some major and risky projects, to which the private sector is not willing or for which their financial power is not sufficient, by the state. In addition, the private sector supported by indirect ways such as stimulating investments, creating a competitive environment, ensuring economic consistency by monetary and finance policies, may also undertake the main role in achieving the targeted plan objectives. On the other hand, the fact that the state has informed the private sector about the affects of both its own investment policies as well as alternative investment

strategies on the economic growth by means of the state s planning mediation, ensures that private sector investment decisions are founded on a more rational basis. Whether on public or on private corporation level, the use of the resources in the most efficient manner and the accurate evaluation of the options, is closely related to the investment projects perfectly prepared in various areas. In order to be able to see and prevent beforehand any damages arising from the selection of projects with imperfect and deficient aspects, detailed examinations and analysis have to be made in many subjects. Therefore, it is initially useful to deal with the phases of the project planning preparation process. The aim in project planning is to ensure that the investment or project is realized in the requested time and with low cost. The aims of a project may be listed down as follows [12]. 1. The completion of the project as soon as possible in the framework of the resources available, 2. The use of minimum resource during a certain period 3. The completion on time of a project, which shall minimize the project s total cost 25 Projects have a great variety of properties. Some of them are as follows [12]: 1. A project requires that a part of the existing resources are bound already today in order to obtain more resources. 2. The realization of projects started for benefits to be obtained in the future may take a long time. This period, which passes for the preparation, analysis, selection and implementation of projects, is called continuation period. Seeing and feeling the useful affects to be created by certain projects causing the binding of resources for long periods may take very long years. 3. The economic lives of projects various between 15 years and 50 years. If sufficient maintenance is provided, some projects may also serve permanently. 4. Projects, which are realized in order to obtain benefit by using resources and which consist of activities featuring a complex structure, may also have quite important external affects. 5. Project, being a tool of change, is the whole of coordinated actions starting without adopting any political decision and continuing until the change of resource composition and level, to ensure contribution to the realization of a country s development objectives. 6. Projects create new or supplemental production capacities including land arrangement, buildings and other constructions, machinery equipment, etc., to be used in the production of useful goods or services.

7. While projects cause limited resources indispensably to be bound to a certain area, thus, they also prevent these resources to be used in other areas as well. 8. Special arrangements are required for the follow up and coordination of the planning, evaluation and implementation of some major projects (South East Anatolian Project, etc.) requiring resources of immense amounts. 9. The entire projects may not be financed out of the consolidated state budget and different funding ways are frequently made use of. These may be summarized as the use of resources created by state economic enterprises in the funding of their own investments, the benefiting from out-of-budget funds or domestic development banks, the provision of loans from foreign countries and international development banks, opening the project fully or in the form of partnership to foreign capital, the implementation of the build-operate-transfer model and financial leasing. 2.2. Public Structure Service Procurement Models 26 Public service may be established by law or by administrative procedure based on the express power granted by the law. The fact by whom and by which method the service shall be rendered, is required and compulsory to be determined by the same administration. As in the establishment of the public service, the relevant organ has also discretionary power on the rendering procedure. The performance of public structure constructions necessary to enable the rendering of public services, is also realized by the manners foreseen by law in this framework. Instead of accounting extensively on these models, the construction models of Aerodromes terminal buildings as a Transport public structure shall be dealt with. Even though many people in Turkey have been convinced that the solution of problems of public services require major investments and that the private sector should join public services at least in the investment and operating area, the formation of right models for providing the private sector participation shall not be easy, because the problems are very complex and innovative enterprises are required for their solution. However, due to the fact that the obstructions and risks with which the private enterprise shall be confronted, are innumerable as well, just projects which have been carefully prepared and the contructual risks and economic balances of which have been established, have the chance to get ahead on the right course and be successful. In this context, it is important that those concerned with the the matter discuss their experience and exchange their ideas in order to form any models leading to succuss and their contracts. However, in Turkey, public-private sector cooperation is required at various levels for projects of private sector contribution to the public services. For the realization of this, public and private

initiatives are required which have common intellectual basis and which aim at participating in the formation of Turkey s sustainable development and management models by realizing active, stable, positive and courageous activities in cooperation with public administrations in the solution of public services problems as well. It has to be pointed out that the procurement models of public services is not an ordinary procurement of service by the public from the private sector. Essentially the Public Administration sets out to delegate a part of its legal duties to the private sector by means of a contract. Therefore, it has to be mentioned that the type of contract suitable to the purpose is neither the independent contractor agreement as in the construction-undertaking works, nor the purchase agreement related to the purchase of any product or service. Furthermore, the public administration plans to assign (give power for) the usage right of its assets and a part of its relevant duties, rights and responsibilities to a corporate body in order to enable these services to be rendered, and requests from the Corporate Body to use these assets and to fulfill a significant part of the duties which the administration is normally liable to realize related to the legal procurement of the services. As an important public service, the construction and operating services of the aerodrome terminal buildings have been conducted by the state administrations through methods the funding of which was entirely covered by the budget until the early 90 s. Starting with the mid of the 90 s, the construction of the aerodrome terminal buildings has begun to be realized through the build-operate-transfer model, which is an entirely out-of-budget finance model. 27 Along with the developments in the air transport sector and consequently the requirement for the modernization of the aerodromes, factors leading to the provision of the private sector contribution to the funding of aerodromes are as follows: As a result of the increasing pressure towards making restrictions in public expenses both direct investment/capital expenses as well as subventions have been restricted. The difficulty of the provision by the public of the requirements financing amount arising at aerodromes Along with the widespreading of the understanding that the state is not always the best service provider, it has been started to be discussed that a more flexible administration may be established through the inclusion of the private sector in these services, which are conducted with the understanding of public service The comprehension that aerodromes may be converted into a trade or business center, the increase of the private sector s interest in these investments [10]. The methods chosen in order to ensure the efficient participation of the private sector

in the aerodromes is the tender method. The models of the tender methods applied in different manners used for the acquisition of aerodrome terminal buildings shall be dealt with in the next section. The tender method mentioned within time-bound privatization at the distinction of timebound and perpetual privatization [13] is the method mostly used in the acquisition of public services. In this method, the presentation of some public goods and services is assigned to the private sector by a contract. In the tender method, the relevant public institution ensures the conduct of the service by private firms instead of realizing it through its own organization and personnel [14]. That is to say, in the tender method the relevant public institution continues to provide the financing of the service and leaves the production work to the private sector [14]. The tender method is known as outsourcing in literature. In the tender method, entrepreneurs applying for service production, are establishments normally rendering services on the market and they are not linked to the local administration neither in legal nor economic terms [15]. 2.2.1. Benefits expected from public services acquisition models 28 The basic benefit of public services expected to be acquired by operation of the private sector is the decrease of operating costs based on efficiency and competition, and the increase of service quality. The expected benefits may be listed down as follows: The decrease of the investment and operating costs based on efficiency and competition The fact that due to the savings of resources acquired from the decrease of the operating costs, more resources can be transfered to the investments Decrease of the investment s finance costs due to the increase of equity Increase of service quality and rise of its level, consumer/subscriber/customer satisfaction Optimizatoin of the assets by ensuring regular and preventive maintenance in a professional manner and thus decrease of renewal cost Faciliating the passing over to assets management planning and quality management systems Increase of personnel qualification, ensuring work efficiency and optimization of personnel number. Forming a well-trained and professional personnel portfolio Estranging the enterprise from any political affects for the day, and thus to ensure its formation and being turned into an institution based on rational foundations Benefiting from the elasticity and speed of the private sector in investment and/or operation

Ensuring realization of technology transfer and innovations easily Preventing that public administrations loose time and energy with daily implementation problems of investment and operations, and ensuring that they focus more on their main duties related to the future. As a result, public institutions, whose material resources are not sufficient or whose material resources are sufficient, but who intend to spend these resources for other areas, choose the BOT model for the construction and realization of major projects and facilities. On the other hand, employers whose material resources are sufficient or who have the possibility to obtain any loan, choose classical tender methods such as turn-key for any investment and projects they wish to realize [16]. In the framework of these explanations, we may divide the construction models of Aerodrome terminal buildings into 2: A- The construction model which provides the construction financing from the budgetary resources 29 B- The construction model which provides the construction financing from out-of-budget resources AERODROME CONSTRUCTION MODELS CONSTRUCTION MODEL COVERED BY BUDGET RESOURCES CONSTRUCTION MODEL COVERED BY OUT-OF- BUDGET RESOURCES Figure 2.1. Aerodrome construction models Whereas the above mentioned construction models are subdivided into many submodels. But in the framework of the thesis, the models mostly applied in the acquisition of terminal buildings in our country have been considered at length.

2.2.2. Construction models which provide the construction financing from budgetary resources This model which is entirely provided by budgetary resources in the acquisition of public services, is the method mostly used in many service sectors in our country. Discussions are constantly made, both in terms of operation as well as regulation, on this model which is implemented by realizing hundreds of tenders for the provision of public requirements by means of the allocation of millions YTL from the budget every year. As a result of evaluations and discussions made over long years, the new public procurement law has been put into force on Jan.1, 2003. However, this law has also been confronted with criticism both in terms of implementation criteria as well as regulation. 30 In this model, the most efficient public purchase requires the selection of the interested party, who is able to provide the requested service in consideration of the lowest (optimal) price. Offering the lowest price, which has been the most important criterion in the law number 2886 for tasks until Jan.1, 2003, has ceased to be the most important criterion by the law number 4734 enforced after this date. 1. Determination of requirements/ Feasibility 6. Implementation C. CONTROL 2. Project Definition/Formation B. CONSTRUCTION A. PLANNING 5. Tender 3. Inclusion in Investment programme 4. Design Figure 2.2. Model phases

A. Planning A.1 Determination of requirements, Feasibility A.2 Project definition formation, A.3 Inclusion in investment programme, A.4 Design A.5 Tender B. Implementation B.1 Supervision and control B.2 Project revisions B.3 Progress payments. C. Supervision/Control 31 A. Planning A.1. Project Definition-Formation, Determination of Requirements During the phase of project formation, project ideas and other development-oriented actions are determined and the ideas requiring more work are selected. During this process of selection, the considerations of the sectors to benefit from the project are taken into account as well. The problems and potentials of the sectors supposed to benefit from the project are evaluated. As a result of these studies, it is decided whether it is necessary to make a more detailed study for each project idea taking into consideration both the requirements of the target group expected to benefit from the project as well as the guiding framework. The determination of project ideas ungoes a preelimination and an extensive and detailed project study (feasibility study) is commenced after the adoption. However, a pre-feasibility study has to be made prior to passing over to the preparation of the detailed feasibility study. Projects, which are selected as a result of the preliminary analysis of the pre-feasibility study prepared at the project preparation stage, are taken to the public project stock foreseen to be realized during the process of the development plan to be reviewed in more detail during the feasibility study, and are brought in to the annual investment programmes as per the starting years. Whereas projects for urgent requirements which may arise during the said plan period, may be included as study-project in order to ensure the preparation of the feasibility studies for

the annual investment programmes. During this process made by the State Planning Organization, views are exchanged with various participators in the framework of the development plan. The project s being oriented towards the real requirement, conformity with plan and programmes, efficient use of resources, project formation are evaluated as essential criteria. Upon the presentation of any projects, which are decided to be suitable, by the relevant establishment to the State Planning Organization as implementation project, the formation and preparation of the project is completed. A.2. Analysis 32 Project ideas, which have been chosen during the stage of project preparation and analysis, are converted into implementation-oriented project plans. At this stage, in the shaping of the project idea in detail, importance is given again to the participation of the target group to benefit from the project and of the other affected parties. Later on, the feasibility (in respect of whether it shall be successful or not) and the sustainability (in respect of whether it shall provide benefit to the target group on a long-term basis) of the project is analysed. As a result of these analysis, decisions are adopted in matters of converting the project into an official document and seeking for funding. Project analysis is a very important matter in terms of countries having aimed at planned development. The aim of project analysis is to ensure the efficient use of limited resources and a rational production of goods and services, because the preparation and evaluation of investments, which are indispensible for economic growth and development, or in other words, of investment projects, based on scientific foundations is the initial and basic condition of optimal use of resources. Just in this way, the realization of any results expected from investments is possible at macro level. Notwithstanding how good macro plans are prepared, it is not possible to reach macro plan targets with any projects which are well-prepared, but which shall be realized without being analysed accurately. Projects, which are analyzed by criteria such as profitability, productivity, efficiency, effectiveness, conformity, sustainability, are delivered to the deciding organs of the State Planning Organization after the realization of macro-technical-economical-social-environmentalcorporate and spatial analysis with all ministries, establishments and institutions. A.3. Inclusion in the Investment Programme Allowances shall be allocated according to sectoral, regional, etc. criteria among projects which have been found favorable as a result of the analysis, and they are ensured to be included in the investment programme. The determination of intersectoral public investment priorities is a quite diffecult task. In order

to be able to realize this, the well comprehension of the relation between sectoral investments and productions is required along with a great number and sufficient data. Along with this, the determination of sectoral priorities by means of detailed and complex estimate or analysis methods may cause misleading results. Therefore, political preferences play an important role in deterimining the sectoral priorities in many countries. However, prior to determining the priorities, cautionary information supported by serious technical analysis regarding the cost of alternative politics should be given to the parties adopting political decisions. In this context, the cost-benefit analysis is also very useful for determining priorities within the sector. B. Implementation During the implementation stage, the project is effectuated. During this phase, it may be necessary to rebid the contract for technical support, supply or construction activities. The comments of the project s target group and the affected parties are taken and the project management observes whether or not the project successfully advances towards the planned target. If considered necessary as a result of this observation evaluation made while the project is continuing, the project is reviewed and made into conformity with the targets. In cases where certain important changes are observed following the project preparation, it is possible to review certain targets of the project and adopt them to the new conditions. 33 B.1. Tender For tasks until Jan.1, 2003, the public procurement law number 2886 was applied. The relevant public unit determines an estimated value for the investment, and interested firms participating in the tender offer any price which is a certain percentage below or over this amount in their bids. The firm, who has offered the most favourable, i.e. the lowest bid in terms of the public benefits, is awarded the tender. In case of investments requiring equipment and financing power besides some extensive and technical specialization, the firms undergo a preliminary election, and a great, but a little lessened number when compared to the applicants, great number of firms participate in the tender. The firms desire to get over their temporary financing straits and consequently to get new work and obtain cash turns out to dominate, whereby the contract may be awarded not paying much attention to the long term destiny of the investment business. However, in this case, inevitable delays, the unability to fulfill the administration s requests for duration and quality arise, and the tasks may be wound up. In countries with high inflation economy, delayed work denotes to harmful and expensive work. Consequently, being awarded with a very low bid, causes investment and consequently service delay resulting from the tasks dragged on and wound up, and their turning out to be more expensive to the public due to the delayed realization. By the Public Procurement Law number 4964, which has been put into force on Jan.1, 2003, the problems having arisen with the former procurement law have been removed to a great

extent. First of all, the price principle determined by the state is given up, and the principle is adopted to cause the realization of the task by having the price determined based on the bids to be received under the market conditions. Whereas other important changes enable the development of the study-project and technical services. By this law, the understanding for tendering with the first draft is discarded, and the concept is adopted to tender with projects, which are well-prepared to the very detail and based on studies. In order to prepare the contracts well, it has been introduced to determine and define well the location lists, material to be applied and manufacturing of all kind of studies and implementation projects based on them, and the turnkey lump sum price procedure has been brought to construction tenders in order to avoid any future conflicts with the contractor, to prevent any price increase and to ensure the timely completion of the task. 34 There may not be made any bidding for any task, which doesn t have any allowance, and besides, for any tenders communicable to years, it shall be compulsory that their budget features any allowance to the rate the year of which is mentioned in the budget law, being not less than 10% of the approximate cost. Thus, it is prevented that it is impossible for tenders to be realized due to insufficiency of allowances and it is aimed at completing the public investments within the planned period. The tender method is a method which is applied in our country for years. By the Public Procurement Law number 4734 in force it is possible for departments included in the general budget, administrations with supplementary budget, the special provincial administration and municipalities to ensure tasks such as purchase, sale, service, construction, lease, transportation to be performed by the private sector by means of tender, and this method is stimulated in the development plans. According to the law, the methods used in the tender are divided into four parts. These are open bidding, bidding between certain interested parties, bargaining and direct supply. The relevant administration shall determine which of these methods shall be applied according to the nature of the task to be realized, by conforming with the provisions of law. The significance of the tender method in the conduct of public services is that it enables the benefiting from the competitive environment on the market. Thus, there is a competition, in terms of cost and quality, between competing firms in order to be awarded the contract. This is the basic point increasing the efficiency of the relevant public service [17]. The benefits of the Tender Method may be listed down as follows [18]. a) The tender method brings along with it competition and efficiency. The competition between the firms is the basic reason of the savings seen in the costs.

b) In case service is delayed or presented of low quality in the tender method, penal sanctions shall be applicable. The chance of the firm, who has been awarded the contract, to renew the contract depends on its performance in rendering the service. c) The tender method is more flexible in providing for the citizens needs. The removal of serious bureaucratic hindrances makes the presentation of service for efficient. d) It prevents the increase in state s permanent staffs. (personnel requirement) e) It ensures that the state withdraws from the production sector and fulfills the supervisory function. The success of the tender method depends on the accurate calculation of the estimate value and the degree of competition of the said service on the market. There are also some unfavorable aspects of the method. These may be listed down as follows: a) Especially bidding agreements made beyond the public s cognizance, harm the transparency of the task. In order to prevent this, tenders have to be made in an open manner. 35 b) Private firms generally employ unqualified workers and keep the workers s wages low. c) In case all of the services are awarded to the same firm, certain objections may arise as well. For instance, the bankruptcy of the said firm may cause the delay of the service s performance. d) As a result of the fact that complete supervision cannot be provided at the stage of bidding, there is the possibility that firms reach an agreement among themselves, and consequently entire competition cannot be ensured. e) The fact that firms, who fulfill the conditions in procedural terms, but who are weak in qualitative and financial terms, are awarded the contract, and that consequently the administrations are unable to ensure high quality work or that the work cannot be completed on time f) Losses resulting from disputes between the contractor firm and the relevant institution due to any articles, which have not been well-defined in the contract and the specifications. g) Since its funding is provided from the general budget, losses resulting the increase of costs due to the fact that allowances cannot be fully provided and the task lengthens, as well as losses resulting from the fact that, consequently, the facilities are unable to be put into operation. The problems, which we have tried to explain briefly above, are of a type that can be

easily removed by taking the necessary measures. For instance, in order to get over the problem mentioned in the last article, the presentation of services may be awarded to several firms instead of just one firm. Likewise, the excess of personnel arising as a result of the tender may be commissioned in other units. Prior to passing over to applications made with this model and to its evaluation, it shall be useful to take a look at the definitions of the procedures defined by the law number 4734 [19]. The aim of this Law is to determine all principles and procedures applicable for tenders which shall be realized by all public institutions and establishments being subject to public law or under the supervision of the public. 36 A short review of the terminal buildings, the construction value of which is covered from the public budget and which are made by the Public Procurement methods, shall be realized in this section. In this framework, a short explanation has been made of the tender methods, which are included in the law number 4734 and by which airport terminal buildings are built. The mostly used tender method is the open bidding. The method of bidding between certain interested parties as well as the bargaining method are also methods which might be used even if rarely. Methods of Tenders [19] Table 2.1. Methods of Tenders Open Bidding Method Method of bidding between certain interested parties Bargaining method Procedure enabling all interested parties to bid Procedure enabling any interested parties, who are invited to bid as a result of a prequalification evaluation, to bid. The tender of construction works where the open bidding method is not applied due to its complexity and/or requiring advanced technology, can be made according to this method. a) No bids resulting from the tender realized by the procedure of open bidding or the procedure of tender between certain interested parties b) The realization of the tender being compulsory to be made urgently upon the occurance of unexpected (natural disasters, etc.) events c) The unability to determine the technical and financial properties as required, due to fact that the procurement of goods and services as well as construction works subject to the tender are of original nature and complex.

37 The terminal buildings, which have been made in accordance with the unit price principles until the year 2003, have been awarded by first draft. The construction of these works, which have been tendered with quite high discounts, has extended over long years. The extension resulted from the occurance of unexpected manufacturing during the stage of construction due to the fact that sometimes sufficient allowances were not provided for in the budget and sometimes the first draft has been taken as essential. The more the time of the construction stage was extending the more the cost of the work was naturally increasing. Along with the constantly increasing costs, the public suffered loss due to these facilities being opened to operation late. The GAP (Southeastern Anatolian Project) International aerodrome and its terminal building, the construction of which has started in 1997 and which could still not be completed as per the end of 2005, represent a good example for this. On the other hand, tasks, which are obtained with high discounts, without having realized the necessary feasibility studies, sometimes result in the bankruptcy of the firms undertaking the construction. It is not considered as a surprising circumstance that the work cannot be performed in a sound manner with these discounts of up to 60%. In our country, which has been under the pressure of high inflation during those years, there have also been quite high increases in the construction costs as well, and there have been high increases in the costs of the construction works spread over the years. This circumstance has formed a loss for any firms having obtained any task with high discounts, and at the same time, the public was constantly suffering loss due to the permanent increase of the construction costs.

38 Along with the new tender method starting with the year 2003, construction works have been started to be realized with the implementation projects having been prepared. Along with this law, it is also prevented that works, which are not provided with sufficient allowance in the budget, are tendered. Tasks, the projects of which are prepared in a realistic and implementationoriented manner, and which feature sufficient allowance in the budget, are built faster and without the costs increasing more than foreseen. To exemplify the aerodrome terminal buildings, the construction financing of which is provided for by the budget: The tender of the Denizli Cardak aerodrome was realized in 1997 and could not be completed despite many estimate increases. The work has been wound up and the put out for tender again in 2006. The GAP International airport was tendered in 1997 and is declared to be completed as per the end of 2006. Despite the fact that the tenedr of the Gaziantep Airport terminal building was realized 1996, its opening could be realized in May 2006 following the winding-up of the task in 2003 and its retender. The tender of the Erzurum aerodrome has been realized in 1997. The work has been wound up in 2001 and put out to tender again. At the end

of 2005, it has been opened to service in May 2006 with corporate means since it could not be completed by the firm at the end of 2005. The Diyarbakır Aerodrome terminal building (7800 sq.m.) has been tendered in 1997 and put in commission in 2001. The Isparta Süleyman Demirel Aerodrome terminal building (6000 sq.m.) has been tendered in 1993 and put in comission in 1997. The Bodrum Airport has been tendered in October 1997 and has been opened in July 1999. When we jointly consider the construction processes of the aerodrome terminal buildings, some of which have been stated above, the following results are achieved. The planning stage of these investments, which have been made with the public procurement law number 2886 and the financing of which is covered by the public resources, comprises quite long and sometimes complex processes. In this model, where many parties are decision making authorities, there are long time periods at the planning stage. Generally, some of their stages take months. The project s inclusion in the investment programme and receiving a share from the budget after the project s formation and definition includes various bureaucratic difficulties. It is known that the implementation for long years of certain public investments, which have to made urgently, cannot be realized since they don t have a sufficient share from the budget. 39 Projects considered appropriate to be included in the investment programme as a result of innumerable negotiations after having passed many revisions between the State Planning Organization and investor establishments, have to feature a sufficient share from the budget to enable their implementation, which may not always be possible. Whereas the application chances of projects, the preliminary feasibility reports of which have not been prepared in a healthy manner, in this long-lasting process is weaker. However, by means of the new public procurement law number 4734, many of the said negativities are prevented. The tender of works, which don t have any or sufficient allowance, is not possible. Sufficient share is allocated from the budget to investments, the feasibility and implenetation projects of which have been made in a healthy manner. Even though this tender law shall removed many negativities, the objection by interested firms to the results for simple reasons

while the tender process is continuing may extent the completion of the tender process to up to 1 year and may sometimes cause its cancellation. It may be inevitable that aerodrome projects, which are applied by the Directorate General of the State Airports Administration, who doesn t have any difficulty in sourcing projects due to being a profitable State Enterprise (K.I.T.), are confronted with the same difficulties in the long-lasting planning process. The urgency of the construction of the aerodrome terminal buildings sometimes gains so much importance that even some months to be lost may cost hundredthousands of Dollars to be gained during the operational period. 40 It is seen that both the planning as well as the tender and implementation stages of these constructions, the financing of which is covered by the budget, take a long process. It is seen that at the end of this long process, the technologies of some terminal buildings grow obsolete prior to being put in commission. Consequently, terminal buildings can remain insufficient due to insufficiency of capacity starting from the first moment is is put in commission in terms of passenger traffic constantly increasing as a result of both the obsolete technology as well as the extension of the construction period. These matters, which leave the investor establishment confronted with many problems, may be permanently experienced in the model where the financing is provided for by the budget. A detailed description related to the operation of the construction model, the financing of which is provided for by the budget, is shown in the following diagram. In this diagram, all stages have been attempted to be described by reviewing the construction processes of the aerodrome terminal buildings, the construction of which has been realized up to date. 2.3. The Build-Operate-Transfer Models for which the Construction Financing is Covered by Out-of-Budget Resources In the recent years, searches made for the financing of great and slow-return infrasture projects, has led to the widespreading of an implementation type, the foundation of which has been actually laid in France more than hundred years ago in the form of concession agreements, which is called Build-Operate-Transfer (BOT) and which has several variations (Build-Own- Operate-Transfer; Build-Own-Operate; Sell), domestically and abroad. In the implementation of the said model, the administrations also undertake the construction and operation of a certain task as well and give them to entrepreneurs who shall provide for their investment and obtain profit with the income to be obtained from the sale of the product or service to be obtained. Thus, the entrepreneurs put their monetary and technological means to use, the administrations realize a certain construction work without forcing their material means, and on the other hand, users reach facilities ensuring an improvement in their living standards [20].

The build-operate-transfer model is a method used in countries, where the free market economy has not been entirely formed, in order to encourage private entrepreneurs. The basic aim of this method is to open certain services, which require great capital, to foreign capital especially in terms of countries suffering capital shortage. Thus, this method also encourages the entry of foreign capital into the country. In fact, the magic part of this model is that the investments and services, which have to be done and fulfilled by the public respectively, is made by the private sector in the framework of a contract through this model, and that they are, in consideration thereof, operated for a certain period by the private sector realizing the project for profit purposes, and that they are ultimately transfered to the relevant public administration [21]. It may be stated that the BOT model constitutes to a large extent an alternative to the use of foreign projects in the financing of infrastructure investments required to be done by the public [22]. This financing facility provided by the BOT model in the realization of infrastructure investments has caused it to be adopted easily in third-world countries [23]. Moreover, in the investment policies of the State Planning Organization [24], in the last VII. Five-Year Development Plan it is declared that the usage of the BOT model shall continue in accordance with the spirit of this plan [25]. 41 This method, which doesn t feature any fiscal burden to the public administration in terms of its forming its resources itself, is a kind of privilege. The system is based on the principle that a service unit is established on the real estates of the public by any private person(s), that it is operated by private persons during the periods determined in the contract and that at the end of the period the operation passes over to the public administration with all kind of its assets past consideration. The BOT model is essentially requested to be used in the realization of the financing of the public infrastructure projects. There isn t any guarantee or undertaking of the Treasury for the repayments of principal and interest of foreign credits brought in in the framework of the BOT model. The BOT model is conducted in Turkey in the framework of implementation agreements (CONCESSION CONTRACTS) made between the parties. In these agreements, one party is the public institution or establishment and the other party is the private company liable of realizing the project. Models similar to build-operate-transfer may be listed down as follows. d) Build Own Transfer e) Design Build Operate Transfer

42 f) Build Own Operate Sell g) Build Own Operate Transfer h) Design Build Finance Operate Whereas, the models similar to the BOT which are used for the construction and operation of aerodromes may be listed down as follows: 1. Buy Build Operate (BBO): The private company buys the existing aerodrome from the state. It makes and operates the necessary investment. It is appropriate for less developed airports. 2. Build Own Operate Transfer (BOOT): The difference in comparison to the buildoperate-transfer model is that during the operational period the aerodrome property is owned by the private company.

3. Build Transfer Operate (BTO): The private company transfers the property after having completed the design, building and financing, and afterwards long-term rents from the state are prefered for certain tax advantages. 4. Partial Financing (WA Wraparound Addition): The private company finances a certain part of the airports service units such as the terminal or the parking garage. 5. Let on hire Develop Operate (LDO): The private company hires the existing aerodrome from the state on a long-term basis, and operates it by making a profit sharing agreement, whereby the property remains with the state. 6. Management Partnership: The aerodrome s property remains with the state, but the participants of the parent company shall be in charge of the management as well. The state has to invest again, whereas the economic risks are shared among the partners. The notion of realizing an investment by the Built-Operate-Transfer model has entered the Turkish economy in the mid 80 s as a new method of ensuring the fulfillment of work, and to a certain extent with the purpose of removing the circumstances of delay and uncertainty in these classical tenders. 43 While the BOT model was not in a much widespread period in 1986, it has been adopted by the State Airports Administration in a manner as to be used in significant public investments. Here, the fact that the financing to be used in the construction of the project shall be undertaken by the bidding firms, provided that it is deemed appropriate and approved by the relevant public units, has been considered as another time-making advantage. Even if these international investment credits are provided by firms, they are conducted as part of the general international financial-economic relations balance of the Republic of Turkey. In the BOT projects, there aren t used any loans of great number and of excessively high amounts. While international loan associatons accurately evaluate the income-expenses balances of Turkey; it takes care of similar attention and sensitivity to be shown in the public institutions. It is seen that the aerodrome investments during the late 80 s and early 90 s focus rather on the development of existing aerodromes standards than the construction of new aerodromes. In the late 80 s, the construction of small aerodromes of Stol type has been started with the contribution of local administrations to various regions, and the preparations for opening military aerodromes to civil aviation have been given speed. It is seen that the total arriving-departing passengers and airline traffic increasing steadily from year to year, has focused mainly in the Atatürk Airport and also in the Antalya, Esenboğa, Adnan Menderes airports and gradually in te Dalaman and Bodrum Airports [26]. The facilities existing on these aerodromes remained insufficient for a transportation

44 infrastructure of international intensity. The İstanbul Atatürk Airport represents the most intense point of the international commercial, financial, tourism connections, and the passenger, aircraft intensity was increasing rapidly. Whereas the Antalya Airport was the most intense point of touristic travels. Due to their above mentioned significant positions, it has been necessary to renew the existing facilities on the Atatürk and Antalya Airports, increase their capacities, and make them reach the efficiency of responding to today s technology and requirements. Taking into consideration all these developments, the construction of the Airport terminal buildings, which has become necessary to be made by the BOT model, which requires great funding and is consistent with our age s technological developments, has been realized and the implementation of some of them has started in the recent years. The Ministry of Transport of the Republic of Turkey, the State Airports Administrations (DHMI), as public institution in charge, had intensified its enterprises in this direction starting with the mid of the 80 s. After having passed various concept maturity, technical and bureaucratic preparation stages, the extension and development project of the existing facilities on the Antalya and İstanbul Atatürk Airport has been started to be realized in 1997 [27]. And as per 1998, these projects have teemed and the Antalya Airport International Terminal (Photo 2.4), later on the İstanbul Atatürk Airport (Photo 2.5) new international terminal building and the multi-storey parking garage building, which is an important complementary facility, has been put in commission. As an implementation example realized for the first time in the civil aviation sector in Turkey;

the Antalya Airport New International Building with a capacity of 5 million passengers/year, the construction of which has been realized in the framework of the Build-Operate-Transfer model, has come into service on March 31, 1998. Thus, the terminal building, which has an annual capacity of 5 million passengers, equipped with electrical, electronical and mechanical systems of up-to-date technology and which comprises all kind of contemporary service facilities, has been brought in to the Antalya Airport. The works of bringing in a new terminal building to the Atatürk Airport, which is operated by the State Airports Administration and which forms the most important gate of the country, by the Build-Operate-Transfer model have been completed and the opening has been realized on January 3rd, 2000. Upon the Antalya Airport s 5.000.000 passenger/year capacity terminal building s remaining insufficient, the construction of the 2 nd module international terminal foreseen in the master plan has started in 2004. Again, project competitions have been organized for Esenboğa, Bodrum, İzmir-Adnan Menderes during the year 1998, and for the Dalaman Airport International Terminals in 1999, and thus, an important step has been taken for the modernization of our above mentioned important points in international air transport. With the tenders realized in the year 2003 and 2004, the construction of the terminals except for the Bodrum airport has started. (ANNEX-1) The tender made on August 16, 2004 for the İzmir Adnan Menderes airport new international terminal ve multistorey parking garage project has been awarded to the Havas Yer Hizmetleri A.Ş. Bayındır Holding joint venture corporation having bid the shortest run of 6 years 7 months 29 days. The ground delivery of the project, which had an investment period 45

46 of 24 months, could be realized in May 2005. It is planned that the terminal, which features an investment amount of 125 million Euro and the construction of which has started in July 2005 shall commence operations in August 2006. The terminal area consists of 170.000 sq.m. and 75.000 sq.m. parking garage.

The Esenboğa new domestic-international terminal and multistorey parking garage project: The tender dated April 12, 2004 has been awarded to the Tepe-Akfen joint venture having bid the shortest run of 15 years 8 months. The terminal featuring an indoor space of 145.000 sq.m. includes a parking garage of 105.000 sq.m. The investment period of the project, the construction of which has started on September 24, 2004, is 36 months. It is aimed at commencing the operations of the facility amounting to 188.7 million Euro in October 2006. The Dalaman Airport new international terminal: put out to tender on December 3, 2003. The Aksa-Turkuaz-Manas joint venture has been awarded the contract with a bid of run of 6 years 5 months 20 days. The facility, the construction of which has started on July 29, 2004, shall come into service in June 2006. It includes a terminal building of 85.000 sq.m. 47

3.THE BUILD OPERATE TRANSFER MODEL The BUILD-OPERATE-TRANSFER model has been introduced especially as a new model for the realization of infrastructure investments in developing countries per the private sector. It was in 1984, when Turkey to a certain extent met with this model again. 48 The BOT model is defined in the article 3/a of the Law number 3996 and in article 3/b of the Cabinet Decision number 94/5907 as follows: It is a special financing model developed to be used in the realization of projects requiring advanced technology and high material resources, and the payment of the investment amount (including the profit to be gained) to the company through the purchase of any goods or services produced by the company during the operational period, by those benefiting from the management or service [28]. In the broader sense, the BOT model may be defined as the realization of a public structure, investment or service through the financing by a private company and its operation by the latter for a period determined by the public, and its selling to public institutions any goods or services, which the it has produced during this period, pursuant to a tariff mutually determined by the parties, and its transferring the facilities, which it is operating, in a well-maintained, complete and functional manner, to the public institution at the end of the period [29]. Again, according to another definition made based on contracts executed, the BOT model is a regime where any public service or activity or public works are prepared as project, financed, built, protected by realization of an investment based on a fixed amount, all expenses being provided for by a private enterprise, under the guarantee that the country purchases the goods or services produced, and which ensures the transfer and delivery to the relevant public institution or establishment of the facility and management at the end of the period upon amortization of the capital invested and realization of the profit through its operation for a certain period [30]. 3.1. Characteristics of the Build-Operate-Transfer Model [29] The main characteristic of the model is to solve the problem of financing required by certain public structure investments and consequently to ensure the realization of the investment. The reason for the model s emergence is essentially the public s financing straits. By means of this method, the financing straits is overcome in the investment period and the financing is realized

by being spread over time, through the consideration taken from the users for any goods or services produced during the operational period. Along with focusing essentially on the public s financing straits in terms of benefiting from the model, the increase of service efficiency per the private sector in view of the public establishments failure to function efficiently, has also arisen as a reason. At the same time, the fact that the private sector brings in advanced technology for this kind of projects both at the stage of investments as well as operation increases the project s production, service efficiency with the concept of efficient operation and management. The functioning of the BOT model is not only limited to new investments. Reference may be made to this model for complementary investments or renewal investments as well. The model is applicable for new investments as well as for the renewal of existing facilities, which have fallen behind in terms of technology, or for the completion of unfinished investments. BOT models are conducted in the framework of implementation agreements (CONCESSION CONTRACTS) made between the parties in Turkey. In these agreements, one party is the public institution or establishment, whereas the other party is the private company in charge of realizing the project. One party of the contract is the public institution or establishment. Whereas on the other hand, there are consortiums which generally include international establishments as well. 49 In order to realize the investment, sponsor companies establish a separate company (Project company joint investment company or project company) the subject of activity of which is to realize the relevant project. If requested, the public may also participate in the established company with a limited capital share. At the end of the contractual period, the facility shall be transfered free of charge to the state or any establishment deemed appropriate by the state, free of all kind of liabilities and committments in a sound und functional condition. Whereas prior to the end of the contractual period the same liabilities shall be applicable as well (except for force majeure) [31]. 3.1.1. The parties There are many parties in the realization of the investment projects by the BOT model. In a typical BOT project there are, for instance, the host country, the state establishment holding the position of the project s holder, lending establishments, insurance establishments, technical, financial and legal consultants, the company to realize the project (Joint-Venture Corporation) and sponsor firms. In the build-operate-transfer model, there is a system established with the relation of many parties in comparison to other construction models. The number of contracts regulating the relations between these parties is quite high, and even though the parties and the number of contracts varies according to factors such as the structure, magnitude of the project, the parties

and contracts existing in most of them have been briefly described as follows. (Figure 4.1.) The host country is the country where the project is realized. It denotes the establishment in charge of the project, the State establishment (administration), the joint investment company as well as the institution executing the implementation-concession-contract. The joint-venture company denotes the company, which has been founded by the companies realizing the investment, pursuant to the concession contract in accordance with the country s law. The Investor Banks are the banks providing the financing of the investment. These banks are defined as lending establishments and loan agreements are made with them. Joint investment company holding parent companies (sponsors) are companies who establish the joint investment company in the framework of the concession contract, who have come together in the framework of the agreement and have a separate legal personality. 50 Apart from these; parties such as the Trustee Bank, Export credit banks and export insurance companies, subcontractor firms, insurance companies, consultancy firms, standby credit and bridging loan banks are components in the operation of this model. In the BOT model, an international consortium bidding for a certain project designs the project, ensures and assures the financing necessary for the construction, builds the project in the host country and operates it throughout the duration stated in the contract. The realization of these procedures requires a quite complex structure. In a BOT project, there are many parties and more than one contract regulating the relations between these parties [32].

Host Country Technical, Financial and Legal Consultants Project Agreement State Establishment Private Agreements Construction Agreement Firms being Party to the Contract Joint-Venture Company Procurement Contract Suppliers Lending Establishments Insurance Companies Loan Agreements Insurance Policies Operational Contract Firm to operate the investment for a certain Period Agreement made with Shareholders Sponsors 51 Figure 3.1. Structure and operation of BOT projects [33]. 3.1.2. Expectations of the parties in the Build-Operate-Transfer model The Public (User) Ability to render the service Provision of permanence of the service Increase of service efficiency Increase of service quality and variety Protection of environment and community health Optimization of service tariffs Public Administration Provision of investment and investment funding by out-of-budget means Convenience, permanence and efficiency in the performance of legal duties Decrease and keeping under control of operational costs

52 Ability to reserve more equity for investments Decrease of financial costs Ensuring regular and preventive professional maintenance of the assets Optimization of life-span of assets and decrease of need for new investment Decrease of management burden of the business and focusing on essential duties Benefiting from the elasticity and speed of the private sector Easy realization of technology transfer and innovations Operator and/or investor Profit (anyone who cannot produce profit in the private sector cannot sustain itself and cannot produce service) Ensuring customer satisfaction (Public institution and consumers) Increase of competitive facilities (technological, corporate and organizational development) Becoming trademark and increasing esteem Increase of business volume and ensuring its permanence 3.1.3. Advantages and disadvantages of the BOT model The results obtained upon review of the model s advantages and disadvantages are as follows [34]. Advantages of the Model a) Creating new and additional financing resources (Financial Additionality): One of the model s most important aims brought forward for developing countries is to increase the foreign capital entry to the country and to able to benefit from its influences on the economy. In this framework, it is suggested that the BOT model gives the opportunity to realize any projects which shall not be able to be realized otherwise. b) Advanced Technology Transfer and Training: In case projects requiring advanced technology are realized per foreign companies, advanced technology shall enter the country. Likewise, in case of a BOT project, there shall also be a training programme to be presented regarding usage prior to the transfer of the facility. Therefore, possibility is also given for the training of the employees. c) Efficiency: It is suggested that the private sector may make a better evaluation in terms of the realization of which project would be more feasible, and that it shall realize the project s design, building and operation more efficiently, and it is considered that the economic efficiency shall thus increase.

d) Measure of Evaluation (Benchmark): As an extension of the property mentioned in the previous item, a project conducted per private sector may be used as a measure in terms of evaluating the efficiency of similar projects available with the public. e) Decrease of Public Share in Infrastructure Investments: Thanks to the model, the state shall get away from the financial pressure regarding the realization of infrastructure investments, this circumstance shall have favorable influences on the budget. f) Privatization: The BOT model shall also be an important step made towards privatization of some activities traditionally conducted per the private sector. However, taking into consideration that the facilities shall be transfered to the state at the end of the contractual period, it is not possible to speak entirely of a privatization. g) Faciliating the Choice Between Investments: In the BOT model, the state, in a sense, assigns the task of evaluating the projects, which are presented to it and among which it has to choose, to the private enterprise, and thus, the private sector realizes the project that is most appropriate in economical terms by the profit maximization criteria. Disadvantages of the Model 53 a) Requiring a Complex and Long Process: The model features a quite complex and sophisticated structure. Many parties have to negotiate and reach an agreement on a great number and variety of documents. Whereas this takes a certain time, money and requires that people trained in this matter concentrate on this matter. b) High Costs: The second criticism made regarding BOT is that the cost of any project realized by this model is higher in comparison to any project realized by budgetary or credit means. Especially in case where a certain profit yield is given and goods and services are priced on the cost+profit basis, there is the probability that investment and operational costs are kept as high as possible. It may be expected that this model is more expensive than any investment to be realized by means of domestic and foreign resources to be provided by the public by its own means. It shall be strived for obtaining the profit, which shall be gained both at the investment stage (Contracting services) as well as at the operational stage (as Operator), at the top points. The ability to draw this profit to a reasonable level is closely related to the skill of the team conducting the negotiations in the public. c) Excessive Sensitivity to Political, Economical Stability: Another disadvantage of the model is that the investment to be made reaches very high amounts, that its return is long and that due to the fact that the other party in the contract is the public administration, especially foreign capital shows very much sensitivity regarding political and economical stability for making an investment.

d) Eddy/Tornado Effect: In case any of the decisions adopted at any stage unfavorably affect the decision of any party, this circumstance does also affect the other parties in the same way and the negative effects gradually increase and even prevent the realization of the project. In order to avoid this circumstance which is called the eddy effect, it is necessary to ensure that the other parties also contribute to the decisions favorably at every stage, what causes the above mentioned delay [35]. 3.1.4. Purposes of implementing the Build-Operate-Transfer model a) Decreasing the financial burden in the public s infrastructure projects and thus to increase the public productivity, b) To make the country gain foreign financial resources, advanced technology, know-how and experience accumulation in terms of the project. To provide new enterprise and profit areas and to make contributions to the public finances by forming tax assessments, 54 c) To remove any probable need for foreign borrowing in the said investment areas and thus not to increase the country s foreign debt burden, d) To bring in management efficiency, responsibility, timing, total quality concept and standardization properties to the public sector regarding profitable and efficient private sector operations especially as a result of cooperation and joint ventures, e) To make a favourable contribution to the policies of narrowing the public share in economy and increasing the efficiency and productivity of public resources, along with the privatization model, to use the BOT model as an indirect privatization method, f) To make a favourable contribution to the employment problem, which the labor-intensive capital preferences could not solve for years, by technology-intensive capital [34]. 3.1.5. Problems related to the operation of the Build-Operate-Transfer model [34] Technical Problems Generally, the feasibility reports (comprising also technical reviews to a certain extent) are given to entrepreneurs, who wish to make any investment in the framework of this model, during the tender stage by the relevant public institution. The better these reports are prepared, the less the contracts, which shall be built on them, shall create any problems in the future and the more they shall be reports not leading the parties to disputes. It is clear that if these studies are reported without being made very well, they shall be accompanies with great problems. The entrepreneur has almost not the chance to study the technical data of the feasibility report in the limited period during this tender stage.

Economical and Financial Problems The basic problem is to find financing for projects put out to tender. In other words, to find, to ensure the coming up of entrepreneurs (generally foreign) to realize the projects. This is to a great extent directly related to the political and economical stability of Turkey. Another problem is that, since qualification is a precondition in tenders, many domestic firms and especially contracting firms, domestic firms having applied to these tenders and having been awarded the contract, have been seeking foreign partners and this has mostly remained as symbolic partnerships on paper, and the targeted operational experience has not been transfered. 3.2. Factors in Choosing the Build-Operate-Transfer Model By means of this model, it is aimed at realizing extensive investment projects such as tunnels, ports, power plants, barrages, waste water clarifying plants, natural gas and oil pipelines, aerodromes, motorways. As is known, the development of developing countries depends on investment, whereas investment depends on resources which may be allocated for this purpose. In developing countries there is straits of resources, mainly of investment capital, and consequently the resources available have to be directed to investments in a planned, programmed, balanced and rational manner. Therefore, in countries and in our country, where public resources are insufficient, the BOT model is considered as a suitable solution. 55 In investments projects to be realized by the BOT model, there are many factors providing the contribution of foreign capital by international establishments and the private sector. In the BOT model; the fact that the increase of population and economic growth constantly give rise to the need for additional infrastructure investment and that it is difficult or impossible that these investment projects can be realized by public resources, that there is an intensive competition between manufacturers and commission houses active in the energy and transport sectors, that the private sector discipline and dynamism is also formed in public sector investments, that the business volume of international contractual firms has narrowed, as in the early 80 s, etc. factors are stimulating participation. The Build-Operate-Transfer model is an important financing model used in the realization of infrastructure investments. The BOT model is rather used in underdeveloped and/or developing countries where the public resources are insufficient, where there is financing straits in investments foreseen to be made. The most important characteristic of the model is that investment requested can be made with out-of-budget resources. The BOT model requires the gathering of many parties depending on the structure of the project. Consequently, subjects such as the relations between the parties and division of labour are ultimately significant for the successful conduct of the project.

56 Factors such as the magnitude of the amount of the investment to be made, finding the financing resources of the project, the completion of the investment on time and the high rate of borrowings give rise to certain risks in terms of the parties in the realization of the BOT projects. Therefore, while evaluating the BOT projects, any risks probable to be encountered should be analysed in detail. These may be outlined as follows [36]: Nature of the projects to be made Realization of the projects based on the foreign currency Cost of the project Determination of the price of the goods or products to be produced Uncertainty in obtaining the revenues requested Political and economic conditions of the country in which the investment shall be made Financial risks Inflation risk Interest rate risk Foreign exchange risk RISKS ENCOUNTERED WITH THE BOT MODEL Risks Related To Activity Market and Revenues Risks Political Risks Construction and Completion Risks Financial Risks Legal Risks Figure 3.2 Risks encountered with the BOT model [37] 3.3. Operation of the Build-Operate-Transfer Model The Build-Operate-Transfer (BOT) is considered as an important project financing model used in the realization of infrastructure investments. The model has been rather developed for the purpose of providing means for the realization of any large-scale investments required, by using resources to be provided by the private sector and international establishments, by means of out-of-budget resources, in the realization of projects aiming at the cooperation of the public

and the private sector, in underdeveloped and/or developing countries with insufficient public resources. By means of this model, it is aimed at realizing large scale investment projects such as tunnels, ports, power plants, barrages, waste water clarifying plants, natural gas and oil pipe lines, aerodromes, motorways, etc. As is known, the development of developing countries depends on investment, whereas investment depends on the resources to be allocated for this purpose. In developing countries, there is straits of resources mainly regarding investment capital, consequently the resources available have to be directed to investments in a planned, porgrammed, balanced and rational manner. Therefore, in countries and in our country where public resources are insufficient, the BOT model is considered as a suitable solution. There are many factors providing the contribution of international establishments, private sector and foreign capital to investment projects to be realized by means of the BOT model. In the BOT model; the fact that the increase of population and economic growth constantly give rise to the need for additional infrastructure investment and that it is difficult or impossible that these investment projects can be realized by public resources, 57 that there is an intensive competition between manufacturers and commission houses active in the energy and transport sectors, that the private sector discipline and dynamism is also formed in public sector investments, that the business volume of international contractual firms has narrowed, as in the early 80 s, etc. factors are stimulating participation. There are many parties in the realization of investment projects with the BOT model. In a typical BOT project there are, for instance, the host country, the state establishment holding the position of the project s holder, lending establishments, insurance establishments, technical, financial and legal consultants, the company to realize the project (Joint-Venture Corporation) and sponsor firms. The operation of the BOT model is shown in the following diagram.

Forming Evaluation Criteria Evaluation and Commissioning Determination of Needs Announcement Forming Working Scheme Preliminary Financial Structure Delivery off Bid Summary Negotiation of Purchase Contract Beginning of Construction Time Schedule Potential Bidders Preliminary Drafts Regarding Turnkey, Operation and Maintenance, Raw material Agreements Negotiation of Supplementary Provision of Financing 58 3-6 months 6-12 months 2 mon. 2-3 mon. 2-4 mounts 2-3 mounts Figure 3.3. Actual operation of the BOT model providing the financing from out-of-budget resources [35] 3.4. Tender Evaluation in the BOT Model Since the said method adopts the aim of speeding up for grand and special public investments, the elements forming the basis of the tender decision should have been associated with the concepts of speed and time as well. The relevant public units have, in the investment of extending and developing the Airport terminal buildings, both assumed the period of competing the investment and putting the facility in commission as a factor as well as considered the operational period prior to the delivery of the facility by the investing group to the public as basic distinctive element. Therefore, the guaranteed passenger numbers, the incomes left and the period of construction have been shaped accordingly. The contractual articles having foreseen the inclusion of the period, yield from the period of construction, to the operational period have been a basic parameter for the firms having participated the tender and been awarded the contract. In this framework, the period of the investment s realization has been determined by the Administration as reasonable, but as short as possible. On the other hand, the period during which the group, who shall be awarded the contract from among the participants and who shall realize the investment, shall operate the facility on their own behalf after the end of the constructional period has been determined as a basic parameter of comparison. In order to stimulate and encourage the rapid

realization of the investment, it has been foreseen that in case the task is completed and the facility is put in commission earlier, this period gained shall be added to the operational period bid by the investor during the tender. This concept has resulted in the emergence of rational, practical and meaningful bid evaluation criteria. The incomes left to the contractor firm and the guaranteed passenger numbers have been important elements influencing the firms bids. In the contractual specifications these matters have been explicitly determined. Another important matter effecting the tenders was the necessity that the building firms have had a similar operational experience before. This has brought with it the joint venture consortium with foreign aerodrome operating firms. 3.5. Framework of the Concession (Implementation) Contract The framework of the Concession Contracts mainly consists of the following items: The parties, subject of the contract, its duration, general principles of the investment and services, standard and quality of the goods and services, determination of the financing charge, commissioning, acceptance and business operation date, delay and cost variatons in the completion of the task during the investment period, nationalisation, guarantee, monthly and annual activity reports, supervision, security, safety and environmental measures, force majeure, insurance, maintenance and repair, assignment of duty, termination, transfer of facility at the end of the period, transfer prior to the end of the period, credits, responsibility and compensation, administrative fault, training, applicable law and settlement of disputes, contractual expenses, notices, language of the contract, amendments in the contract, other contracts, other matters, enforcement date of the contract. 59 As parties in the concession contracts, the ministry or any establishment associated with the ministry or any municipality denotes the administration, whereas the company commissioned denotes the contractor. The subject of the contract is the preparation of the project of the facility and its supplementaries (supplied parts), their construction, the building of all technical installations, their operation and transfer in accordance with the contract. Principles of the investment and the service as well as the total investment amount and the standards of the goods or services to be produced are included in the contract. Along with determining the form of financing the investment, increases required in the financing parallel to the increase occuring in the investment amount, the administration s approval of the credit conditions, the agreement of the administration in the determination of the operational capital and similar matters are included in the relevant articles [38].

1.9. Matters to be Taken into Considerationin the Financing of BOT Projects Economical Sustainability of the Project The economical sustainability of the BOT Project should be proved to the potential investors and creditors. That is to say, the project should be able to produce income in a proportion ensuring the repayment of the earnings yield to be provided in consideration of the principal and interest payments of the credits obtained, the equity and equity return. Since the income to be obtained from the project should be at a level sufficient to provide for the project s debt service, the total cost of the project should be estimated and assurance should be given to the creditors as well as the investors that the project shall be realized and operated as planned [35]. Cost of the BOT Projects 60 The most important matter to be taken into consideration in the framework of this Model is the determination whether the cost of the BOT project is higher than the project cost financed by the state by means of direct borrowing, whether this cost to be used is reasonable in the framework of the project which is inapplicable due to budgetary impossibilities. If as a result of the analysis it turns up that the model s cost is high, its charge shall be paid by the state and the final users [39]. 3.7. Components of the Total Investment Cost in BOT Projects Despite the fact that cost items vary according to the characteristics of the projects, it is necessary to determine the cost items of an infrastructure project and, as a result of this, the total investment cost. These cost items are as follows [5]. Cost Items Construction Expenses First Draft and Final Project Expenses Machinery and Equipment Expenses Project Preparation/Coordination Total Construction Cost Consultancy and Control Services Management Expenses Insurance Expenses Total Engineering and Control Services Nationalisation

Operational capital Operational expenses Taxes Total Other Expenses Conditional Expenditure Total Capital and Cost Financing expenses Interest expenses Total Financing Expenses Total Investment Cost The above described costs are included in the porject s feasibility study. In the BOT projects, the total investment cost is revised by taking into consideration the cost arising until the project reaches the enforcement stage [1]. 61 The BOT projects consist of two different and long stages being the construction and the operational period. The values of the goods and services provided from abroad during the construction period until the date of the project s enforcement and the date on which the investment is put in operation, may be subject to escalation taking into consideration the inflation indexes of that country and the exchange rate changes occuring between the local currency and the foreign currency. Whereas in the operational term of the project, only administrative and operational expenses are subject to escalation [40]. 3.8. Implementation of the Build-Operate-Transfer Model in our Country The relevant public entities had to make an important and critical choice regarding the establishment of some fundamental infrastructure plants in Turkey by means of the Build- Operate-Transfer model. The existing process conducted by the rules of the state tender system denotes a customary mechanism in our country. The idea of realizing investments by means of the Build-Operate-Transfer model has been introduced to the Turkish economy in the mid 80 s as a new method of ensuring work, and a to a certain extent in order to remove the delay and uncertainty situation in these classical tenders. Provided that it is deemed appropriate and approved by the relevant units of the public, the fact that the financing to be used in the project s construction shall be undertaken by the bidding firms seemed to be a time-making other advantage. Even if the international investment credits are provided by firms, they are conducted as a part of the general international financial-

economic relations balance of the Republic of Turkey. A great number of credits with excessively high amounts shall not be used. While international credit institutions carefully make their evaluations related to the external incomes-expenses balances of Turkey; it is observed that a similar attention and sensitivity is shown with the relevant public institutions. The legal framework of the Build-Operate-Transfer model has been determined by the Law number 3996 dated June 8, 1994. The law gives the possibility that capital stock companies or foreign companies are commissioned in the framework of the Build-Operate-Transfer model in terms of the construction, operation and transfer of bridges, tunnels, barrages, watering, drinking and potable water, clarifying plants, drainage, communication, energy production, conveyance, distribution, minerals and their operations, factories and similar plants, investments preventing environmental pollution, motorways, railways, underground and aboveground parking garages and sea and air ports for civil use and similar investments and services. 62 In the law, the Build-Operate-Transfer model is defined as the payment of the investment amount (including the profit to be obtained) of the projects, which require advanced technology and high material resources, to the capital stock company or the foreign company by means of the acquisition of the goods or services, which are produced by the company during the operational term, by the administration or those benefiting from the service. According to the law, the procedures and principles of the Build-Operate-Transfer model, the properties sought of the contractor companies, the scope of the contract, the criteria applicable in the determination of the charge of the goods and services to be formed as a result of the investment, and the other principles related to the subject shall be jointly prepared by the Ministries of Finance, Public Works and Settlement, Transport, Energy and Natural Resources, the Undersecretariat of the State Planning Organization, the Turkish Treasury and the Undersecretariat of Foreign Trade and enforced by the Cabinet Decision. In the law, the scope of the establishments supposed to realize their services by the Build- Operate-Transfer model has been kept quite broad. Accordingly, all public institutions and establishments including public economic enterprises and funds may be authorized by the Supreme Planning Council. The Administration, who wish to ensure the investment and services according to the build-operate-transfer model, may apply to the Supreme Planning Council and may execute a contract with the capital stock company or the foreign company after having obtained the Council s permission. The contract should be subject to the provisions of private law and should not represent any privilege. The capital stock company or foreign company is held responsible for the project preparation, financing, establishment and operation of the investment and/or service within the period

determined, and it is subjected that the sanctions in this regard are included in the contract. Besides, in the contracts to be made, the repayment period of the investment amount (including profit to be obtained) and the credits provided for the investment, as well as the nature of the project, the amount of capital and operational principles are taken into consideration while determining the duration of the investment and service, the construction and operation of which shall be undertaken by the capital stock company or the foreign company. Whereas the duration of the contracts is has been limited to 49 years. According to the law, the charges payable in consideration of the goods and/or services to be produced as a result of the investment to be realized by the build-operate-transfer model, can be determined by the ministry to whom the administration is associated or related, in cases considered necessary pursuant to the procedure and principles to be put into force by the Cabinet Decision. The projects planned to be made by the build-operate-transfer model are presented to the State Planning Organization. An offer is made to the Supreme Planning Council in order to enable the projects, the feasibility reports of which have been deemed appropriate and the feasibility of which has been decided, to be included in the investment programme by taking into consideration their contributions to the country s economy. These processes are shorter in comparison to projects the construction of which is provided for by the budget. 63 Since in the BOT model, the purpose of making the special public investments pick up speed has been adopted as essential principle in evaluating the tender, the element forming the essence of the tender decision should have been related to the concepts of speed and time as well. The related public units should both take the period of completing the investment and putting the facility in commission as a factor, as well as take the operational period prior to the delivery of the facility by the group, which is realizing the investment, to the public is distinctive element into consideration. In this framework, the period of realizing the investment has been determined by the Administration as reasonable, but as short as possible. Whereas the period during which the group, which is awarded the contract among the participants and which shall realize the investment, shall operate the facility on its own behalf upon the end of the construction period has been determined as a basic parameter of comparison. In order to stimulate and encourage the speedy realization of the investment, in case the task is completed in the facility is put in commission prior to the investment period foreseen by the contract, it has been foreseen that this period to be yield is added to the operational period bid during the tender. The comparison of models providing the construction financing from the budgetary resources and out-of-budget resources is shown in the following table.

Table 3.1. Comparison of Models A- Characteristics of the Construction Model Providing the Construction Financing from Budgetary Resources B- Characteristics of the Construction Model Providing the Construction Financing from Outof-Budget Resources Based on public resources Based on enterprise resources Inclusion in investment programme may require a long process If there is a suitable project, it may be included in the investment programme in a short time. 64 There is the risk that the task may not be completed on time. It is generally completed before the period determined. PERIOD The factor of speed is not essential in the construction. Speed is an important factor. Return of operational period origin takes a long time. Return is realized in short periods. Tender is entered with implementation projects. Tender may be entered with first draft. COST Firms who are powerful in financial and technical terms can be awarded the contract. There isn t any necessity for jointventure Pursuant to the contract, joint ventures formed by several firms powerful in financial and technical terms are awarded the contract Joint-venture is one of the model s important properties.

Table 3.1. (Continued) Comparison of Models A- Characteristics of the Construction Model Providing the Construction Financing from Budgetary Resources B- Characteristics of the Construction Model Providing the Construction Financing from Outof-Budget Resources Based on domestic capital. Ensures transfer of foreign capital. COST The only target is to profit in the construction work. Therefore, deviation from quality is possible. Profitability is not a target in the construction work. Profit during the operational term is essential. Quality can be ensured in the construction work. It may cost the Public much more than planned. The increase of the work s cost doesn t bring any additional cost to the public. 65 There is difficulty in ensuring the requested quality in the construction. Quality is at top level since it also comprises the operational period. Technology transfer may not be ensured. Necessitates the technology transfer SCALE Applicable in all construction works. Applicable in projects which are profitable and ensuring return on a short-term basis. Too much firms participate in the tender A few powerful firms are participating in the tender

Table 3.1. (Continued) Comparison of Models A- Characteristics of the Construction Model Providing the Construction Financing from Budgetary Resources B- Characteristics of the Construction Model Providing the Construction Financing from Out-of-Budget Resources The parties consist of the administration and the contractor firm There are many different national, international parties. SCALE Consultancy activities remain at a minimum level. Comprises many consultancy activities of maximum number. Applicable for all projects. Applicable for projects, the return of which is possible in a short time and which include an operational element. 66 The benefits of providing the construction financing with the contribution of the private sector is as follows: It may support the decrease of the financing burden on the public borrowing capacity The private sector dynamism and experiences may become efficient in the public investments and services, time saving and increase of efficiency may be ensured in the process of obtaining this investment and services The use of the private sector acquisition and construction methods may be beneficial for the country s economy The quality of the existing services in the public may be increased and additional services may be ensured to be rendered While the period of the investments completion shortens, the use of better methods, rendering maintenance and repairs services of higher quality may extend the physical and economical life-span of the investment Savings may be ensured to an important extent in terms of the costs in comparison to these services being provided for by the public sector Whereas, the objections to the provision of the construction financing with the contribution of the public sector may be explained as follows. Since in case the public services are transfered to the private sector, the public is not directly contributing to the rendering of these services, there may not be provided any control on the quality, standards and permissions Disputes may arise regarding the remuneration obtained in consideration of the services to be provided and the increases of these remunerations between the parties

The public establishment may encounter certain damages due to the fact that it doesn t have the control in cases of the bankuptcy of the private company or the incomplete fulfillment of the service Since the commercial aim shall stand out, the prices may be high in terms of the users 3.9. Factors which may Affect the Success of the BOT Model [41] Formation of the legal framework Structure of the economic framework The fact that the project is powerful, feasible and appropriate in financial terms The fact that the credit change is high and the country risk managable Stability of politics The fact that the firms realizing the project are experienced and reliable The fact that the construction firm has sufficient experience and resources An open and accurate bidding process The properties of the sector and determination of the project s priority Forming profit-based cooperation in the public and private sector Structuring the project in a manner to be completed on time and with a suitable cost Distribution of the project risks among the parties in a rational manner Rational feasibility studies The country s political stability 67

4.ANTALYA AIRPORT 2 nd INTERNATIONAL TERMINAL SAMPLING 68 From the moment the need for the Antalya 2 nd International Terminal, which has been built by the BOT model, has arisen, the planning, building, supervision and operational processes have been considered at length. The construction phases have been reviewed by means of the integration management systematic in the scope of the construction management, and the results obtained in the overall construction phases have been analysed. The main method in the sampling analysis has been the use of the experiences obtained by active working within the supervisory mechanism at all phases of the project. During the preconstructional stages, the documents, certificates with the institution and the findings obtained from the meetings with the relevant persons have been evaluated. In the scope of the construction management, it has been ensured by means of the integrating management systematic that the project is considered

as a whole, and within this integrity, the criteria of the construction concept of the BOT projects has been analysed. The findings and results obtained have been supported with research of literature and thus the implementation-weighted aspect of the thesis as well as the framework of the academic study has been determined. This construction process, which represents the third sample made by means of the BOT model in the construction of the airport terminal construction, has different properties in comparison to the others. These are mainly that it is the second terminal realized by means of the BOT model within the same airport, that the tender has been participated with the project of the first one, but a different product has turned up in terms of magnitude and architectural concept, that it has been evaluated in the scope of 20%, and that an extension of period has been granted with entirely different supplementary tasks, which are not directly associated with its operation (fire brigade, security, technical block-tower buildings, etc.), in the operation of the terminal. Under the assumption that the variables brought by these differences shall be an original sampling, the Antalya airport 2 nd International Terminal s construction has been analyzed in the study. The constructional stages of the Antalya Airport 2 nd International Terminal building, the construction of which has been realized by the Build-Operate-Transfer model are as follows. 69 The Process of Acquisition of the Antalya Airport 2 nd International Terminal Building; A. Planning - Determination of requirements feasibility studies - Project definition/formation - project preparation and analysis - Tender - financing of project B. Implementation C. Supervision -Control D. Operation 1. Determination of requirements/

1. Determination of requirements/ Feasibility Operational Period D. OPERATION 2. Project Definition/Formation C. CONTROL A. PLANNING Construction B. CONSTRUCTION 3. Design 70 4. Tender Figure 4.1. BOT project phases The other headings apart from the above mentioned phases in the analysis of the terminal building construction are as follow Planning Construction Supervision Characteristics of the project, Building producer establishments and their technical capacities Organization and management Examination in terms of regulations Planning and organization of the construction process, importance and nature of planning Cumulative elements in planning Evaluation in terms of management system, analysis by the integration management 4.1. Planning The planning phase starts with the determination of the acts constituting the project, in other words, with the division of the project into the acts forming it. Later on, the logical relations of each act with the others are determined and these relations are expressed formally by technical assistance. By means of the procedures made in this phase, it is possible to examine in detail the

acts representing the project and a suitable foundation is formed for the development of the plan prior to the implementation of the project. Whereas the most important aspect of the planning stage is that it enables the evaluation of different programme alternatives [42]. The State Airports Administration has started the planning studies along with the occurance of the need. After the processes of project definition, project formation, it has been foreseen that bidding may be realized with the Antalya 1 st International Terminal s architectural projects, the parts of the first terminal requiring revision-renewal have been defined with supplementary reports and bidding has been realized in order to obtain a building featuring modern technology in accordance with today s conditions. 71 In the building process, the planning stage represents the most important phase as well. In this framework, all criteria related to planning are evaluated in the implementation of the Antalya 2 nd International Terminal and planning has been made by means of various programmes and methods. All data taken into consideration during the planning stage have been the main criteria in the preparation of the working schedule. Planning has been revized by constantly updating any problems occuring during the construction process. However, as a result of carefully realized works during the preplanning stage, it is possible to say that the outlines of the planning have not changed within the workflow and that it has been succussful. The planning stage during which resource, time, target, etc. issues are evaluated within an intergated structure in the building management systematic, has ensured that the facility mad by means of the BOT model has reached the results aimed at. 4.1.1. Project definition - formation As a result of the positive improvements experienced in the tourism sector, the Antalya Airport has become the second greatest airport of our country. This airport, where 13,8% of the total traffic in terms of flight traffic is realized, serves 21% of the total passenger traffic.

Figure 4.2. 2004 passenger shares according to the airports 72 In Antalya, the domestic flights passenger number on the airport has increased by 183% during the period 1987-2001, whereas this rate has been realized as 1960% in international flights. Whereas the total traffic increase has been realized as 1410% [43]. Figure 4.3. Antalya Airport Master Project [45] The traffic of this airport in the year 2001 had exceeded its actual capacity. According to the mid forecast, it was expected that the airport traffic reaches 30 million passengers in 2016. Whereas for the low forecast, the same year s traffic has been calculated as 15 million [44]. An application has been made by the Ministry of Transport based on the Supreme Planning Council s decision for the construction by the BOT model of the 2 nd Terminal unit with a capacity of 5 million passengers/year in addition to the new international terminal, where difficulties in capacity have been encountered due to the traffic realizations in the first 6 months

of the year 2000 and 2001. The subject has been communicated by the Undersecretariat of the State Planning Organization to the Supreme Planning Council, and the decision related to the realization of the project has been adopted in February 2002. It has been planned that the project is put in commission in 2005 in case it is put out to tender in 2002. Upon completion of this project, the airport s passenger capacity shall increase from 9 million to 14 million passengers/ year. Even though it seems that the capacity problem shall be removed in this way until 2016 for a low passenger forecast, it should not be overlooked that there is an additional capacity need for the mid forecast, and that therefore it is necessary to carry on the new capacity works for the period mentioned by means of a more detailed study. 73

The reasons giving rise to the need of investment at the Antalya Airport may be outlined as follows: Capacity insufficiency (physical insufficiency of the existing terminal) Technological requirements International requirements Requests of the parties Passenger complaints and requests 4.1.2. Design The natural and historical riches of the Antalya region has made this province an important tourism center since the 80 s and there have been great increases in the aircraft and passenger traffic of the Antalya Airport serving the region in this context. 74 In this framework, the master project preparations have been started to increase the passenger capacity of the Antalya Airport to annually 30 million passengers. The project competition made for this purpose in 1989 has been won by the master project of the DOĞAN TEKELİ SAMİ SİSA group. In the said master project, there are 6 terminal units each featuring a 5 million passenger/year capacity, one of them being domestic flights. (Figure 4.3.) In order to ensure the realization of the New International Terminal Building, which constitutes the first stage of the said master project, by means of the Build-Operate-Transfer Model being an out-of-budget financing model, an international tender has been realized in 1993. As a result of the tender made, a Concession contract has been executed by and between Bayindir İnşaat Turizm, Ticaret San. A.Ş., who has been awarded the contract, and the State Airports Administration upon the approval of the Council of State. Following a constructional period of 20 months, it has been commissioned on April 1, 1998. Among the ports and fields operated in Turkey, the Antalya Airport holds the second place after the İstanbul Atatürk Airport in terms of passenger traffic. As per the year 2000, a total of 7.456.568 passengers have arrived-departed, a total of 53.864 aircraft have landed-departed [46]. In the first 5 months of the year 2001, there has been a serious increase of 51,2% especially in the port s international flights passenger traffic. It was expected that this trend of increase would further increase in the later years. In the future-oriented forecasts, it was expected that the international flights passenger traffic in the year 2002 shall exceed 10 millions.

16.000.000 14.000.000 12.000.000 10.000.000 8.000.000 6.000.000 4.000.000 2.000.000 0 8.535.534 7.673.900 6.000.000 10.100.242 10.582.289 9.750.180 9.750.874 14.256.114 12.583.195 11.735.428 12.648.445 2001 2002 2003 2004 2005 CAPACITY FORECAST REALIZED Figure 4.4. Antalya Airport Statistics [47] Taking a look at the total passenger rates between 2000-2004 of the airports, the terminal building of which has been made by the BOT model, the quite recessive structure of the problem is apparent. Upon review of the airport, an increase of approximately 100% has been realized between these years. The international terminal building had a capacity of 5 million/year. The passenger capacity had doubled and had reached the point which the existing structure could not support. 75 Within all these developments and expectations, the works have been started in order to muke the 2 nd unit included in the Master plan, for the purpose of avoiding any blockage in the later years to the international flights traffice of the Antalya Airport holding the position of the gate outward from our country s most important tourism center. It has been decided that this second unit is made by means of the BOT model as well. It was important that both the constructional period took a very short time and that the financing was provided entirely by private company resources as an out-of-budget finance model. The successful results achieved in the first made samples, has significantly influenced the decision to continue with this model. The fact that the BOT model was significant in order to ensure the effective and efficient use of the public resources was an opinion adopted by the Administration. In terms of being a private financing model, the BOT model activates the private sector dynamism without imposing any financial burden on the administration. The fact that it doesn t bring any restriction in terms of administrative, financial, technical and tender regulations has ensured that this model has become a prefered model of financing. The provision of investments, which require great financing, by efficient resources and external credits, also ensures a serious external investment to the country as well. Thus, projects requiring serious investments may be implemented without bringing any burden to the public.

For this purpose, the tender preparations have been started upon the decision of the Supreme Planning Council. The fact that this model is adopted for reasons resulting from the requirements and that it is successfully implemented, justifies the Institution s reason for adopting this model. In BOT projects, there aren t used a great number of credits of excessively high amounts. While international credit institutions carefully make their evaluations related to the foreign income-expense balances of Turkey, it observes that similar attention and sensitivity is shown by the relevant public institutions as well. The extension and development of the Antalya Airport by the addition of a new extensive international terminal building has been found appropriate in terms of foreign and domestic institutions to provide credit. 4.1.3. Tender Process 76 Since in the said method it is essential to expedite extensive and special public investments, the element forming the essence of the tender decision should be associated with the concepts of speed and time as well. The relevant public units have both taken the period of completing the Airport terminal buildings within the extension and development investment and of commissioning the facility, as well as the operational period prior to the delivery of the facility by the group, realizing the investment, to the public, as a basic distinctive element. Therefore, the guaranteed passenger numbers, incomes yield and the construction period has been shaped accordingly. The contractual articles foreseeing the inclusion of the period gained from the construction period to the operational period, have been a basic evaluation element for firms who have participated in the tender and who have been awarded the contract. In this framework, the investment s realization period has been determined by the Administration as a reasonable but as short as possible period. On the other hand, the period during which the group, which has been awarded the contract and which is supposed to realize the investment from among the participants, shall operate the facility on its own behalf after the end of the constructional period, has become a basic measure of comparison. In order to encourage the rapid realization of the investment, in case the work is completed and the

facility is commissioned prior to the period of investment foreseen by the contract, it has been foreseen that this period to be yield is also added to the operational period offered by the investor during the tender. 77 This concept has led to the formation of rational, practical and meaninful bid evaluation criteria. The incomes yield to the contractor firm and the guaranteed passenger numbers have been the important element influencing the firms bid. These matters have been explicitly described in the contract and specifications. Another important matter affecting the tenders was the necessity that the builder firms had to have any similar operational experience before. This matter has brought along with it the joint venture consortium with foreign aerodrome operating firms. The relevant public units had to make an important and critical choice in terms of the establishment of certain basic public building facilities in Turkey by means of the Build-Operate-Transfer investment method. The state has been looking for

78 an alternative throughout the existing period passing with the tender system s rules. In the construction model, the financing of which is provided from the budget, the relevant public unit determines an estimate amount for the investment to be made, and the contractor nominee firms participating in the tender bid a certain percantage below or over this amount. The firm, who has presented the most suitable, that is to say, the lowest bid in terms of public benefits, is awarded the contract. In case of investments requiring equipment and financing power besides certain extensive and technical specialization, the firms undergo a primary election. A nevertheless great but, in comparison to the applicants, somewhat lessened number of firms participate in the tender. The obligation to realize the investments at the aerodromes speedily and equipped with up-to-date technology, has become more distinctive as a result of the increase of passengers and demand during the recent years, and the use of BOT as alternative building model has gained importance. In case of works, the financing of which is provided from the budget, the wish of firms to get over their temporary financing straits and consequently to get a new job and obtain cash sometimes gains so much weight that a contract may be awarded without paying much attention to the long lasting destiny of the investment business. However, in this case, unavoidable delays, failure of fulfilling the administration s demands of time and quality arise and the works are eliminated. In countries with economics featuring high inflation, delayed work means harmful and expensive work. Consequently, receiving with a very low bid, may cost the public more due to the delay of investment and consequently service and late performance of service caused

works which have been procrastinated and eliminated. In this scope, a tender has been realized on Nov.4, 2003 for the Antalya 2 nd International Terminal which has been planned to be made by the BOT, being the model implemented by being financed by provision from out-of-budgetary means. 4 separate joint venture groups consisting of different firms have submitted their bids to the tender. Since 2 of these joint ventures failed to be prequalified, their bids have not been considered valid. The joint venture led by Çelebi Hava Servisi A.Ş., one of the firms having been prequalified, have been awarded the contract by bidding the least period and have been entitled to operate the Antalya 2 nd International Terminal for a period of 34 months 27 days excluding the building period of 20 months. We are confronted with a significant matter in the works made to ensure that this model is found attractive by the private sector. In the aerodrome terminal implementations this has been introduced as the guaranteed passenger number. In the operational process of the project to be done, by the BOT model, the tender renders this matter important to enable it to be attractive for firms who shall bid. The fact that the return process of the financing of these projects requiring great investments is short, is a wanted criterion for the private sector. Therefore, the Institution has made the projects attractive by means of the efforts shown by it related to this matter, and has ensured that the project pays off as soon as possible by means of the guaranteed passenger number and the incomes left to the operating firm, and, at the same time, that the build-operate part is completed and transfered to the Administration in the shortest time. Failure of providing the guaranteed income to a reasonable extent gives rise to a situation at loss to the public. The developments encountered in the energy sector clearly reveal this circumstance. Actions 79

related to the serious damages suffered by the public by keeping the guaranteed kw/h charge high, while it is produced much cheaper, are on trial, and the matter has created significant discussions and criticism in the public opinion. The joint venture having been awarded the contract pursuant to the contract, has established a new company as an independent corporate body. As a result of the Implementation (Concession) contract executed by and between the newly established company and the Administration, as well as the specifications representing its supplements, the project has passed over to the building phase. Upon the formation of the financial structure formed by the own equities of the joint investment company and by raising of credit, activities related to the building phase have been accelerated. 4.2. Building 80 Construction projects have a predetermined aim. The production activity starts to realize this aim. - In construction projects, the resource is definite and limited. It is requested that the project is realized within this period. - In construction projects, the resource is definite and limited. It is requested that the project is realized with these resources. - These project are non-repetitive and require new decisions and solutions in the planning-programming-designingimplementation phases. - In construction projects, the problems are complex and require specialization. Therefore, many decision making bodies have to take a part in the project. - The necessity that more than one person or establishment takes part in construction projects comprises different approaches in the organization and management of construction projects [48]. Considering this in the framework of the above mentioned principles, the building phases of the Antalya 2 nd International Terminal have features forming inputs for

noteworthy and future-oriented implementations. Both the financing resources as well as the management strategy followed during the building phases differentiate this project. Comprising sophisticated elements, which require specialization, its organizational structure where many parties are interrelated, the construction of the Antalya Airport 2 nd International Terminal includes many properties in all its details. As sample, the building processes of this terminal shall be explicated in detail in the following sections within the systematic of building management. Preparation of the implementation projects: The determination of the architectural basic idea, as explained in the above sections, is based on projects obtained as a result of the competition opened. Architectural detailing has been conducted parallel to the building works along with the engineering projects due to the speedy production obligation. The detailing works, which are conducted interrelated and in harmony, throughout the design-construction process, have been realized in conformity with the design chosen as a result of the competition and in accordance with the revision and requests determined by the Administration in the contract. The airport international flights buildings have to exhibit different project and building characteristics in terms of its great dimensions and very dynamic functionality. The idea project adopted by the competition, the detailing of which has been made by keeping the elements of being plain, relaxing and spacious in the foreground, has been further developed in accordance with the compliance with the experience the State Airports Administration has achieved in the 1 st International Terminal and the up-todated technological conditions. The targets determined in the design are as follows: 81 Efficient use of the existing ground Integration with existing facilities and easy access to the terminal Passenger circulation ease and efficiency Usage elasticity and possibility of adaptation Economic building and fast delivery Energy preservation Durability and ease of maintenance

Adaptation with systems comprising up-to-date technologies Ensuring international aviation criteria Security criteria Taking into consideration the international prestige element Taking into consideration all these aims and considering all contemporary developments, with the design concepts determined upon the intensive research and development studies of the groups in the business, electric-electronic, mechanic, architectural, constructional, security and other disciplines, the transition from the first draft to the implementation project has been realized. The requirement programmes have been determined by means of the future-oriented passenger traffic forecasts of the airport where the terminal shall be built. At the stage of the implementation projects the necessary updatings have been made and detailing has been made parallel to the projects of the technical-technological systems. 82 The adaptation of the constantly renewed aerodrome technology to the same projects after an interval of 6-7 years has also caused certain difficulties. The ability to comply with the security decisions of the international aviation organizations, the request to implement renewed parts such as luggage systems in the new project are some of the said problems. Due to the special structure of the Airports Terminal Buildings projects, technical and technological systems have played an important role. The preparation of projects of these systems have been conducted together by the consultant firm and the project groups under the guidance of the central coordination unit. The validity and functioning of the general system formed by the project preparation groups have been carefully followed up through periodical, regular controls and meetings. The technical-technological systems included in the terminal building s construction may be defined as project preparation groups, Static Systems, Mechanic Systems, Electrical Systems, Electronic Systems, Security Systems and Data Processing Systems. Along with the main dimensioning of the terminal building and the placement of the system units, all technical/technological system project preparing groups had to realize detailing bound to the criteria determined. These are, along with the definitions of dimension and placement, the technical requirements described in detail in the technical specifications and supplements of the contract prepared by the administration. Taking into consideration all these elements, and within a coherent relation with the architectural design group, the form of the technical/technological system project preparation has been adopted and implemented succussfully. The extensive dimensions of the systems and their featuring multiple activities, has rendered the procedure of project preparation much more complex than an ordinary building design. The engineering groups realizing the project preparations of the technical and technological systems during the building and designing process have carried on this complex

detailing in a fast and complete manner. The design and project preparation of the systems has been realized with the international consultancies of firms of national scale. Regarding dimensions and implementation, the suggestions of international institutions and persons have been taken into consideration and appropriate solutions have been applied. Along with holding less space among technical-technological systems, detailed projects have also been prepared for sanitary installations and drainage infrastructure systems. 4.3. Supervision The Administration (State Airports Administration) has conducted the project with its 29 technical and administrative personnel within the Construction Real Estate Department and locally the Antalya Airport Directorate General. The personnel of the Administration has basically fulfilled its duty as controlling, supervising and approval authority during the project s investment period. Since the personnel of the State Airports Administration, Presidency of Construction Real Estate Department at the same time conducts the controlling and supervising duty of the other ongoing projects as well, periodical visits have been made to the building task during the investment period and the controlling/supervising duty has been fulfilled in this way. Whereas the technical personnel of the Antalya Airport s Directorate General has constantly fulfilled the controlling and supervising duties during the investment period. 83

84 The New International Terminal Buildings feature the status of a special building. This property has required a different approach in comparison to the other building tenders in the tender preparations, and the specifications have been prepared by taking into consideration the property of the terminals. For the construction of the Terminal Buildings, the use of modern systems used at aerodromes made by this model worldwide and even more advanced technologies has been requested. The projects chosen show that this idea has been intensified, and that it has especially been handled in the design and project preparation works of the advanced technology elements. The supervision is realized by taking into consideration of the task s significance and building speed by the administration according to all contracts and specifications prepared by the Administration as well as the approved implementation projects. In addition to the technical supervision mechanism which is formed as control organization and project evaluation commission, the monitoring commission consisting of the executive managers has periodically examined the work and have issued reports and thus documented the flow of the work. In the framework of the contract, monthly activity reports have been prepared periodically every month by the contractor firm and the controlling organization. Independent supervisory establishments, who have been requested by the credit granting banks or establishments according to their own requirements, realize supervision from the beginning of the work. It is especially useful to point out the sensitivity of credit providing international establishments to standards, environment, labour health, etc. Again, all necessary tests and examinations are realized according to the contract and specifications. The experimental tests of the technological systems chosen have been made in the factories. Laboratories have been established for periodical tests, which are compulsory to be done at the building site. The supervision of the Antalya 2 nd International Terminal, which has been realized by the BOT model and which comprises the fast construction element, sometimes causes delays due to the obligation of the public administration to conduct all works put to tender by it with the existing technical personnel. This insufficiency has been an important restrictive element constraining the constant control of all phases of the building process.

DIRECTORATE GENERAL OF STATE AIRPORTS ADMINISTRATION DEPARTMENT OF CONSTRUCTION CONTROL AUTHORITY PROJECT EVALUATION COMMISSION CHIEF S OFFICE OF CONTROL CONSTRUCTION CONTROL ENGINEERS ELECTRICAL CONTROL ENGINEERS MACHINERY/INSTALLATION CONTR. ENGINEERS MACHINERY/MECHANICAL CONTR. ENGINEERS ELECTRONICAL CONTROL ENGINEERS Figure 4.5. Antalya 2 nd International flights building control organization chart Many persons apart from the disciplines shown in the above chart have supported the controlling organization in the commissionings. In the ground works the geological engineers, in terms of the air traffic and flight systems the air traffic controls, in the landscape and environmental arrangements the landscape architects, in terms of the operational business the specialists from the Presidency of the Operational Department, as well as many elements actively employed with the Administration have taken part in ensuring an efficient supervision during the building stage of the Antalya airport 2 nd International Terminal by transfering their know-how and experiences. What has to be especially emphasized here is that all elements in the Administration have taken all necessary measures by constant coordination in terms of being able to catch up with the speed of the contractor firms in the challenge of the BOT projects against time and to take all decisions, which have to be adopted on the part of the Administration, without causing any delay to the construction, 85 4.4. Properties of the Antalya Airport 2 nd International Terminal Project The Antalya Airport new international terminal project comprises many different elements both in terms of scale as well as technological equipment used. It has been tried to outline the tasks of various dimensions including different properties in the scope of the project. The project has been defined by subjects such as the project s aim, type, technical properties, components, duration, magnitude, project outputs. The main elements of the properties of the Antalya Airport 2nd International Terminal have been outlined in the following table. For a more extensive and detailed table please refer to APPENDIX-3.

Table 4.1. Antalya Airpot II. International Terminal Project Name of Project Building, Operation and Transfer of the Antalya Airport II. International Terminal and Supplements Aim of the Project Due to the insufficiency of the capacity of the Antalya Airport s existing 1 st International Terminal being confronted with the increasing passenger traffic and in accordance with the master plan of the Antalya Airport, the building, operation and transfer of the Antalya Airport II. International Terminal Building and Supplements put out to tender in the framework of the Cabinet Decision no. 94/5907 and the Law number 3996 as well as the procedures and (APPENDIX) principles determined. 86 Type of the Project Building,operation and transfer of the airport terminal by means of the BOT model: Upon the intention of a public authority (administration STATE AIRPORTS administration), which needs new assets (facilities) to fulfill the public services with which it is commissioned by law, but which is not in a position (or doesn t deem appropriate) to provide for the risks as well as financing of the investment necessary for this by its own budget, to make a corporate body (a Capital Stock Company or Foreign Company) fulfill the part of its relevant duties related to Investment and Operation by contract to the part limited by the contract, the acceptance by the relevant corporate body to produce, operate the work (facilities) in consideration of the remuneration (including profit) payable by the acquisition by the administration or service beneficiaries of the goods or service produced by the corporate body in the framework of the operational period and authorizations granted to it by contract, to transfer it to the administration at the end of the contractual period free of charge, free of any obligations and committments, in a well-maintained, operating and usable condition, and the undertaking of the related investment financing. Technical Contents of the Project The Antalya Airport II. International Terminal and Supplements have been designed to be able to serve daily 300 flights and 50000 passengers. 12 aircraft may simultaneously approach the terminal apron passenger bellows. There are 34 far aircraft parking positions. There are a total of 26 gates consisting of 8 arrival, 8 departure, 8 fair aircraft departure, 2 fair aircraft arrival gates. There are 64 check-in counters, 1 mobile checkin counter, 6 luggage delivery isles and a fully automatical PLC/SCADA controlled luggage system equipped with advanced electro-security technology and having a capacity of 5000 luggage/hour. The total indoor building site is 102673 sq.m. Technical Contents of the Project Besides, the landscaping along with the building of the parking area of 130654 sq.m. to serve 302 busses and 451 automobiles is also comprised by the project. The total outdoor building area comprising also the car park and landscaping areas is 448039 sq.m. The facilities have been built by using up-to-date technology in accordance with the criteria and standards of important buildings of the 1 st degree and international airports. All furniture, equipment and inventory stock of the terminal building as well as the software and hardware of aviation and ground handling services have been supplied in the scope of the Contract.

Components of the Project A In the Scope of the Main Contract dated Feb.24, 2004: 1. Antalya II. International Terminal Building: 78073 sq.m. 2. Heating Centre 3164 sq.m. (3.750.000 kcal/h heating and 7.800.000 kcal/h cooling capacity) 3. Energy Distribution Building - 844 sq.m. (with 30 mva capacity) 4. Aircraft (Jet) Fuel Hydrant System (31 Aircraft Positions and 600 ton/h capacity) 5. Asphalt area: 65000 sq.m. B In the Scope of the Supplementary Contract dated Nov.10, 2004 1. In addition to the terminal building, the construction of 15 Check-in counters and the addition of the 4 th baggage line 2. New flight tower and technical block (6705 sq.m.) 3. New fire brigade building; 1585 sq.m. and environmental arrangement 4. Extension of the airport connection road by 1000 m 5. Local road 56550 sq.m. and surrounding wire fence construction 6. 46 aircraft parking positions of the Aircraft Fuel Hydrant System Magnitude of the Project A. Monetary Dimension Cost of Construction (US$): Description Tender Amount - Cost of Construction Main Contract 71,155,000 109,700,506 Supplementary Contract 14,231,000 19,147,600 Total: 85,386,000 128,848,106 B. Construction Site (sq.m.): Description Indoor Cons. Outdoor Cons. Total Cons. Main Contract 88.457 150.164 238.621 Supplementary Contract 14.216 297.875 312.091 Total 102.673 448.039 550.712 Technical Size Data: Indoor area of terminal building : 78.073 sq.m. Annual passenger capacity : 15.735.034 passengers Total aircraft parking positions : 46 Park positions with terminal/bridge : 12 Open parking positions : 34 Number of check-in counters : 64 Flight capacity : 20 flights/hour Number of passport counters : 60 Car park area : 65000 sq.m. Labour Force in Construction: 370,000- Man x Day 87

88 Period of Implementation Place or area of implementation Description Beginning Ending Duration Tender 04.11.2003 Main Contract 24.02.2004 Supplementary Contract 10.11.2004 Main Contract Construction period 20 months Main Contract operational period 34 mon. 27d Site Delivery Date 30.03.2004 Construction period planned according to Main Contract 31.03.2004 30.11.2005 20 months Construction period realized day 01.04.2004 05.04.2005 369 Add Constructional period added by supplementary contract 120 days Constructional period added by supplementary contract 209 days Date of Temporary Acceptance (end of construction period) 05.04.2005 Date of commissioning: 07.04.2005 Operational Period 08.04.2005 25.09.2009 1631 days Date of Final Acceptance 24.08.2006 28.04.2005 The area within the Antalya Airport Borders as marked on the Attached General Site Plan (Figure 4.5.) Project outputs The AYT Terminal 2, where all kind of technical equipment required to be available on a modern and secure aerodrome is used, has served about 4 million passengers in the 1 year period from April 7, 2005, when it has been commissioned, until May 7, 2006. The problem having come up due to the capacity insufficiency of the International Terminal-1 perceived in 2004 parallel to the increase in the number of passengers (tourists) has thus been removed starting with the tourism season of the year 2005. An additional means of employment of about 2500 persons has been provided throughout the airport Turkey has got its second largest international terminal Up-to-date products materials and devices used in the infrastructure of the AYTerminal2 has position the security system even over the international standards. The 6 step security system used in the terminal features the property of being the first one among the airports of Turkey and Europe. AYTerminal2, with its contemporary technical equipment, modern infrastructure and high quality services, is one of Turkey s most modern terminals. At the AYTerminal2, which has a unique architecture designed to conform with national and international systems, there are also subsidiary service elements to fulfill all kind of requirements of the passengers. Target group and/or region The main grup, on which the project is based, is the group of tourists and visitors from Antalya and surroundings as well as from overseas.

DHMI (Directorate General of the State Airports Administration): The duty of the operation of Turkey s Aerodromes as well as the regulation and control of the air traffic in Turkey s Airspace is performed by the Directorate General of the State Airports Administration (DHMI). The Directorate General of the State Airports Administration (DHMI) is a Public Economic Enterprise which has a corporate body status, which is autonomous in its activities, whose liability is limited with its capital, associated to the Ministry of Transport and whose services are considered concession by the latest legal arrangement. Establishment owning the project and its legal status During the recent years, there have been significant increases in the aircraft and passenger traffics served in the framework of the air navigation and aerodrome operation services by the Directorate General of the State Airports Administration. Significant developments are especially realized in the international flights aircraft and passenger traffics of our International airports, and the Antalya Airport is one of the leading airports of Europe due to the increase in International traffic encountered. Executive Establishment: (Company in charge) ÇELEBİ-IC Antalya Havalimanı Terminal Yatırım ve İşletme A.Ş. After the project has been awarded to the international consortium consisting of the Turkish company Çelebi Hava Servisi A.Ş. and the Kazakh company Atma Atyrau Havalimanı ve Taşıma A.Ş., it holds the status of single-purpose (with the only purpose of executing this project) foreign capital company, which has been established according to the law of the Republic of Turkey in March 2004 with the permission of the Undersecretariat of Treasury and Foreign Trade Directorate General of Foreign Capital to conduct the project under the position Company in charge pursuant to the contractual terms and conditions. 89 New Terminal Area Figure 4.5. Site Plan of the Antalya Airport

The scope of the contract is the task of the construction of the Antalya 2 nd International Terminal and its supplements and the supply and assembly of the electronic, electrical, mechanical and security systems related to them, as well as the temporary and final acceptance of all facilities and their supplements by means of the Build-Operate-Transfer model according to the specifications attached to the contract. There are 3 contracts executed on Feb.24, 2004 by and between the State Airports Administration and the Company in Charge (ÇELEBİ-IC): 7. Implementation (Concession) Contract 8. Construction Contract 9. Management and Operation Contract There are many technical specifications attached to these contracts. They are mainly as follows: 90 Building construction specifications, Specifications of electric-electronic systems, Specifications of the electro-security systems, Specifications of landscaping works, Specifications of mechanical systems. Besides, there are several appendices constituting the contractual enclosure such as loan agreements made, the contract made with the project author, the security protocol, insurance principles-policies and agreements. 4.4.1. Building producer establishments and their technical capacities The project s Contractor (Company in Charge) is ÇELEBİ-IC A.Ş. ÇELEBİ-IC A.Ş., with its partnership structure consisting of Çelebi Hava Servisi A.Ş. being one of Turkey s significant establishments featuring knowledge and experience based on a past of forty-six years in the sector of aviation ground handling services, and İÇTAŞ A.Ş. within the IC Holding company realizing great projects in the Construction sector as well as Atma Atyrau Havalimanı ve Taşıma A.Ş. holding an important place in the Kazakhstan Aviation Sector, holds the identity of being single-purpose firm with foreign capital, which has been founded just to realize this project. It has been founded as a requirement of the contract. ÇELEBİ-IC A.Ş. has assigned the General Subcontractor function of the construction process to İÇTAŞ A.Ş. with a cost+profit based special contract.

IC İÇTAŞ İnşaat Sanayi ve Ticaret A.Ş. is experienced in completing tasks on time by using well any powerful management and management strategies as well as technology and without compromising quality within the borders of Turkey as much as in the Middle and Near East. IC İÇTAŞ İnşaat, being the parent company within the IC Holding structure, is one of the leading firms in large scale public housing. IC İÇTAŞ A.Ş., who has combined its experienced labour force, its engine park and experiences with powerful management, has also carried on its success in the World Bank projects. Along with superstructure works such as public housings, business centers, public buildings, hotels, health facilities and hospitals, schools, military buildings and camps, energy generating stations, turnkey industrial buildings, infrastructure works such as road, bridge, port, airport, drinking water facility, waste water clarifying plant, irrigation system constructions as well as superstructure-infrastructure rehabilitation and renewal works are their areas of activity. The General Subcontractor IC İÇTAŞ A.Ş. has successfully undergone the ISO 9001:2000, ISO 14001:2004 and OHSAS 18001:1999 Management systems certification supervision realized by the BVQI (Bureau Veritas) Certification Services, and has started the implementation of the Integrated Management System. IC İÇTAŞ A.Ş. has continued with the quality journey, which they have started with the ISO 9001:2000 Quality Management System implementation in 2003, by adding the ISO 14001:2004 Environment Management System and the OHSAS 18001:1999 Labour Safety and Employee Health System in 2005. IC İÇTAŞ İNŞAAT has become a member of KALDER in 2005. [49] 91

Under the assumption that the assignment of the investment period s construction works to a general subcontractor experienced in the construction of building projects and contractual management would contribute sped and elasticity to the project, the Company in Charge has executed a Contract with the general subcontractor İÇTAŞ A.Ş. based on the cost+profit principle on April 1, 2005. Despite the fact that there isn t any necessity resulting from the contract, the Company in Charge (ÇELEBİ-IC A.Ş.) has issued a separate contract with BUREAU VERITAS (BV) Gozetim Hizmetleri Ltd. Sti., for the purpose that the quality management (controlling and supervision) process of the building process is realized by a professoinal and certificated 3rd Party Independent Quality Control establishment pursuant to the agreement made with the credit issuing bank and for the purpose of control and supervision by binding the General Subcontractor and other subcontractors building activities to the quality assurance system, on April 15, 2004. BV is an international quality management establishment with the authorization of certification in quality management and assurance systems. [50] 92 4.4.2. Organization and management The organizational structure of the project s construction period is given below. The development of the implementation design (preparation of the project) has been realized by specialized design firms, who have been commissioned in general terms by separate contracts by the Company in Charge. The 3rd party independent qualit control firm has been entrusted the duty of controlling and supervising all subcontractors in terms of quality management. The establishment of the construction site and general construction site services as well as general construction works (infrastructure, building works, architectural works, electrical installation works, mechanical installation works) have been given to the responsiblitiy of the General Subcontractor. Systems requiring technological specialization have been caused to be realized by means of subcontractor contracts made between the Company in Charge and the specialized firms as seen in the organization chart. Materials and equipments in the scope of stimulation have been directly provided by the Company in Charge, whereas the supply of the other construction materials has been entrusted to the responsibility of the General Subcontractor. The insurance of the works has been ensured by the insurance policies provided by the Company in Charge through insurance agencies. The Company in Charge has appointed consultants regarding financial, legal and aviation sector services. This organization chart has certainly been arranged in order to enable the Company in Charge to perform the construction works in a reasonable, flexible, fast, high quality manner and with optimum economy. The Company in Charge is essentially predicated on coping with the construction period by the contract management logic. This is a rational method. By this method it has been aimed at dividing up the works into separate tender packages according to

the market realities and to have them performed by firms specialized in the respective business field under competition in consideration of reasonable prices. This method is advantageous in many aspects: The Company in Charge, apart from its own capability, puts the capability of many specialized firms in action for the project. A tender is made in terms of which specialized firm shall be entrusted the works divided up, and thus competition is ensured, which conditions that the tasks are made with optimum economy. The Company in Charge ensures that the specialized firm, whom it has commissioned by subcontracts, directs its entire potential (specialized personnel, tools and devices, experience, machinery and equipment, etc.) to the service of the project. The labour force employment problem ranges to the subcontractor base. The Company in Charge has directly employed just about 25 personnel related to the construction. The basic duty of this personnel has been the division of the tasks and their being awarded to specialized firms, the conduct and coordination of subcontracts, the follow-up/coordination of the design/project preparation process, and the follow-up of the imports and supply of materials. 93 The fact that the establishment of the construction site, the rendering of basic construction site services has been entrusted to the General Subcontractor has provided ease of management in these matters to the Company in Charge. The fact that instead of the performance of the tasks comprised by every construction work (building works, infrastructure works, architectural works, electrical and mechanical installations, etc.) directly by the Company in Charge, they are conducted in care of a general subcontractor experienced in these matters, has settled an important management problem of the project. The undertaking groups have established a project orientation and observation unit within themselves starting from the beginning phases explained above. The units established fulfill the duty of ensuring the harmony of the complex connections between various disciplines of the project preparation. Besides, along with this, in a great engineering implementation operation, the main principle of which is the wish and obligaton of race against time and speedy completion of work without compromising quality, it was also supposed to bear the responsibility of the conformity between the activity of project preparation and implementation. This search for harmony has been successfully implemented in the construction of the Atatürk, Antalya, Dalaman, Esenboğa airports extension and development projects.

The architectural project authors bearing the responsibility of the project preparation and the international consultancy groups as well as the international project preparation groups (the subcontractors in charge of all technical-technological installation projects such as the static, infrastructure, general and special installation mechanics, electromechanic and electricalelectronical installation projects) with which they cooperate in the preparation of technical projects have already been conducting a collective work based on consulting and regular information exchange. However, with the special and intensive pressure imposing effect of the time factor, works have been realized under the coordination of the contractor firms in order to ensure this coordination which has become critical; offices have been established at the construction site for the designers, and coordination has been ensured by the participation of the State Airports Administration as well. This coordination, along with its addressing the groups rendering the designing service, has been in direct organic relation with the top executives of the very stringent application and the executives of the subordinated activity branches. 94 They have held periodical weekly observation and next-week decision-making meetings under the participation of all persons in charge and authorized. They have acted as the organizers of minor group meetings attended by a less number of persons in charge and authorized, within the course of the week and even days, and as the observers of the decisions made there. In the framework of coordination, they have also undertaken the preparation of reports informing the administration. It is generally known that for tasks under great time pressure, the incident of implementationdesigning consistency and coordination is of importance. In works made by means of the BOT model, this notion has been experienced one-to-one observing that it sometimes causes daily problems. However, it has been observed that all teams commissioned having been seeking for understanding, dedication and a systematic coordination. In the framework of this pleasing coordination table displayed, there has been an efficient and successful realization. This coordination has been made by the CONTRACTOR FIRMS and the STATE AIRPORTS ADMINISTRATION and most intensively the coordination of the complex systems has been focused on. Due to the speciality structure of the Airports Terminal Buildings Projects, technical and technological systems have held an important place. The designing of these systems has been conducted together by the consultant firm and project groups under the orientation of the central coordination unit. The validity and functioning of the general system formed by the designing groups has been carefully followed up by means of periodical, regular controls and meetings. The designing groups of technical-technological systems included in the terminal building construction may be defined as Statical Systems, Mechanical Systems, Electrical Systems, Electronical Systems, Security Systems and Data Processing Systems. Along with the main sizing of the terminal building and the placement of the system units,

95 all technical/technological system designer groups had to make a detailing by sticking to the determined criteria. These are, along with the size and placement definitions, the technical requirements which have been mentioned in detail by the technical specifications of the contract prepared by the administration, and their supplements. Taking into consideration all these elements and in a consistent relation with the architectural design group, the form of the technical/technological system design has been adopted and is successfully implemented. The fact that the systems are of great sizes and feature a great number of activities has made the project preparation procedure much more complex than the normal building design. The engineering groups making the technical and technological system designs in the course of construction and design, are carrying on this complex detailing in a speedy and complete manner. [51] The design and project preparation of the systems has been realized with the international consultancies of firms of national scale. The suggestions of international institutions and persons regarding dimensions and implementation have been taken into consideration and appropriate solutions have been adopted. Along with holding less place among technical-technological systems, detailed projects have also been obtained regarding sanitary installation and drainage infrastructure systems.

4.4.3. Examination of the sampling in terms of the BOT model regulations There are 3 contracts which have been executed by and between the State Airports Administration and the Company in Charge (ÇELEBİ-IC) on Feb.24, 2004: 1. Implementation (Concession) Contract 2. Construction Contract 3. Management and Operation Contract 96 In addition to these 3 contracts, a Supplementary Contract has been executed on Nov.10, 2005 and the following additional works have been added to the work scope of the contract due to the provision additional requests of the administration not exceeding 20% of the investment amount of Article 9 of teh Construction Contract: a) Building 15 additional check-in counters, b) Construction of the intermediate access taxiway and ground handling service vehicles service roads of 180 m between the access road and the aircraft parking and the II. International Terminal Building bellows park area, as well as the new aircraft parking and access road apron lighting and the fuel hydrant system, c) Extension of teh existing access road by about 1000 m to the II. International Terminal building, d) Construction of the new tower and technical block, e) Construction of the new fire brigade building, f) Construction of speed taxiway to the existing runway, g) Construction of local road and surrounding wire fence, h) Construction, furnishing and environmental arrangement of the independent CIP building of 1500 sq.m. size, i) Construction and environmental arrangement of the Police Department s building of 1200 sq.m. size, j) Improvement, arrangement and landscaping of the area of 150,000 sq.m., k) Gate A Building renewal and entry-exit road arrangement task. Those of the facilities made by means of the supplementary contract, except for building 15 additional check-in counters, have been transfered to the administration following the completion of their construction and they shall be operated and controlled by the administration. The essential nature of the contractual relaton between the administration and the Company in Charge is determined by the Implementation (Concession) Contract and the other 3 contracts are their supplements.

The fulfillment of any public service by any corporate body pursuant to an administrative contract, the capital, profit, damages and loss to be born by the corporate body, is called CONCESSION. The business frequency of the management or difficulties in finding resources when confronted with requirements, sometimes necessitates the use of this method and enables the public service to be performed by the private enterprise. Contracts, the subject of which is the establishment and/or operation, transfer to any corporate body of the public service, are defined as public service concession contracts. 1 The essence of the contractual relation is that upon the intention of a public authority (administration), who requires new assets (facilities) in order to fulfill any public services which it is in charge of by law, but is unable (or does not prefer) to provide for the risks and financing of the investment necessary for this, to have the part of its duties related to Investment and Operation, as limited by a contract, performed in care of any corporate body (a Capital Stock Company or Foreign Company), the relevant corporate body accepts to produce and operate the work (facilities) in consideration of its payment (including profit) by means of the purchase by the administration or service beneficiaries of the goods or service produced by the corporate body within the operational period and authorizations granted to the latter by contract, and to transfer it to the administration at the end of the operational period free from all kind of obligations and committments, in a well-maintained, functional and employable condition free of charge, and that the corporate body undertakes the investment financing related to this. The above mentioned explanation may be evidenced by the following provisions of the Law number 3996: 97 The Build-Operate-Transfer Model: This is a special financing model developed to be used for the realization of projects requiring advanced technology and high material resources, and the payment of the investment amount (including any profit to be obtained) to the capital stock company or foreign company is effected by the purchase of the goods or services, produced by the company during the operational period, by the administration or service beneficiary. 2 According to his law, any investment and services made by the capital stock company or foreign company shall, upon termination of the contract, automatically pass over to the administration free of charge and free from any obligations and committments, in a wellmaintained, functional and employable condition. 3 According to the provisions of the Code of Obligations, the Public Service Concession Contract is also a Proxy type contract. However, since the contractual relation between the administration and the Company in Charge also comprises the production of work, it may be described as a hybrid contractual relation, the dominant character of which is proxy. While the 1 Decision no. 1995/23, Part IV of the Constitutional Court, Analysis of Principal Cause A-2 2 Law number 3996, Article 3a 3 Law number 3996, Article 9

Proxy Contract (Implementation Concession Contract and Management and Operational Contract ) constitutes the dominant character of the contractual relation, the aspect of Work Contract is represented by the Construction Contract and the Supplementary Contract. However, the actual owner of both the Work (facilities) as well as the services is the administration. The expropriation procedures necessary for the investments and services foreseen in this law are realized by the administration in accordance with the provisions of the Expropriation Law number 2942. The property of the real estate expropriated belongs to the administration. 4 Administration means the public institutions and establishments (including public economic enterprises and funds), which are authorized to make contracts with any capital stock company or foreign company in order to ensure the investments and services foreseen in this Law to be realized in the framework of the build-operate-transfer model, and which are the actual owners of the service. 5 98 Consequently, upon the acceptance of the task (starting with the date of temporary acceptance) the property of the work (assets and facilities) belongs to the administration. Whereas the Company in Charge stands proxy for these assets until the date of transfer, on the date of transfer (if at the end of the contract) the position of proxy is removed and the assets are transfered to the administration based on the conditions determined by the contract. It is very explicit that the assets are public property. Whereas the Company in Charge uses a part of the assets which has been determined by the contractual terms and conditions and which have essentially been produced by itself in order to provide for the assets amount (including also profit, being the main purpose), throughout the Operational Period in order to perform the services entrusted to it in order to obtain the incomes determined by the contractual terms and conditions. It is a comprehensible circumstance that as a result of this usage, assets shall loose their original value due to wear and tear in time in comparison to the date of acceptance (Temporary Acceptance). In this case, there is a decrease in the original value of the Work which the Company in Charge has undertaken to built and deliver to the administration. The provision of Article 33 has been included in the contract to compensate for this loss of the administration (Implementation Contract Article 33): The Company in Charge is obligued to reserve the amortizations of the facility, which it is operating, in the form and in accordance with the principles stated in the Tax Procedure Law. The amortization periods of any fixed assets, the amortization periods of which have not been stated in the Tax Procedure Law, shall be determined by the Company in Charge to be not less 4 Law number 3996, Article 10 5 Law number 3996, Article 3d

than 10%. The said accumulated amortization amounts shall be transfered to the Administration during the transfer of the facility. However, for the part corresponding to the amortization amounts reserved every year, the Company in Charge shall deliver to the administration a tender guarantee (PERFORMANCE BOND and PERPETUAL) in US Dollar to be provided based on the Central Bank s foreign exchange sales rate of that date, within four months following the completion of the year, and shall confirm it with certified financial statements. Accordingly, the Company in Charge shall, at the end of the task, pay the share of wear and tear according to the reference Amortization Lists and deliver the Work with its value at the date of Acceptance. However, there shall not be paid any amortization for new assets, the proxy (operation) of which has not been entrusted to the Company in Charge. It has been determined in the Contract, the proxy of which assets shall be given to the Company in Charge and the operation and control of which shall be held by the administration. The same is applicable for incomes. They have been described in the contractual documents and their supplements. There is very few or no indefiniteness in this matter. That is to say, in its legal sense, the terminal and the public services here have not been privatized. The investments have been caused to be financed by a corporate body, the work has been created and the administration, to pay for this, has given the Company in Charge proxy in terms of certain rights, incomes and authorizations (as outlined by the contract) provided that its own responsibility/control survives. In short, the Company in Charge has been granted the concession of using a part of the assets and obtaining a part of the incomes. 99 While in the Build-Operate-Transfer model, the state aims at establishing a system which is able to work economically within the dynamism of the private sector, far from political and administrative pressures, capable of operation under realistic employment conditions, based on competition, productive, efficient and of low cost, the investor strives at completing the work as soon as possible and to start making profit after having provided the amortization of the capital which it has used. It is natural that the investor wishes to complete the investment, which it shall operate and obtain profit from, soon. Therefore, it is a primary target for the investor to complete the manufacturing process in a minimum period and to extend the operational period. Based on this principle, the period to pass from the site delivery until the date of commissioning has been announced as 20 months (in the general meaning, the construction period). In case of completion prior to this period, the period gained shall be added to the operational period. When the consortium, which has been awarded the contract, has offered a more suitable period than the other participants for this determining period items and has thus been awarded the contract, it had been confronted with two very important technical and financial planning matters; The necessity arouse to complete the construction in the period foreseen by the contract (and even in a little shorter time if possible), because the prolongation of the construction

would shorten the income-producing operational period and lessen the chance of covering the expenses entirely provided by the consortium and move into profit if possible. Another important element was the continuation of this race against time in an area surrounded by narrow limits restricting the movement flexibility in technical procedures and of the services of the existing operating facility, moreover while working so close to it, without delay. On the other hand, the completion of the construction work as soon as possible and the commissioning of an important public facility in time (and even in a shorter period if possible), was the preference of the relevant administration, the State Airports Administration as well. The Administration has mentioned this desire by the description the period resulting from the early completion of the construction shall be added to the operational period offered. 100 The fact that the Antalya Airport New International Terminal Building task is an investment requiring advanced technology due to its nature, has brought along with it the risks encountered in the project and the necessity to manage these risks, due to the factors such as high costs and that some establishments are parties within the project. 4.5. Management The stages of the Antalya Airport New International Terminal Building Task and the solution of all activities included in these stages within an integrated system has enabled the project s completion in the most suitable time. These stages may be outlined as follows; - Project production, - Planning, - Materials and Logistics Follow-up, - Purchase Decisions, - Payment Schedule, - Budget, - Cash Flow, - Execution/Daily Job Orders, - Work Schedule Updating, - Progress, - Measuring and Evaluation, - Cost Control, - Stock Control, - Profit/Loss Analysis.

For simple projects in a small organization, milestones agreed, some check-lists and some persons to execute the project would be sufficient. However, for projects such as the Antalya Airport New International Terminal Building Task, a more structural approach is necessary to establish and operate the project, to follow up its progress, to solve its problems, to reach the product to come up finally and to close the project. Moreover, taking into consideration that the project is worked up against time with the logic of a race, it is obvious that the manufacturing process has to be planned very well. In order to understand the methodology applied for the Antalya Airport New International Terminal Building Task we have to take a look at the life cycle of the project. A detailed life cycle has been planned with time-focus depending on the size and type of the organization and the project. The benefits of using the methodology, apart from its guidance to this project, may be summarized as follows: Preventing the risk of the project s being unsuccessful Its completion as soon as possible Establishment of the cost-profit balance at optimum level Increase of efficiency and productivity Increase of quality Arranging communication Efficient project management becoming standard, thus being independent from the persons and repeatable. 101 The most important point which has to be taken care of here is to choose the methodology most suitable for the organization and the project.

Pre-selection PRE-CONSTRUCTION ASSESSMENT Project Preparation CONSTRUCTION ASSESSMENT Project Generation RESOURCE ASSESSMENT SUPPORTING STUDİES PRE-INVESTMENT STAGE Analysis ANALYSIS REPORT Negotiation and Contract Expanding Investment OPERATIONAL STAGE INVESTMENT STAGE Engineering Design Newness, Invention 102 Renewal Investment Rehabilitation Investment Training Construction Works Trial Production and Employing Personnel to the Work Figure 4.7. Antalya 2 nd international flights construction production cycle 4.5.1. Planning and organization of the construction process The construction s management and building has been realized by the Project directorate within the structure formed by the board of directors of Çelebi-IC A.Ş., constituted by the Çelebi- İÇTAŞ consortium. The performance of the task has been ensured by awarding the contract of the relevant task in all branches to competent subcontractors, and the project directorate has been in a position conducting the organization planning coordination controlling works. The control organization s mechanism formed by the State Airports Administration s Directorate General, being in the position of employer, has also been described by a diagram. The conduct of construction activities comprising an extensive task and works in many disciplines, certainly requires a serious planning organization coordination. Under circumstances such as these, there are the risks that tasks of different disciplines may collide with one another and cause blockages. However, this risk has been removed by the sensitivity and great efforts shown

both by the Administration as well as the constructor firm, and undoubtlessly, a successful task has been achieved. The sensitivity of the control organization in matters requiring fast and justified decision-making, and the efforts of the administrative authorities in this matter has created this positive picture. The disadvantages, constraints, risks of the realization of such a great construction on an operative airport, which features a quite intensive traffic, are quite much. These problems coming up in terms of the management are as follows: - There is the risks that subjects such as works to be performed, material dispatch, etc. at an airport with a 24-hours intensive traffic, may not be solved at any time required, that is to say, that there is a constant risk delaying the work schedule. - The necessity of a permanent supervision in terms of security, of developing a stringent and serious security control mechanism as per the task s position, the sensitivity of chosing the personnel by considering this matter at length - Contractual constraints. Necessities resulting from the necessity to complete the work on time and the pressure caused by this 103 This kind of subjects gain importance in the functioning of the management, since decisions adopted, plannings made, organization, work programme are formed under this kind of criteria.

4.5.2. Importance and characteristic of planning It has been acknowledged by Contractor Firms that in large sized construction works a suitable planning shall faciliate the flow of the works, increase technical and financial efficiency. The nature of the special tasks in Airport Terminal Buildings has made work programming and planning a subject, which has to be handled severely. The Contractor Firms forming the consortium perform the works necessary in this matter. The great number of activities takes its place as general rule among the distinctive basic elements in a suitable planning as a significant data. Along with this, the fact that the nature of the activity groups is quite different from each other constitutes another important parameter for programming. If a great number of various procedures can take place at distances physically and geographically far from each other, another main parameter increasing complexity would have arisen. Taking a look at vertical section from each of these three important parametric components, another factor of different nature surrounding the incident may be displayed in the restriction of time. 104 In the terminal buildings made with the B.O.T. model, all of these essential properties have been present all together. The number of independent activities may reach thousands. With a very short summary, all of the activity groups consist of infrastructure and superstructure construction works, electro-mechanic arrangement and assembly works consistent with built components, preparation of all business operations based on extensive computer application, and a great number of sub-activity groups which are associated with advanced technologies and each of which features different properties within itself. Whereas the other characteristic, which concerns all of them together and which creates a real pressure component on all its operations is that time was really short. This results from the implementation of the Built-Operate-Transfer model. With this view, it has been necessary to make a very extensive planning based on advanced work programming techniques. Important computer programmes known are put into operation from the construction preparing period.. Besides, the sensitivity of these basic parametric components to the least time deviation in implementation requires frequent updating. 4.5.3. Cumulative elements in planning In public investments it is desired that the work is completed and the facility is put in commission as soon as possible. Since delays in the Built-Operate-Transfer model are against the contractor firm, the necessity of making faster and high quality work results from the nature of the work. The quarterly investment, mobilization, finance resources approval and the minimum 20, maximum 30 monthly construction periods as well as the operational and transfer period end

designed in the tender preparation process, are shown as important components. The operational periods have been a factor for the contract to be awarded to the contractor firms. These periods are presented as bid as a result of the firms very detailed and careful studies. Due to the desire to complete the task in a fast manner, the senior and subordinate management degree has been formed of personnel members with fast and high quality work completion experience. A very extensive and detailed work programme arrangement is required in terms of implementation-oriented planning form. However, the successes displayed in the work programme implementation, despite its being geographically widespread and the great number of activities, a short time after the start of the work, has encouraged the persons in charge of the implementation as in the example of Atatürk and Antalya airports. Based on this, they could start to design further shortening of the work completion period and drawing the date of commissioning a little earlier. As a result, it has been possible to shorten the period of the facility s commissioning by 7 months and 8 days in the example of İstanbul, in comparison to the one determined in the tender preparation period, that is to say, by 25% considering the total period. In the Antalya International Terminal Building, a shortening of 10 months has been aimed at and this has been achieved. It is considered by the authorized persons, for just, that this is a significant performance. These procedures of shortening the period and drawing the commissioning into service to an earlier date, has given rise to new complexities and critical positions in terms of the time limit and constraint point of view. For instance, the issue of conducting the site implementation in accordance with the time conditions determined by the programme on the spote came up as well. 105 The project preparation and detailing works had to be conducted parallel to the construction implementation. Despite the fact that this parallellism has been realized by the implementing consortiums in a very efficient manner, minor communication and adaptation difficulties not delaying the general course, between the project preparation and implementation in time, was inevitable. Architectural and engineering projects were the projects of the first terminal and these projects had to be revised pursuant to the contract in accordance with the requests of the administration. These revisions were practically equivalent to the formation of a new project. This means that the existing projects could even be considered behind the first draft. Thus, it was known as a data since the beginning of the work that the design projects had to be completed parallel to the implementation. In this framework, the problems brought along with fast project preparation due to the time limitation, shall be described in more detail in the later sections. These matters have been another component which has to be taken into consideration in the work programming and planning.

4.6. Management System 106 In the B.O.T. model, the payment of the construction amount including the financing and profit related to the production of the work, is covered by means of the payment of the incomes, allocated to the contractor firm related to the Operation, by the administration or the consumers. As in this project sample, interested firms generally compete based on the total Contractual Period being construction + operation, in consideration of the acquisition of the revenues determined in the contract during the operational period, for the production of the facilities (work) described in the tender documents and its transfer to its original owner, the administration. An optimum period for construction is stated in the tender documents. In this project, the investment period has been determined as 20 months in the contract. The interested party bidding the shortest operational period after the construction period is awarded the contract. However, the construction period s lasting longer than the period foreseen does not extend the total period offered. This means that it decreases the contractor s operational period and consequently its incomes. The contrary is accurate as well: i.e. if the contractor completes the construction of the work in a shorter period, the operational period extends and its incomes increase. In special, the construction period in the contract of the Antalya Airport II. International Terminal project has started on March 30, 2004, being the site delivery date, and has been foreseen to be completed at the end of 20 months ( end of November 2005). Whereas the next operational period has been offered as 34 months 27 days. However, the Company in Charge has also aimed at the operational incomes in the peak period (summer of 2005) and has therefore aimed at completing the construction period and commence operations 8 months earlier prior to the tourism season (end of March 2005) and thus start to obtain incomes and to gain the incomes in the tourism season ( April-October 2005) as well. It has also evaluated the construction strategy accordingly. The organisaton diagram formed has been designed for the realization of this, too. As a result, the construction speed is the most fundamental objective generally in all B.O.T. projects and especially in this project. The increase of speed without compromising quality in the construction strategy is possible by the evoking a great professional/specialist force in a speedy and efficient manner, taking also into consideration the acceleration costs and risks if possible. It may not be thought that a new firm (Company in Charge), having been founded just to conduct a contract, holds such a great force of professionals and specialists itself, so it is clear what to do: to divide the works, and to entrust each work to the responsibility of the relevant specialist/professional firm by sub-contracts in a speedy and efficient manner. The method chosen for this has been the contract method. The Company in Charge has, both by itself as well as through the General Sub-Contractor, successfully conducted about 600 sub-contracts within 1 year. This is a number of sub-contractors

much above the one accustomed. On the other hand, this element has been the important point of the strategic success obtained as a result of the construction period (the construction of the terminal has been completed within a record period of 11 months and commissioned on April 7, 2005). It is not possible that any public administration neither prepares, puts out to tender nor conducts/manages any sub-contracts of this density in a short time such as this. This is the important point of the advantages brought by the private sector contribution. A facility, which has been equipped with advanced technology with construction value of 128 million US$ not existing in the country in April 2004, has been built in a period of 11 months and presented to the service of the country s economy. Therefore, the public benefit resulting from the participation of the private sector to the public services and the positive difference which it creates, has been practically evidenced. Whereas during the execution of the project, the overlapping of the project preparation process and the construction process represents the most important difficulty in the execution. The administration has just given the first drafts of the existing I. International Terminal as annex to the tender documents and in the technical specifications has just described the II. International Terminal, which it requires, without giving much detail. The fact that it is requested that the Terminal II resembles the existing Terminal I in terms of its architectural concept and that matters requiring difference have been described verbally has not solved the problem. The administration has requested that the first draft and the implementation project for the Terminal- II and its supplements are produced by the Company in Charge during the construction period and submitted for approval. 107 The consortium being awarded the contract, has rapidly executed contracts with the project preparation firms after having made the contract (Feb.24, 2004) and has passed over to the stage of producing the (architectural, static, electric and mechanic) first draft design. However, as per the site delivery date (March 30, 2004) about one month later, the first draft design could not be progressed to the desired extent. The first draft (concept design) is the stage preceding the realization of the implementation design supposed to allow for the construction and since it determines the basic design principles, it has been necessary to obtain the approval of the project author and the administration in every stage. It has been necessary that the firms having been commissioned for the project preparation, realize long and detailed discussions/meetings with both the Project Author as well as the administration personnel. Here, another controversy has come up as well: the administration s personnel in charge of controlling and approving the project preparation have claimed that it would not be accurate to approve and/or partially approve any first drafts without seeing the projects developed full detail (implementation projects), material/equipment choices. On the other hand, the Company in Charge, which is under time pressure, is obligued to obtain approval in order

to start manufacturing and parallel to manufacture. Whereas the administration s personnel is not willing to make any gradual approvals without seeing the entire implementation design. The criteria of the Company in Charge and the administration (the personnel representing the administration) have featured differences upon this problem. The Company in Charge has worked up the construction site mobilization works, which the latter has started in the middle of March 2004, to a great extent in the middle of April 2004, and has ensured the entry of the construction staff to the construction site premises in the middle of April 2004. Mobilization has continued for 1 more month after this date, but on this date it has passed over the critical line. 108 The Company in Charge has started with the stripping off and excavation activities on the terminal building area on April 1, 2004. Upon arrival at the last week of April 2004, the building s excavation had been worked up to an extent enabling the beginning with the fundamental reinforced concrete. However, since the static design presented to the administration was still not approved, the reinforced concrete permanent manufacture could not be started. Therefore, with an unofficial agreement made on static projects as a result of a loss of 2 weeks, the first permanent reinforced concrete could be poured on May 12, 2004. The problem of the project preparation related to obtaining the approvals of the administration could just be solved in August 2004. Whereas in August 2004, the reinforced concrete manufacture has been completed by 50%. The approvals given had not required the amendment of the reinforced concrete at any point. Consequently, it has been an advantage that the Company in Charge accurately analysed the position of the administration and continued by chancing high risk and has served the total success of the project. Likewise, the material/equipment approvals have also caused various discussions. The materials and equipment are also subject to the preliminary approval of the administration pursuant to the Contract. There have been controversies related to the project preparation as well. Likewise, this controversy has also been solved by the Company in Charge chancing high risk and continuing without approval or with verbal/unofficial agreements for the materials in the starting period. The result arising from this is that in the control and approval duties of te administration in the projects, its own personnel and the project targets may collide with one another. Taking into consideration that in this project about 1900 implementation project maps have been produced and more than 5000 types of materials have been used, the problem turns up in an even more important form. This problem may be solved by the administration s delegating their control and approval liabilities related to project preparation and material to professional firms. And this issue is applicable for all investor public administrations.

This problem shall be solved by the administration s starting to transfer this duty to professional firms as well. Upon development of this process, a portfolio of specialized and well-established private firms in these areas shall turn up and form the market standard, and the public benefit shall be continued to be maintained in this way. In many advanced countries, the process has developed in this direction. For instance, in England and in France, firms of worldwide scale have turned up in terms of design, quality management and project management, and now the standards in these areas are determined by these firms. The decision processes related to the splitting-up of the task of the Company in Charge and their being awarded by contract to specialized firms has been continued rather efficiently and without any problem. However, the fact that the project preparation and approval processes could not ensure relatively the same success has resulted in the increasing pressure of the manufacturers on site on the project managers. This pressure has caused the reorganization in the project management in September 2005. This reorganization being made toward the end of the crisis in the project preparation and material approval processes with the administration, it has not served the solution of this crises, but as a result of the reorganization the Company in Charge has activated the decision-making processes within itself and has adopted a more efficient usage of the remaining time by binding them to the accurate personnel addresses resulting from the experience. 109 4.7. Method of Integration The realization of every plan and project is the subject of the Project Management. Whereas the realization of integrated and complex plans and programmes seems to be possible with Integrated Project Management. The Integrated Project Management are the entire organizations and processes, which uses a series of developed instruments in its functions and processes, based on the interactive development concept supported by feedbacks. It is the capability of looking at wide-angle to all kind of projects, simple or complex, to the processes in all of their phases and their reference groups, consequently to life; interpreting issues and processes with realistic and practical approaches. In the integrated and complex project and programme management, skills of advanced level are required. The integrating management ensures the coordination of all units, which form the project, with each other. It is the most important type of management, requiring an intensive work, necessary for the execution of the project in the requested period and as appropriate to its aims. [43] The processes ensuring the coordination of the components constituting the project of

the Antalya 2 nd International Terminal project have been defined very well. In general, the entrepreneurs, who desire to invest in the framework of the BOT model, are given the feasibility reports (including technical examinations to a certain extent) by the relevant public establishment during the tender stage. The better these reports have been prepared, the less problems the contracts based on them shall create in the future and the more they shall lead the parties to any disputes. In case these works are reported without being made very well, it is obvious that they shall bring along great problems. The entrepreneur has almost not any chance to consider at length the technical data of the feasibility report in the limited period at this tender stage. Consequently, the planning phase related to the project becomes the most important element. 110 In the construction of the Antalya Airport New International Terminal Building, the labour force based planning method has been prefered. Since the result desired to be reached in the planning is the work s period of completion, the man-hour data is required for the formation of this process. Provided that the other factors affecting the work s period of completion (financing, status of material, etc.) are suitable, it has been tried to decide about the period of realization of the work, the physical quantity of which is determined. Since the time in which a worker is able to do a manufacturing (man-hour) and the work s quantity (length) doesn t change throughout the period of the project, it is possible for us to reach the work s completion date with the number of workers to be decided by us and undertakes the key function in problems arising for the time control of the project. At the project planning stage, the contractor group has formed a project orientation and observation unit within itself starting from the project beginning phases. The unit formed has fulfilled the duty of ensuring consistency of the complex connections between various disciplines of the project preparation by the principle of race against time and speedy work completion without compromising quality. At the phase of the plan s execution, the architectural project author bearing the project liability and the project groups (sub-contractors in charge of all technical-technological installation projects, mainly static, infrastructure, general and special installation mechanic, electromechanic and electric-electronic) with whom they cooperate during the preparation of the technical projects were already conducting a collective working based on interdependent and regular information exchange. However, with the special and intense pressing affect of the time factor, the contractor designers have established an office at the construction site in order to ensure this coordinated cooperation which had become critical. Periodical meetings for weekly observation and decision-making for the following week have been held under the participation of all persons in charge and authorized in order to ensure the supervision of change. It has been ensured that in the meetings attended by a less number of persons in charge and authorized in the course of the week and even days, the necessary amendments are discussed and those considered necessary are implemented.

Considering the whole of the construction process in the framework of the integration management, it is seen that the knowledge and organization capability of the contractor firm stands out. In a significant, complex and large space project such as this, the realization of the construction in the period and quality aimed at, shows that the management concept applied has been successful. Executing together thousands of employees and again thousands of work items, within the limits of the work schedule, are efficient results of the integrated construction management. PROCUREMENT MANAGEMENT QUALITY MANAGEMENT TARGET MANAGEMENT SCOPE MANAGEMENT INTEGRATION MANAGEMENT TIME MANAGEMENT 111 COMMUNICATION MANAGEMENT COST MANAGEMENT RISK MANAGEMENT HUMAN RESOURCES MANAGEMENT Figure 4.8. Construction management integration components 4.7.1. Scope Management It has been ensured that all procedures necessary for the successful conclusion of the project are included in the project. The methods Beginning and Mobilization Phase Definition of Scope Planning of Scope Verification of Scope Supervision of Change of Scope

have been applied and evaluations have been made in the framework of the planned work programme. The sub-components of the scope management may be outlined as follows: 1- Contents (Programme of Requirement) 2- Implementation of the project (first draft and site allocation) 3- Target-making 4- Determination of the project s cost aspect and provision of financing 5- Use of resources 6- Technical qualification and applicability of the project 7- Man and workforce management 112 8- Reaching work programme targets 9- Development of construction methodologies 10- Determination of operational requirements 11- Test and Commissioning. The contents of the airport international flights projects, the construction of which is realized by applicaton of the BOT model, should be planned by taking into consideration the geographic, socioeconomic-political, tourism, trade and potential demands of the region where the project shall be implemented. The programme of requirements determined (in terms of quality, quantity and function) should be accurately solved as first draft and its optimum consistency with its deployment on the land assigned and with the other components of the area should be provided. The target should be to synchronously operate the mechanisms in the formation of all parameters, i.e. Time factor, Cost factor, Quality factor, Qualified workforce factor,

Communication factor, Risk factor, Logistics factor, Financing factor. In the construction of terminal buildings by means of the BOT model; In order to enable the determination of the target budget; the cost studies of the project applied should be made and the financing provision models should be established. Use of resources; return calculations have to be made since they have to be evaluated as equity and financing credit (short-term and long-term). It should be known that the project s solution in terms of technical construction and the fact that the technical team has feasibility experience is a condition necessary for success. Stability and confidence is necessary. It should not be omitted that man, workforce and equipment management is one of the leading important components of scope management. 113 Target intermediate ends and general ends should be encouraged and measures should be taken for deviations. The determination of construction methodologies and productivity tables should be constantly evaluated. It should be ensured that professional operational techniques are experienced together with the project during the construction stage and the awareness should be achieved that enabling the return of functional requirements in the construction of the project shall prevent any unnecessary investments. The establishment of test and commissioning principles, the provision of operational staff at the construction stage should be the general principle and guideline. 4.7.2. Target management The contents of the BOT model Airport International flights projects have been planned by taking into consideration the geographic, socio-economic-political, tourism, commercial and potential demands of the region where the project shall be implemented. Target intermediate ends and general ends should be encouraged and measures should be taken for deviations. The determination of the construction methodologies and the productivity

tables have been constantly evaluated. For a successful target management, target determination, target control is important. The success aimed at in the construction has been achieved by ensuring in the project all procedures necessary for the successful conclusion of the project. Target denotes the status which wants to be reached or realized in the future. By determining the aim and target, it is evident from today where, in what condition and position one wishes to be in the future. [52] In the process starting with the site delivery on March 30, 2004, the most important target has been to complete the investment period, which has been stated as 20 months in the contract, as soon as possible and to add the period gained from the investment period to the period of the operational period. One of the targets is also that the task is completed in the quality aimed at with an investment amount not exceeding much the tender amount which has been determined as 70.555.000 US$. 114 In order not to remain from time to time behind the work schedule to reach the determined target, the manpower has been increased and this has caused an increase of costs. By means of the meetings and evaluations made, target control has been frequently made and the critical stages of the task have been reviewed. As per the end of the task, the issue of putting the facility into operation as soon as possible, which is the preferential target, has been successful upon the construction process completion in 11 months. Upon the addition of the supplementary period of 9 months to the operational period, an important gain has been obtained in the operational period which is the investment s return phase. Besides, with a value much above the investment amount of 77.350.000 US$, which has been accepted by the consortium firms in the budget planning, a total cost of 99.737.956 US$ has been reached. The speedy conduct of the task has been an important factor in reaching this figure. In the target controls made during the work on weekly and monthly basis, it has been seen that the completion of the task in the period aimed at is possible, but that the cost requested could not complete the work. After this stage, the target regarding the cost has been changed and the completion of the task on time has been chosen as the only main target.

Table 4.3. Rates of the Manufactures within the total construction RATES OF MANUFACTURES WITHIN THE TOTAL CONSTRUCTION CONSTRUCTION WORKS 53,00% MECHANICAL INSTALLATION WORKS 11,00% ELECTRICAL SYSTEMS 14,00% ELECTRONICAL SYSTEMS 4,27% ELECTRO-SECURITY SYSTEMS 4,22% BAGGAGE HANDLING 4,82% PASSENGER BRIDGES 4,18% ESCALATORS 0,85% ELEVATORS 0,48% WASTE DECOMPOSITION AND DESTRUCTION SYSTEM 0,39% AIRCRAFT FUEL HYDRANT SYSTEM 2,79$ CUMULATIVE GENERAL PROGRESS 100,00% 115 4.7.3.Time management Time management consists of planning and programmes, which are the necessary procedures for the completion of the project within the time foreseen. Factors influencing the time management processes in construction may be outlined as follows: Stability Confidence and Trust (ability to be a team) The project s being solved as implementation Continuity of finance Provision of sufficient labour force and equipment Reaching work programme targets Logistics (procurement of domestic and imported materials) Communication Continuity Morale + motivation + condition.

We may say that man and finance factor is the distinctive component directly affecting time. Time management may achieve positive values for the purpose of the project s managers to be compatible with the other elements, but even if the conditions are appropriate, this may also cause disposals outside those managing the project. Namely, it has to be emphasized that even if finance is always important in the planning of the task, continuity and morale + motivation + condition is a factor in the success reached in projects with targets and in reaching the time target. 116 The processes to ensure the completion of the project on time have been made by providing constant updatings, by means of software prepared for work programming. The updating procedure has been realized by the examination, evaluation and interpretation of the Monthly Activity Reoprts in detail, through a more realistic revision of the planning of the subsequent month. In the planning of the Antalya Airport New International Terminal Building Task, there is a complex internal composition displaying interactive connections with much activities. Accordingly, the concept of regular distribution of the resources in order to determine the flow order and consequently to form an operational programme has been kept on the foreground. In order to prevent that components omitted during the stage of preparation of the work programme due to the synchronous continuation of the manufacturing process and the planning process, and unexpected activities, which arise at the construction site and which may cause prolongation of the period, exceed the target delivery period, the work programme has been revised and the remaining or probably remaining activities have been determined, and workforce, equipment or material support has been provided as soon as possible and thus, deviations which may occur in the work programme have been kept at minimum level. WORKFORCE BASED PLANNED/REALIZED PROGRESS % 120.00% 100.00% 80.00% 60.00% 40.00% 20.00% 0.00% 67,99% 52,87% 52,00% 36,78% 26,34% 36,78% 16,76% 26,34% 16,76% 4,09% 9,76% 4,09% 9,76% May June July August September October November 95,11% 95,45% 80,79% 91,32% December January February March Planned Workforce Progress According to Revised Total Workforce Figure 4.9. Antalya 2nd International Terminal first manufactures

The works to be performed have been defined. The works to be performed have been put into an order. This arrangement has been made by taking into consideration any uncertainties which may arise in case some new work groups cannot start before certain work groups, which are partially parallel and connected with each other, end. The estimate of their durations has been determined by consulting the personnel supposed to manage and perform the said work item. The development of the time schedule has been determined by using the Critical Orbit System. Thus, critical activities have been know beforehand and ways of solution have been researched before the problem occured. The supervision of the time schedule has been ensured by the Monthly Activity Reports and the daily construction site information flow. The work programme formed by the above stages, the man-hour values throughout the 117 Antalya Airport New International Terminal Building Task, the time schedule has been attempted to be supervised by increasing logistics and equipment, and has inevitably brought along the high cost element. PLANNED/REALIZED WORKFORCE (DAILY WAGES) 300.000 250,000 200,000 150,000 100,000 50,000 0 May June July August September October November December January February March April Planned Workforce Realized Workforce Figure 4.10. Planning of workforce

The necessity to conduct, generally synchronously, a rather high number of work items, namely 265 items, which are included in the scope of the task, within the framework of the periods determined in the work programme, has indicated a critical stage in time management. In this framework, sometimes the same item of work has been divided up to several subcontractors by means of contracts made with about 600 sub-contractors. Again for materials, systems, devices and equipment, the overseas supply and imports of which require a long process, meetings have been held from the very beginning of the work and their coming in to the construction site within the planned time section has been ensured. WORKFORCE BASED PLANNED/REALIZED PROGRESS % 118 120.00% 100.00% 80.00% 60.00% 40.00% 20.00% 50,64% 37,29% 50,64% 26,05% 38,04% 18,74% 26,05% 3,04% 7,13% 12,01% 18,74% 3,04% 7,13% 12,01% 64,21% 63,64% 83,74% 79,71% 94,25% 99,37% 100% 0.00% May June July August September October November December January February March April Planned Workforce Progress According to Revised Total Workforce Figure 4.11. Workforce planning progress graphic The special situation brought by the BOT projects in the scope of time management has to be briefly mentioned. In the BOT model, the payment of the construction amount, including financing and profit, related to the production of the structure, is covered by the payment, by the administration or the consumer, of the incomes allocated to the contractor firm related to the Operation. As in the present project sample, interested firms generally compete upon the total Contractual Period being construction + operation, in consideration of obtaining the incomes mentioned in the contract during the operational period, for the production of the facilities described in the tender documents and ultimately their transfer to their original owner, the administration. An optimum period for the construction is stated in the tender documents. The investment term in this project has been determined in the contract as 20 months. The

interested party bidding the shortest operational period after the construction period is awarded the contract. However, the construction period s lasting longer than the foreseen period does not extend the total duration. That is to say, it lessens the contractor s operational period and consequently the contractor s incomes, and vice versa: i.e. if the contractor completes the construction of the work in a shorter period, the operational period lengthens and the incomes increase. This circumstance explains the significance, pressure of the time concept in BOT projects. 4.7.4. Cost management The first estimate summary should be prepared according to the implementation and detail projects prepared in the scope of the general requirement programme. In order to enable this study to be very accurate, the manufactures in the project have to be determined very well and care should be taken for the first estimate length establishment and pricing. The first estimate should be observed by revision as monthly cost tracking. In this framework they may be considered under the following headings: 119 Construction building expenses (rough construction work, delicate construction work), Infrastructure expenses, Expenses of electrical & electronical works Expenses of mechanical installation works (mechanical installation and equipment), Expenses of IT works, Expenses of project financing, Expenses of project value, General outlays, Customs and tax expenses. It is necessary to establish sufficient technical office infrastructure capable of performing these evaluations and reportings on a monthly basis. This staff, which has taken place in the Antalya 2 nd International Terminal implementation, has made the cost evaluations of the BOT model project and has ensured functionality by reporting to the project management any probable increases and deviations.

As a rule; Foreign exchange rate based on foreign currency has been followed up and costs have been evaluated based on the exchange rate on the date on which the expenses have been incurred. 120 Changes in the project (increases decreases) have been reporting along with their respective reasons and their future affects on the tables have been determined. Cost analysis have been made considering that the influences, demands and requests of the Administration on the project could be the effects in the BOT model. It has been seen that this influence came up quite significantly in the later stages. There have been increases of cost as a result of certain manufactures, which have not been clearly defined in the specifications, being made as requests of the administration. It has been strived at ensuring that mechanisms, by which collective goods service procurements shall reflect to bargaining and competition, are constantly kept vivid. In some manufacturings, there have been decreases of cost due to direct purchases from the manufacturer. It should not be omitted that in the BOT model there shall be the effects of extra workforce and other factors brought along by speed in the works. Especially the increase of general outlays and any probable deviations in the project cost should be well estimated. As a result of this issue s not being considered sufficiently, there has been a higher manpower/cost than expected at the Antalya 2 nd International Terminal. The most important factor of this increase is the desire to accelerate the construction process and to put the building into operation as soon as possible. The essential determinent of cost management is time. Using time may require unplanned spending of money. However; since in the BOT model the facilities completion and commissioning prior to the period of the administration ensures the necessary yield and prestige, it should be prefered. Deviations which may occur in the planned estimate have been checked by monthly updatings after the first estimate and the controlled awareness of these deviations in the investment has been the target of the cost management.

CASH FLOW DIAGRAM (20 MONTHS) Construction Expense Other Expenses Financing Expenses Use of credit Figure 4.12. Cash flow diagram 121 Cost management is a type of management providing the determination and control of costs to ensure that the project features the quality and properties within the budget foreseen beforehand. Who shall work for each work and how much they shall work, Whether additional resources shall be required or not, Constraints related to resources may affect the duration of the project. The periods have to be reviewed. By the resource planning, the total project resource requirement and distribution comes into being. A very important basic component ensuring the realization of the work flow in the process supposed to ensure the completion of the project with the budget aimed at and approved, is the issue of flow of money. An important element slowing down the implementation in many public investment tasks, of which the project preparation, work schedule and general planning studies have been conducted completely, is insufficient appropriation. Likewise, in case of somewhat large volume tasks conducted with private capital there may also occur an insufficiency of the finance support, even though this would not be as much as for traditional appropriation insufficiency in public investments. This may cause negative results such as the disorder of the time flow of construction works, the lengthening of duration and the increase

of cost in countries with high inflation. The evident advantage of the Build-Operate-Transfer method is that the work is not begun unless a strong finance guarantee has been provided. In the Antalya Airport New International Terminal Building Task Project it has been ensured to complete the task earlier than planned, by means of both the use of the contractor firms equity as well as credit support. Resource planning Cost estimate Cost budget Supervision of Cost Change 122 There has not been any problem in the flow of money during the course of the project upon right use of the methods. It is seen that the construction period has not been completed with the target cost desired to be 77.350.000 USD as explained in the target management. The Terminal Building could be completed with a total investment cost of 99.337.956 USD except for supplementary works. COMPARISON OF PLANNED-REALIZED RESOURCE EXPENSE ON A MONTHLY BASIS ($) 20.000.000 15.000.000 10.000.000 5.000.000 0 March April May June July August September October November Planned Outlays Realized Expense Figure 4.13. Comparison of Planned realized resource outlays on a monthly basis

EXPENSES (USE OF CREDIT/EQUITY) (US$) 8.000.000 6.000.000 4.000.000 3.000.000 2.000.000 1.000.000 0 3,571,429 168,976 1,646,550 1,219,938 1,517,866 2,503,507 3,810,323 2,699,163 3,810,323 744,827 3,703,710 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Months 722,317 3,171,489 5,580,909 792,872 5,140,752 1,395,227 5,395,687 2,285,188 1,384,922 4,674,502 1,168,625 4,206,432 1,081,608 4,201,531 1,050,383 1,709,285 427,321 2,689,120 672,281 Use of Credit Figure 4.14. Expenses Equity 123 8.000 7.000 6.000 5.000 4.000 3.000 2.000 1.000 INVESTMENT PERIOD USE OF RESOURCES (20 MONTHS) (1000 X USD) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Total expenses 1,166 1,719 856 1,647 1,215 1,518 2,504 3,810 2,699 4,449 3,612 3,964 6,976 6,426 6,745 5,843 5,258 5,252 2,137 Cumulative 1,166 2,884 3,740 5,387 6,602 8,120 10,623 14,434 17,133 21,581 25,193 29,157 36,133 42,559 49,304 55,147 60,405 65,657 87,794 20 3,361 71,155 75.000 70.000 65.000 60.000 55.000 50.000 45.000 40.000 35.000 30.000 25.000 20.000 15.000 10.000 5.000 0 Total expenses Cumulative Figure 4.15. Use of Resources in Investment Period

The most important reasons of this increase of cost are as follows: Increase of the workforce, equipment number required as a result of the desire to complete the task earlier than the investment period of 20 months 124 Manufactures which have not been stated in the contract and projects attached to the tender, and which have to be made during the task s implementation projects stage and conduct As a result of the desire to complete the task rapidly; the removal of some manufactures made, due to their being far from the quality required, and the same manufactures having to be repeated As a result of the psychological pressure brought along by the terminal building, which was of higher quality and more striking appearance than the 1 st International Terminal made before at the Antalya airport, expensive alternatives have been prefered for some materials and equipments. 4.7.5. Quality management The fact that the functionality of the structure is not removed for a short time during the process to ensure the provision of the project s requirements and that it continues the service expected from it over long years at the same level is a part of the quality philosophy. Thus, each component used in the construction of the facility has to comply with the quality conditions separately and the technical standards expected from it. The technical-technological equipment and materials bearing great importance on the aerodrome facilities are expected to keep serving over long periods with the same quality as in the term when the facility has been put into operation. In this context, all materials used in the Antalya Airport New International Terminal Building Project have undergone approvals of material under the control of the administration and experiments have been made on materials considered necessary under laboratory conditions, and thus their use have become unavoidable.

Quality planning Quality assurance Quality supervision The above methods have been implemented by obtaining common decisions with the administration. A very intensive control mechanism has been realized both by the contractor firm as well as by the administration in order to enable hundreds of materials included in the work scope to be of the desired quality. It has been ensured that the materials and systems stipulated in the technical specifications and projects as attached to the contract feature the minimum properties stated, whereas for those not defined, choices have been made ensuring the required performance by means of fast decision-making processes during the continuation of the task. The quality aimed at has been strived to be achieved, depending on the nature of the work, sometimes by tests on site, on the construction site, in the laboratory, sometimes in overseas factories. The joint venture company, as a controlling-supervising mechanism, independent from the administration and the contractor firm, has executed a contract with the experienced (bureau veritas) consultancy company, and this consultancy firm realizing the supervisions 125

independently has been efficient in the work s quality with their sanctions in the construction process. Quality Management Components: 126 Applicable project Planning and organization Technical documentation Efficiency of the technical team conducting the implementation Quality control mechanism supervising the implementation Obtaining technical evaluation and report results. Quality develops accurately with the attitude and conception of individuals and communities. Therefore, it should be ensured by the project management that the mechanisms are of structures supervising and controlling each other. The determination of the construction methodologies, the functionallity of the implementation techniques should be the basic determinent of the quality procedure. In order to ensure that quality is permanent and the results are evaluated, the necessary technical specifications, documentation and inventory should always be available to the task. In the Antalya 2 nd International Terminal construction, quality tracking forms have been issued for each manufacture and periodical checking tables have been established. The Administration s Control Board has checked whether the quality tracking forms provide the required technical construction criteria, and thus their realization has been ensured.

Tracking is the key and determinent of quality. Whereas technical efficiency is its detector. Persons stability and attitude has also been the determinent of quality management. Factors affecting quality are the care used for the quality of the construction process and the stages of converting the design into reality, the quality of the materials and equipment used, the way of their use, structure production management and their implementation continuity. [53] Whereas the structure s continuation of the service, which is expected from it, over long years at the same level is also a part of the quality philosophy. Each manufacture used in the construction of the facility has to be consistent with the separate quality conditions and the technical standards expected from it. The material used in reinforced concrete, steel or pretensioned concrete construction elements shall be the material most suitable for contemporary technical definitions, so that the structure s resistence continuity is guaranteed. Similarly, windows, doors and coating materials should be of a type which is most uniformly in appearance and which is capable of serving over the longest time without suffering from any tear and wear. It should also be expected that technical-technological equipment and materials, which are of great importance at aerodrome facilities, fulfill their function over a long time without falling off in quality in terms of the service rendered in the period when the facility is put into operation. 127 4.7.6. Human Resources Management In the course of more efficient use of the workforce related to the project, the mobilization of a workforce and equipment support much beyond the accustomed has been necessary in the Antalya Airport New International Terminal Project. A great number of personnel has been required for general management, orientation, planning, observation and quality control mechanisms which are experienced, qualified and feature a high business skill. Together with the sub-contractor groups and all their employees, a total working hour of 9800 man/day has been reached. Whereas the month, where the most persons have been engaged in a montly time slice in order to catch the work schedule during the manufacturing process, was February of the year 2005, and here 2085 employees have been active together. These data indicate the extraordinary density reached in terms of manpower mobilization. The working of this personnel in harmony, their management has been ensured by determining the following items by very serious studies: Organizational planning Establishment of permanent staff Forming teams.

128

In a construction organization with 600 sub-contractors and thousands of employees, the desire to reach the target by organizational planning within the task s team spirit could from time to time be a repressive element on the managers. By means of the management group formed separately by the joint venture company and the project manager, the main contractor firm, it has been desired to ensure that this pressure is converted into a form not affecting the performance. DAILY AVERAGE WORKFORCE PRODUCED ON MONTHLY BASIS 2.500 2.000 1.500 1.000 500 Daily Average Workforce 0 June 388 July 466 August 658 September 741 October 1,104 November 1,385 December 1,621 January 1,435 February 2,085 March 0 129 Figure 4.17. Daily average workforce produced on monthly basis This defines the processes of the appropriate production, compilation, distribution, storage and arrangement of the project information on time. It is also not possible to realize the task of furnishing all personnel serving at the stages of the project from the personnel employed in the designing stage, to the sub-contractor active at the worksite and to the worker employed on the field with accurate information on time without planning. In the Antalya Airport New International Terminal Building Task Project the Communication planning Information distribution Performance reporting techniques have been implemented in accordance with the requirements of the task and thus the necessary information network has been established. 4.7.8. Risk Management The aim of risk management is to complete a project at the time, cost and required quality level planned. The project plan is formed based on estimates. It always contains uncertainties. These uncertainties form a potantial risk.

Risks may change the course of the project in the reverse direction. Risk management includes the implementation of the necessary supervisions for defining these circumstances, preventing their consideration or lessening their affect, and the planning of alternatives. Risks may be described as the unability to reach the profit aimed at, the unability to complete the task within the course of completion aimed at and the unability to reach the quality aimed at. 130 Types of Risk Management Timing risk, reserving not enough time, Risk of cost, well calculation of cost, Technical risk, degree of difficulty in forming the product, Operational risk, the unability of the product to fulfil the requirements, Unforeseeable risks, changes of order, natural disasters, environmental factors, Foreseeable (but doubtful) circumstances, market changes, inflation, foreign exchange rate changes, taxes, etc. Processes for the determination, analysis of project risks and the implementation of the solutions are defined. [54] In providing the minimum time and maximum manufacturing balance in the Antalya Airport New International Terminal Building Task; the methods Risk definition Determination of risk dimension Planning against risk Risk decreasing supervision have been implemented. 4.7.9. Management of Procurement Taking into consideration that in this process defining the processes of procurement of any products and services, which shall be required for the project, from outside, the extent of amounts of the materials and service purchased and that any problems which may occur in the logistic course shall harm the entire project, this is obviously one of the most important steps for the progress of the project. The management of procurement comprises the supply of the necessary resources (workers, materials, equipment), the management of the resources for the completion of the work, the removal of the resources from the construction area upon completion of the work. Considering the effects of the material flow in the Antalya Airport New International Terminal Building Task on the task s duration, a purchasing team of 50 persons has been established on

the construction site in addition to the central purchasing unit of the contractor firm and its consistent working has been ensured by means of accurate organization. Suppliers of materials have been chosen among firms being reliable as much as possible and thus the flow of materials with accurate timing has been ensured. Even though this increases the costs, tenders have been used in order to ensure the supply on time of overseas supplied electrical, electronical, electro security and mechanical systems in order to keep the duration short, and firms specialized in their branch have been worked with. The technical-technological system definitions being one of the construction s most important components are stipulated by the administration in the attachments of the tender file at the very beginning of the task and may be divided into seven main groups. These are as follows: a. Electrical Systems b. Electronical Systems c. Mechanical Systems d. Mechanical Installation e. Security Systems f. Data Processing and Automation Systems g. Passenger bridges 131 There are a total of about thirty sub-systems included in these system groups, some of which feature extraordinary complex properties. The weight of the technical and technological systems in the terminal building project has constituted 30% of the cost, which had been estimated at the beginning and as per the form coming very close to that estimate at the end of the implementation as well. This numerical data is interesting not only in terms of the said systems technical characteristics featuring contemporary and special properties, but also in terms of its holding a cost share much beyond what is accustomed in building constructions. The planning of procurement has been ensured by applying the methods Planning of demand Making requests Choice of firm Contract management Execution of contract. A separate unit has been established in order to ensure the contract management and

132 any problems probable to occur have been tried to be aken under guarantee beforehand. The gigantic proportion of the facility construction and its programme against time has required the entry to and exit out of the construction site of a great number and volume of vehicles and devices. Many vehicles have served in this transportation work. The arrangement in the transportation vehicles entries into and exits out of the construction site has been the subject of an additional separate programmin and careful observation. 4.8. Financing of the project The most important phase of the tasks performed by means of the BOT model, especially in developing countries such as Turkey, is the supply of resource. In this kind of projects, generally the project finance method is applied. Establishments specialized in project financing provide resources to projects with profitability by means of the method of syndication through issuing bonds. The factors important for those providing the resources in BOT projects are the project s risk, the country s risk, the performance of the group making the project, its organizational structure, and human resources. In project financing it is essential that its return certainly requires a short time slice even if there is a feasibility, market research available, and even if it has certain guarantees. Therefore, resources are supplied by taking into consideration many variables such as the placement by equity by the party performing the task, the debt paying morale, the past offense of the country. The company in charge in the Antalya Airport 2 nd International Terminal project has been kept liable to provide the entire financing of the investment amount and to provide a minimum of 20% of the total investment costs from its equity, and the remainder from foreign resources (credit financing). Based on this necessity, the equity condition of 20% has been provided for

by the sponsor firms Çelebi-İÇTAŞ. The repayment of the principal, interest and all kind of financing expenses of the funding to be provided by foreign resources shall be realized again by the Company in Charge. Besides, the principal and interest payment terms of all kind of credits obtained during the operational period and/or any investment to be supplied by the Company in Charge have been limited to the contractual period. The entire project credit has been provided by the bank Garanti Bankasi in the scope of syndication credit. 133 Table 4.4. Investment financing (YTL) 1) Equities 48.102.958 a) Capital 33.000.000 b) Corporate Funds 15.102.958 2) Foreign Resources 127.319.850 A) Foreign Credit 127.319.850 Total Financing 175.422.808 4.9. Evaluations in terms of Construction Design and Technology of Aerodrome Terminal Buildings Made by the Build-Operate-Transfer Model The main headings of the aerodrome terminal buildings determined throughout the construction process realized by the BOT model and still continuing, are as follows. Constraints resulting from entering tender with first draft: The fact that tender has been entered with the first draft projects, which had been obtained by the Administration as a result of the competition, has caused serious difficulties during the construction term. Due to the necessity of starting a rapid construction process starting from the site delivery, architectural-

engineering groups are obligued to synchronously conduct the project production works while the work was continuing. The approval process of any projects, which may be started to be constructed upon approval by the Administration, has to be very fast as well. 134 At the stage of implementation projects, the occurance of manufactures not foreseen at the first draft stage result in conflicts or long lasting discussion courses between the administration and the contractor firms. For instance, an area and cost increase has occured due to the necessity to make the basement of the Antalya 2 nd International Terminal at another place than determined by the administration. Again, the realization of the tender of the 2 nd International Terminal with a report explaining the additional requests of the administration and the technological renewals of the 1 st International Terminal project, has been an item affecting the construction process. The area growth foreseen at the stage of implementation projects has increased by approximately 20%. However, despite the fact that pursuant to the relevant articles in the concession contract there has not been granted any period-cost increase to the firm, the discussions in this matter have affected the manufacturing process. In another example, while passing from the first draft project of teh Dalaman Airport new international terminal to the implementation project there have been many amendments not foreseen in the project. Due to the increase of sq.m. occuring on the apron area, the Administration had to grant an

additional period to the contractor firm. Since the basement, which has been partially arranged during the tender process, has been converted into a full basement due to static necessity, an increase of approximately 15.000 sq.m. has occured on the terminal area. Again, the terminal roof has been converted from steel to reinforced concrete as a requirement of static necessity. The contractor firm has requested additional period-cost increase related to these amendments. But the Administration has rejected this request since pursuant to the relevant articles of the concession contract amendments resulting from static necessity are under the liability of the contractor firm. The non-compromise in this matter is continuing and this circumstance has unfavourably affected the construction process. 135 There have also been similar difficulties in the other terminal projects. Certain requirements, which may arise as a result of any developments and technological improvements in aviation, have turned up as elements which must be made at the later stages of the project, since they have not been foreseen in the first draft. Accelerating the construction process: In case of completion prior to the period determined as investment period pursuant to the concession contract, the period gained is added to the operational period. This circumstance brings along with it the speedy completion of te construction process and the commissioning of the facilities in a short time, but does also contain a pressure-compelling-problem element on the part of both the administration as well as the contractor firm. This accelerated construction process has sometimes caused the starting of manufacture of the projects without approval, and sometimes the placement by the contractor firm of any order for any equipment and materials not chosen yet. Manufactures made according to any project not approved, had to be amended due to the revisions in the approval process. Whereas this has caused the product-effort waste and can be an important element increasing the construction cost. Cost decreasing concerns of Contractor Firms: It is obvious that cost increases resulting from both the renewal of technology as well as the occurance of unforeseen manufacturing

136 increases and the necessity of speedy construction process, of terminal buildings put out to tender with first draft and not fully finallized location list, force contractor firms. Contractor firms wish to choose more economical alternatives with commercial concerns on any materials, which have not been defined, whose trademarks have not been stipulated, in order to minimise or amortize these cost increases. These forced demands, which are sometimes not possible pursuant to the contract and specifications, cause difficulties between the administration and the contractor firm. Whereas sometimes, these urges which cannot be prevented due to gaps in the contract and specifications, cause problems as the weak sides of the buildings in the operational usage period. Necessity to conduct Many Manufactures Simultaneously: There are many manufactures of different character within the aerodrome terminal buildings. The necessity to conduct these manufactures simultaneously as a requirement of the nature of the BOT projects, turns up as an important factor urging planning and organization. Mechanical systems, electronic and security etc. work items, which have to be conducted parallel to the construction works, somes may from time to time cause delays in the works during the manufacturing stage. For instance, as soon as the rough construction works of the basement have been completed, the automatic luggage systems which are generally situated at this floor have to be assembled immediately. The setting in of this sensitive, large size manufacture-assembly, which is entirely different, at a time when the construction works are conducted, significantly urges the implementation of the manufacture-assembly. Excess of overseas supplied materials-equipment: An important time slice is required for the supply and imports from overseas of equipment and items for mechanical, electronical, electro-security systems contained in the Terminal Buildings. The cost of these manufactures representing an important item within the entire work constitutes a significant percentage, too. The necessity to supply them as soon as possible without affecting the work programme and planning, is one of the leading factors urging the contractor firms. Baggage handling, escalators moving walkways, electro-security systems, EDS, EEDS systems, passenger

bridges bellows are the main ones. Project Authorship Rights: All of the architectural projects of terminal buildings have been obtained as a result of national competition. Pursuant to the concession contract, the project s authorship rights has been taken under legal security and the value of the implementation projects is, again pursuant to the contract, given to the rightful owners of the projects by the contractor firm. This circumstance affects the relations between the contractor firm and the project s author. This circumstance can be a pressure component for the desire to form the projects by the requests of the contractor firm. The main reason of this pressure is that the Administration has put the project author into a direct economic relation with the contractor firm. Again, since the project authorship rights have been entirely secured, the fact that neither the contractor firm nor the administration may have any sanction on the project authors can change the course of the task. For example, the failure to delivery the projects on time may significantly affect the manufacturing. The fact that the project authorship rights have been assured, the obligation that the contractor firm and the administration have to work with the same author, prevents the project authors to be at ease and to entirely concentrate on this task. 137 The fact that in some projects there has been more than one project authors has caused similar problems, too. Problems arising between these persons or with the firm may change the course of the task. In projects with many authors, elements such as the aspect of agreement by the authors among themselves, the expression of different views, represent an important hindrance for the fast completion of the task. Psychological Pressure Created by Fast Construction Process: The desire to complete the construction period determined by the contract as soon as possible and to add the time achieved to the operational period, is a rather important pressure component in the conduct of the task. Since the necessity of the simultaneous working of hundreds of persons and tens

138 of sub-contractor firms, where many work disciplines produce manufacturing of hundreds of items simultaneously, combine with this pressure item, it leaves serious psychological affects both on the employees as well as the executives. Due to the sensitivity of the date of completion aimed at and the financial dimension of the task, it is compulsory to complete the task on the date determined. The replacement of executives, subcontractors or employees, who fail to accord or to be successful within the rapidly continuing construction process, with other alternatives may sometimes not be possible due to the construction period s shortness. Since the adaptation of new persons or firms to the task shall take time, the persons and subcontractor firms chosen have to be the most accurate alternatives. Again, the speedy programme of the task and the fact that mistakes are least tolerable, are an important item of pressure on the employees. This causes the task to be executed under gradually increasing strained conditions. This circumstance resulting from the time-cost pressure of the target of the highest quality manufacture in the time aimed at, turns up to be an important subject required to be examined in terms of construction management. Concession area concerns: The desire to make the concession areas (duty-free shops, café,

restaurants, etc.), which are included in the architectural projects forming an important financing resource in te projects operational period, in the implementation projects more than the areas determined in the first draft attached to the tender, may be considered normal in terms of commercial concerns. However, the Terminal Buildings, in terms of the structural nature, should ensure the passenger s comfort, ease and boarding a plane deplaning in the easiest manner. But the fact that the contractor firms wish to enlarge the concession areas or to establish them to the points closest related to the passengers, gives rise to the situation which shall affect the terminal functions and passenger circulation. Especially the affect of important, income-producing units such as duty-free shops to shape the project and the manner of operation, becomes quite significant. Along with making the passengers feel as much comfortable as possible before boarding a plane, ensuring their realization of commercial activities as much as possible, sometimes has been a factor urging projects. Concentrating the passengers to points where these volumes are situated, formed before entrance of passengers on the air side to the gates lounges - where they shall board a plane, is the reflection of commercial concerns on the planning. In order to ensure the moving around of passengers, the terminal passenger flow diagrams are arranged accordingly. With these developments, the aerodrome terminal buildings are on the way to become a different version of the shopping mall logic. The reflections of this on the implementations are sometimes of an extent which may affect the terminal operation. Forms of the commecrial volumes in a manner preventing the movement of the passengers as fast as possible may occur. 139 Many opinions may be expressed on the accuracy of the fact that commercial concerns affect architectural projects so much. However, rendering operational services in care of the private sector takes the commercial concerns, as a requirement of the nature of the private sector, to the foreground. These ideas have to be planned right at the project stage. Otherwise, interferences made in the operational period may introduce the situation of being able to prevent the aerodrome operation. Continuation of construction at operating airport: The Antalya airport is the second most dense airport of Turkey in terms of aircraft and passenger traffic. The realization of an extensive and large scale construction sach as the the 2 nd International Terminal of such an intensive airport has brought along with it restrictive factors. The continuation of the construction without causing any delay for the existing operation and intensity, taking security measures,

140 providing the dispatch of goods and personnel, etc. elements have been determining in the planning of the construction. Against this circumstance, which brings compelling restrictions according to the construction activity at any place, the construction phase has been realized without giving cause to any weakness by means of the simultaneous working of the airport and the contractor firm, and their producing specific solutions to the matter. The entrances and exits to and from the construction site have been provided at a point independent from the main entrance of the existing airport, and security and probable operational problems have been overcome by entire isolation of the construction area. Significance of the construction structure system chosen: The selection of the supportingstatic systems of the buildings realized by means of the BOT projects, has been one of the most important factors affecting the construction processes. In the specifications attached to the tenders of the projects of terminal buildings put out to tender with first draft projects by means of the BOT model, the structures are generally explained with general terms such as reinforced concrete, steel, etc. In this scope, the detailing and selection of structures is

determined at the stage of implementation projects in the phase of construction. In this aspect, it is important to make a structural design appropriate to the construction techniques at the project phase. As a requirement of the functions and other factors, the New International Terminal Buildings are designed as large-space buildings comprising a wide area. This wideness increases the weight of the construction and gives rise to great vertical loads to be imposed on the columns. The static evaluations and designs of the buildings are performed by the engineering groups with the recommendations of international consultants. In the terminal building, the columns and cross beams have been prepared in the projects as reinforced concrete elements with concrete poured on the spot. Their floorings have come to the construction site as precast elements in ready-made form. Thanks to this system, the floorings s weights have been decreased to a certain extent and the speed aimed at in manufacture has been reached. We may say that the positive effect of Prefabricated Precast beam system project solutions, used in mass reinforced concrete buildings between the frames, on the construction speed of the project can be less than buildings such as bridges, viaducts, etc. Thus, the floorings formed with the precast beam in the AYT2 model have been realized in more process that the reinforced plate furnishing manufacture speed course. Whereas its disadvantage is that it affects the construction speed resulting from the assembly in large low and spreading and less storey buildings and that the process lengthens. 141 The project preparation of the entire static building, the determinations of dimension and implementation works have been carried on parallel to the other project preparation and

detailing works, and any probable problems have been foreseen with careful studies. It has been ensured that the design criteria describe the construction and building techniques and allow standard production. (such as axis and quota arrangements being linear) The restriction brought by the building structure may be exemplified by the new international terminal of the Dalaman airport. The system defined as gross concrete supporting system in the specifications and architectural projects attached to the tender has caused the construction to progress slowly and has been an important restrictive element in the manufacturing stage. 142 Importance of the building techniques chosen: In the Antalya Airport 2 nd International Terminal construction, industrial patterns have been chosen (scaffoldings have been chosen as supporting scaffolding, whereas the cast material as film coated plywood, the cast supports have been steel brace), and the rapid manufacture of the structural building has been ensured by using Tower and mobile vinch facilities. It has been considered that rough buildings rapidly produced shall enable fast completion as planning, and the task could be completed in the planned period as a result of this decision. The modelling and production of the mold system has ensured the formation of the building with accurate geometry and has protected the investor from any unnecessary expenses to be incurred later. For this purpose, the dimensioning, repetition of mold group installations has ensured the speed and economy of the task. (The optimal realization of the mould investment at first stage has effected the speed of the task in linear form). Manufactures with mortar have been made with machinery support as much as possible and the human factor has been tried to be lessened.

143 Selection of material: Light weight and rapidly produced machine-made materials have been chosen as wall elements. In exterior, interior, roof and front coatings; the selection, application of manufactures produced in workshops in prefabricated manner has increased the quality and assembly speed. (As for the BOT model, etc. other rapid tasks, the assembly of a great part of the manufactures, if possible, in a premanufactured manner on site shall increase the quality and production.) In the general meaning, modular machine-made manufacturing shall expedite the task. It should always be considered that finance shall be required to be able to plan and use time, and will shall be necessary to be able to use finance. Whereas, will should provide the necessary motivation. (The ability to be a team, determination and the human factor are some of the most important elements of the ability to plan, of speed and quality.) The availability of technical efficiency and experienced staff alone may also not be sufficient for speed and quality in BOT model tasks. Experience has shown that the general principle Morale + Motivation + Condition should constantly be maintained and the belief of capability should be maintained.

ANTALYA AIRPORT INTERNATIONAL TERMINAL PROTECT 2 144 LEVEL 1

ANTALYA AIRPORT INTERNATIONAL TERMINAL PROTECT 2 145 LEVEL 2

ANTALYA AIRPORT INTERNATIONAL TERMINAL PROTECT 2 146 LEVEL 3

147

148 ANTALYA AIRPORT INTERNATIONAL TERMINAL PROTECT 2

149

5.POST-BUILDING OPERATIONAL PROCESS 5.1. Operating Earnings Allocated to the Project 150 The earnings left to the joint venture company in the operational period by means of the concession agreements are one of the basic properties of the build-operate-transfer model. Concession agreements have been divided into five groups by the ICAA (International Civil Airports Association). These are shops within the terminal, services within the terminal, hotels, restaurants, other beverage and food services, shooting commercials-films, etc. activities. [35] In the aerodrome terminal buildings construction in our country, the incomes allocated to the Joint Venture Company, who shall realize the project, by the Administration are as follows; International flights passenger service fee earnings; The international flights passenger service fee implemented since Jan.1, 2005 has been taken to be 15 US Dollars. The Administration exclusively guarantees this income to the Company in Charge and does not guarantee any other incomes. Accordingly, the Adminstration guarantees an annual passenger numbar of 2.211.138. This figure is calculated by an increase of 3% in comparison to the former operational year. If this figure is not reached, except for the default of the Company in Charge, the lacking part is paid by the Adminstration to the Company in Charge in US Dollars. International flights passenger bridge earnings (bridge, electricity 400 Hz, water) All kind of rents, share of proceeds, space allocation and advertising earnings Counter earnings CIP earnings Car parking earnings Flight information, phone, telex, announcement, diaphone earnings

Film shooting earnings Checkroom earnings Baggage transporting earnings Examination and treatment earnings Heating-ventilation, electricity and water earnings obtained from locations allocated to other establishments. The determination of the tariffs of earnings to be obtained in consideration of services presented in practice has been left to a dual application. Accordingly, of the incomes stated in the Contract to be allocated to the Company in Charge, the tariff related to the bridge earnings (bridge, 400Hz, water), space allocation, rend and advertisements, residences, VIP lounge and conference hall earnings as well as ticket sale, office allocation, checkrooms, car parking, baggage transportation, phone, diaphone, announcement, flight information and monitor usage, examination and treatment, film shooting, electricity and water earnings; is determined by the Company in Charge in a manner not exceeding (+), (-) 25% of the Fee tariff applied by the Administration at international airports and is put into force upon the written approval of the administration. 151 Whereas the tariff related to the international flights passenger service fee is determined by the Administration. The service fee tariff until the departing passenger number guaranteed every year throughout the operational term has been reached (2.211.138 for international flights) is applied as 15 US Dollars per person. Whereas the earnings obtained in consideration of services remaining outside the services stated, are incomes excluded from the tariff. The company in charge is entitled to freely determine the tariff of the incomes excluded from the tariff. Prices of the services included in the tariff are prepared and enforced by the State Airports Administration for every year. 5.2. Termination of Contract If the Company in Charge fails to comly with the provisions of the contract and its annexes due to the latter s negligence in the operational period, and fails to amend them despite any period granted to the latter for the correction of these faults, the contract may be terminated by the Administration. In this case, the performance bond is recorded as revenue by the Administration.

5.3. Transfer at the End of the Contractual Period The Antalya 2 nd International Terminal shall be transfered by the contractor and operator Çelebi-IC to the Directorate General of the State Airports Administration on Sept.25, 2009. The matters to be taken into consideration while realizing the transfer have been stated in the contract. Accordingly, a) Any installation, equipment, devices and systems stated in the contract as well as any supplementary equipment, tools, devices and fittings stated in the invoices of these equipment, installations, devices and systems, as well as all kind of fixtures, materials and furnishings registered in the inventory stock shall be transfered to the administration at the end of the operational period free of charge, in well-maintained, operating and utilizable condition, free of all kind of obligations and undertakings. 152 b) If requested by the administration within one year prior to the date of transfer, after those of the equipments, installations, devices and systems, existing in the facility, which have completed their economical life, have been determined mutually with the company in charge according to their technical properties, they shall be replaced by the company in charge by means of the provision of their expenses from the accumulated amortizations following the approval of the administration. c) Six months prior to the transfer of the facility, the company in charge shall deliver an at least quarterly spare parts list which may be required related to the operation of the facility. d) The Company in Charge shall present separate training of sufficient durations to the personnel to be determined by the Administration for each of the systems and these trainings shall be have been completed within the last one year of the contractual period.

6.CONCLUSION AND SUGGESTIONS The important data resulting from all stages of development before and after the tender of tasks, which are realized and the construction of which is continuing by means of the Build- Operate-Transfer Model, may be explained as follows. It is of importance to obtain these facilities, which accommodate all technical-technological developments with the architectural styles required by the modern age, without spending the public s cash financing resources. It is a known fact that systems, decided to be used in time in the construction stages which take very long years if realized in care of the public, become outdated. Along with this model, the rapid construction process ensures that these technologies are set in as soon as possible. 153 The national project competitions opened upon having adopted a decision in this model, has brought a serious mobility in the world of architecture and has brought along with it the formation of a significant knowledge, which is not much available in this matter in the country. Taking into consideration all competitions, the research and analysis processes in the preparation stage of hundreds of projects obtained, has caused many persons/offices/firms in the architecture and other engineering branches to become competent in these matters. Since the projects are obtained by competition and since there aren t brought any restrictions in the specifications, both the systems, materials used as well as the architectuarl identities of the projects presented have contributed to the establishment of the terminal buildings which may be considered successful worldwide. Apart from an exceptional example, the fact that tenders have been realized with first drafts obtained as a result of competition have revealed important problems. Revision requests occuring due to certain reasons such as the passing from the first draft to the implementation projects, static, ground analysis, requests of the administration resulting from the structure of the selected systems, the desires of the contractor firms for the capability of fast completion, has caused uncompromises due to the constraints of the contract between the administration firm project authors. The realization of the tenders after all problems have been solved, like in the Antalya Airport 1 st International Terminal, shall prevent the rise of these problems. Along with

this, concerns of finance forming the basis of this model such as both the administration s as well as the firm s operational period, shall have been removed. Moreover, since the revisions to be made on the projects, which constitute the annex of the tender contract, shall be the component effecting the tender process, certain risks of legal objection by third parties shall disappear. The conduct of the implementation projects parallel to the construction, the fast production of the projects gives rise to the necessity for the administration s rapid approval as well. This necessity of fast working brings along with it the risk of making mistakes, and requires spending an important resource for the removal of the financial dimension to be considered important later. Another problem is that, since the condition of qualification is sought in the tenders, many applications have been made to these tenders by domestic firms and mainly contracting firms, and the domestic firms being awarded the contract has looked for foreign partners and mostly this has remained as symbolic partnerships on paper, the operational experience transfer aimed at has not been realized. 154 Therefore, there should also be made certain amendments in the legal arrangements of the Build-Operate model. The suggestion to realize the tender with the implementation projects stated above may be given as an example for this. Besides, the necessity that a firm experienced in operation takes its place in the consortium during the task s tender process should also be a precondition throughout the task s operational period. If this is not realized, the information experience transfer, which is an important factor in the implementation of BOT, cannot be ensured. Rendering the service as cheap as possible in terms of operation sometimes can be an important criterion in the selection of the projects. Contractor firms spending vehement investments for the construction, don t wish to make any expenses in excess and permanently due to any reasons resulting rfmo the project, for important items such as heating-cooling throughout the operation. The criteria of forming the project become important in this regard. For example, in terminal buildings with very high volumes, the heating-cooling of these spaces require a vehement preliminary investment and operational expenditure. The achievement to the country by this model in a rapid manner of the terminal buildings, which feature all technological, technical systems used internationally, which have been and are implemented with their architectural character and identities; the renewal and commissioning of the most important entry-exit gates of our country, the political, economical, geopolitical significance of which is increasing from day to day along with the developments worldwide, is a great success. The main target of this study is to analyse the experiences obtained during the project preparation and construction stages of these products obtained to international standards and to ensure its guidance for any future applications. The build-operate-transfer model construction of the aerodrome terminal buildings built for the provision and modernizatoin of the capacity requirement of the airways transportation, which is the most important branch of

the transport sector, has gained importance during the recent years. By means of this model, 6 aerodrome terminal buildings have been introduced to the sector during the last 8 years by out-of-budget financing in consideration of about 1,5 billion Dollars. Taking into consideration both that it is built rapidly as well as that a new concept is introduced to the sector in terms of business administration, it has become acceptable to all authorities that this model is an important construction financing. The tender method applied by the State Airports Administration in the BOT projects is important in terms of the tender s conclusion within the shortest time and its performance in a transparent manner along with a competitive concept. Thus; the task of the projects to be applied by the BOT model is described in detail both in the administrative specification and its contract as well as its attached special, technical specifications. In addition, the conditions are created where the interested parties, who intend to participate in the tender, may ask the Administration about the matters related to the scope of the task, about which they hesitate or which they feel useful to be explained, in the period from the tender s announcement date to the date of tender. Answers or comments related to the subjects asked are advised to the interested party asking together with the other interested parties who receive/shall receive the specifications prior to the date of tender. On the date of tender to be made after this process, the tender is concluded on the same date in the presence of the press and the notary public under the attendance of the tender commission and the financial, legal, technical sub-commissions, who may assist the commission. Thus, the prolongation of the decision-making processes of the tenders and certain wrong comments and evaluations are prevented. In other institutions where the BOT model is aplied, the conclusion of the tenders various between 3-6 months. In this context, the model implemented by the State Airports Administration is successful and should also be taken as an example by the other institutions. 155 Besides, the following matters related to the construction and operation of terminal buildings as public building sample with the BOT model have to be evaluated and improved. The tender of these facilities should be realized with the implementation projects. Difficulties resulting from the realization of the tender with the first draft, conflicts occuring, shall be prevented and this shall ensure that the feasibility studies are rational. The scope and definition of the task shall be made clearly in the contract and specifications attached to the tender. In subjects such as materials, equipment, fittings, etc., the technical properties, trademark options have to be mentioned. The part of the Contract s article related to granting an additional period, regarding its restriction to force majeure, the cost increase which may occur due to the additional requests of the administration, should be cancelled. Buildings in the scope of support services which

may be made by tender, the funding of which may be provided for by the budget, should be included in the scope of the task, and should not be included in the scope of the Build- Operate-Transfer model, because they are contrary to the Build-Operate-Transfer spirit. The construction periods should be determined based on the nature of the task and its region of construction. Granting the same or close construction periods to places with different properties is not a realistic approach. For instance, ground improvement has beem made for about 6 months during the construction of the Dalaman airport new international terminal building. Taking into consideration that all construction stages of the Antalya Airport 2 nd International Terminal building are 11 months, this deviance shall be clearly comprehended. In order to enable the compliance with the work programme, which has been prepared by the Contractor Firm and approved by the administration, penal sanctions have to be included in the contract. The quite rapid execution of the construction processes results in the noncompliance with the work programmes. Whereas this can create weakness of control. 156 In the control of the task, a disciplined and realistic controlling mechanism should be developed by which all stages and manufactures can be controlled. Care should be taken to make available technical personnel of all related disciplines in the controlling organization. A consultant firms should be engaged for the rational conduct of the control mechanism by the administration, and the controlling mechanism should be conducted together with the consultant firm. This becomes important in order to ensure the task s realistic control, the consultant firm performing any services which cannot be fulfilled by the administration. Care should be taken that the total tender amount included in the contract is a realistic figure. This is significant in terms of the credits to be provided and the subsequent supplementary contractual circumstances. Those of the equipment, fittings and materials to be used, which shall be imported, shall be supplied in a manner not delaying the work programme and their supply in this way should be included as a condition in the specifications. The task s construction periods should be determined according to the project s property and the total area sq.m. The technology to be used and the construction systems selected should be determinent components in the determination of the construction periods. Fine sanctions related to the insufficient/faulty manufactures and manufactures not providing the necessary properties regarding quality, shall be included in the contract. The contractor-subcontractor-firms, who shall be entrusted work by the Contractor firm, should be started with the work following the approval of the administration.

By means of the increase of the incomes allocated to the projects, the construction of which has been realized by the Build-Operate-Transfer model, the tender with long-term operation as in the Esenboğa Airport domestic-international terminal, should be prevented. Longterm operations bring financial burden to the administration due to the administration s technological renewal necessity at the transfer stage due to factors such as the wear in time of the technology used, and this is the weak aspect in terms of the build-operate-transfer criteria. However, in this terminal building, which has been put in commission in 1998, the renewal of both the baggage handling as well as the other mechanical-electronical systems shall be necessary. Examples for items which may be added to income fees are accommodation fees at the apron made in the scope of the task and the reservation of shares from the ground handling services rendered. It airports, there should not only be realized international flights passenger terminals with the BOT implementation. Items such as cargo terminals, domestic terminals may be realized by this model as well. For instance, the realization of the new cargo premises, which have to be made at the İstanbul Atatürk Airport, by means of the BOT model shall ensure the construction of these facilities in a very short time and the commissioning of systems featuring the latest technology. In this framework, the combination of many services (passenger terminal cargo premises, etc.) shall ensure that the contractor firms present bids with more attractive periods in the tender. 157 While the projects of the terminal buildings are prepared, building systems, the construction of which shall be realized rapidly, should be selected with the foresight that the manufactures shall be made very fast, and the tender should be entered with these projects. Steel construction systems may be given as examples for this. An entirely gross reinforced concrete system as in the Dalaman airport international terminal has caused the prolongation of the construction period. The effort of the contractor firms to decrease the construction periods to the shortest duration can affect the quality of the task. The administration should assign least and utmost limits to the contract. The least duration determined denoting the optimum period depending on the task s property, the period remaining between the utmost limit and the least limit should be added to the duration of the operational period. Competitive conditions consistent with the tender spirit should be created by making a well introduction of the BOT models in the international area. The time slice of the necessary length shall be arranged for the announcement of the tender, and thus the increase of participation through providing the chance to the international enterprises to examine the task s scope and nature shall increase the success of the tender. When viewed within the construction management systematic, it is seen that the most

critical components are time, supply and human resources. The rational evaluation of time, the provision on time of all items to be supplied becomes important. Therefore, all measures related to the materials to be used in the specifications should be taken. Considering the sample of the Antalya 2 nd International Terminal, we see that this matter has been fulfilled successfully. The successful conclusion of the terminal buildings construction process organization, which is an extensive study, requires the planning to be made right. Some planning mistakes made at the beginning of the task in the Antalya 2 nd International Terminal has caused loss of time. The fact that the contractor firm has not foreseen the necessary time for the approval of the implementation projects by the administration, the necessary tests, in the planning has caused the suspension of the work and thus loss of time even for a short time. It is important that for this kind of situations the planning is prepared according to the matters mentioned in the contract and in the specifications. 158 The provision The Build-Operate-Transfer Model: A special financing model developed to be used in the realization of the projects which require advanced technology and high material resources... stipulated in the BOT law number 3996 should be amended. Differences have occured between the conditions when the law was initially passed and today s conditions. In this context, in shall be right to use the private sector dynamism and capital in public services in projects not requiring advanced technology and high material requirements. Especially administrations with financing difficulties such as Municipalities shall be able introduce many projects by means of this model to the country through this amendment. The application in the transfer stage after the construction-operation of the projects which are developed by the BOT model has not been arranged. Despite the fact that the transfer of the terminal buildings in the aviation sector to the private sector for maximum 49 years through leasing as a result of the BOT period has been arranged by the law number 5335, this uncertainty is continuing in the other sectors (energy, etc.). Evaluating the Antalya 2 nd International Terminal in the scope of the construction management; the contractor firm has succeeded in being able complete the task, the project properties and quality of which has been determined by the project authors based on the Administration s requirements and requests, in the ultimate quality, cost-efficiently and in the shortest time by means of efficient management and organization. Taking into consideration integrating management and, in this scope, the construction process with the target, time, cost, quality, supply, risk and the other management components by the conception of contract management, it is obvious that they feature a structure complementing each other and that its implementation brings the success aimed at. Integrating management has ensured an efficient coordination in all management components.

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APPENDICES 163

164 A.MENDERES AIRPORT INTERNATIONAL ESENBOĞA AIRPORT DOMESTIC- INTERNATIONAL DALAMAN AIRPORT INTERNATIONAL ANTALYA II AIRPORT INTERNATIONAL ANTALYA I INTERNATIONAL ATATÜRK AIRPORT FIRM 20.000.000 5.000.000 5.000.000 5.000.000 10.000.000 5.000.000 TERMINAL BUILDING CAPACITY (PASSENGER/YEAR) TERMINAL BUILDING SITTING AREA (sq.m.) 57.621 27.500 27.920 24.625 45.505 34.394 TERMINAL BUILDING TOTAL CONSTRUCTION AREA 264.000 54.000 77.056 70.000 168.322 110.000 CAR PARKING AREA (sq.m.) 179.000 94.265 54.000 123.515 64.000 VIADUCT TOTAL AREA (sq.m.) 3.500 - - 7.500 31.460 29.580 ROADS (sq.m.) 45.000-28.000 42.700 28.000 CAR PARKING CAPACITY (VEHICLES) NUMBER 7.076 750 1.000 4.000 2.200 APRON (sq.m.) 73.000-140.000 182.000 120.425 NUMBER OF PASSENGER BRIDGES 23 12 12 7 18 9 TOTAL CHECK-IN COUNTERS 224 57 60 60 105 60 TOTAL PASSPORT CONTROL NUMBER 74 46 60 42 34 32 11 6 6 6 9 7 BAGGAGE RECEIPT CONVEYOR 14 7 4 14 16 14 CUSTOMS EXAMINATION DESK 1355 MILLION EURO 188.702.557 EURO INVESTMENT COST 305.995.000 $ 65 MILLION $ 71.155.000 US$ 72.481.227 $ INVESTMENT PERIOD 30 MONTHS 24 MONTHS 20 MONTHS 24 MONTHS 36 MONTHS 24 MONTHS 75 MONTHS 15 YEARS 8 MONTHS 77 MONTHS 20 DAYS 34 MONTHS 27 DAYS 9 YEARS 3 YEARS 8 MONTHS 20 DAYS OPERATIONAL PERIOD DATE OF OPERATIONAL PERIOD START 10.01.2000 01.04.1998 02.12.2005 June 2006 *October 2006 *September 2006 ENDING DATE OF OPERATIONAL PERIOD 02.07.2005 01.08.2007 31.10.2008 2015 2021 2015

APPENDIX-2 Building manufactures As Construction Management, the order as outlined below has been followed: 165 Mobilization Stripping-off and foundation excavation Realization of ground surveys at foundation level and determination of ground safety tension Taking measures of drainage against water and steam under the basement foundation (blockage layer and drainage chanels), discharge of underfoundation drainage water by opening underground wells The formation of a water isolation layer with membrane on the protective concrete layer at a plane under the basement foundation and its protection again with a concrete layer on it. Construction of elevator and stairs pail Assigning the tower vinch strategy and the assembly of the tower vinches (5 items) The reinforced concrete manufacture of singular and continuous foundations starting from the basement foundations Assembly of earthing conductors inside reinforced concrete Starting the manufacture and transmission of precast flooring plates

166 Filling the sand layer between the basement ground flooring and the isolation layer Manufacture of basement supporting screen walls and protection by adhering extrude polystrene by vertical bundling isolation with membrane to its outside Scaffolding block deep excavation, manufacture of the reinforced galleries underneath the foundation, reinforced concrete manufacture of the singular foundations Completion of te reinforced concrete column and beam manufactures on a block basis until the basemen level (A1, A2, A3, A4, A5) Assembly of the A block basement precast laying plates and pouring topping concrete Completion until of foundation and columns at front block (A-E axis) up to the basement flooring level Starting installation gallery manufacture Starting filling in the direction of the car parking beginning with the environment of the basement supporting screens Pouring ground flooring by filling in block B Gradually completion of the arrivals and departures floor columns and beams, precast floorings at the I-J axis and the A-E axis ceiling at block A Manufacture of the arrivals and departures floor columns and beams at the block B as well as the assembly of the precast flooring plates Starting alum works inside the building Heating center reinforced concrete manufactures Energy Distribution Center Reinforced Concrete manufactures Starting mortared wall and plaster manufacture inside the building Starting assembly of the anchorages and space cage steel roof Assembly of Baggage Handling system steel platform in the basement floor Manufactures and assembly of steel stairs, composite flooring and the supporting steel in the elevator cases Manufacture and assembly of the roof lights steel supporting construction Gradient concrete for the water isolation on the reinforced concrete steel roof and assembly of the isolation assembly profiles on the gradient concrete

Assembly of baggage handling system conveyors Polyethylene steam barrier, stone wool and slate isolation membrane on reinforced concrete roof, as well as water and heat isolation Assembly of door cases Manufacture of rain water and waste water infrastructure at the car park Manufacture of reinforced concrete supporting walls at the car park Reinforced concrete manufacture of the rotunda stairs housings serving the passenger bridges at the apron Coating the space cage steel roof with trapezial sheet, polyethylene steem barrier, impregnated stone wool and slate isolation membrane, and the realization of water/heat isolation Conic dome steel manufacture and assembly Aircraft fuel hydrant system pump building construction Assembly of siphonic roof rain water filters Starting assembly of the aluminium composite front coating panels Starting assembly of the roof lights Assembly of carpentry (window/door) profiles at the fronts Starting joint installation piping works Manufacture and assembly of ventilation chanels Assembly of earthing and lightning protection landing conductors, assembly of earthing electrodes around the building Infrastructure around the building and at the car park (illumination, electricity, fire hydrant) Assembly of cable conduits under the plaster and alum (pipe/channel), assembly of junction boxes Granite ceramic ground coating works Manufacture of concrete plane, walking way and border at the car prak 167

168 Asphalt plane manufacture at the car park Passenger bridges steel support manufacture and assembly, steel support subconstruction under the coating Betopan coating at passenger bridges Front coating at passenger bridges Assembly of aircraft approach bellows Assembly of service counters (check-in, passport, information, customs, visa, etc.) Manufacture of plasterboard partitions and coating walls Natural stone wall and polycore forehead coatings Compact laminate wall coatings Interior front aluminium composite and stainless steel sheet wall and column coatings Assembly of door wings Assembly of cable pans and shelves, drawing of cables Assembly of wet volume sanitary installations Manufactures of faience and ceramic Assembly of toilet partitions Assembly of raised floorings

Assembly of air-conditioning power stations Assembly of elevators and escalators Assembly of fancoils Manufactures of power lines Manufactures of stainless steel and glass partition walls, manufactures of balustrades, barriers Assembly of power panel Electrical and mechanical assemblies under the suspended ceiling Equipment mounting in electrical and mechanical locations Dyeing works Provision of permanent energy Aircraft fuel hydrant system pump building equipment assemblies Concrete plane completing works around the building and at the apron Laying out vegetable earth, assemblies of irrigation water system, germination and cultivation of plants Assembly of illuminating poles and exterior lighting fixtures Traffic signs, ground signs and road dyes Assembly of minute current, communication and data cables Assembly of aircraft approach system laser devices 169

170 Network infrastructure and IT systems hardware and software assembly Assembly of orientation signs, FIDS monitors and advertising panels Suspended ceiling manufactures (aluminium perforated, metal panel and plaster board) Assembly of lighting fixtures and equipments on the suspended ceiling Assembly of x-ray devices and gate detectors Solid waste decomposition and destruction system equipment assemblies Assembly, test and commissioning of ventilation automation system Test and commissioning

APPENDIX-3 Features of the Antalya Airport 2 nd International Terminal Project Name of Project Aim of the Project Type of the Project Technical Contents of the Project Building, Operation and Transfer of the Antalya Airport II. International Terminal and Supplements Due to the insufficiency of the capacity of the Antalya Airport s existing 1 st International Terminal being confronted with the increasing passenger traffic and in accordance with the master plan of the Antalya Airport, the building, operation and transfer of the Antalya Airport II. International Terminal Building and Supplements put out to tender in the framework of the Cabinet Decision² no. 94/5907 and the Law¹ number 3996. Building,operation and transfer of the airport terminal by means of the BOT model: Upon the intention of a public authority (administration STATE AIRPORTS ADMINISTRATION), which needs new assets (facilities) to fulfill the public services with which it is commissioned by law, but which is not in a position (or doesn t deem appropriate) to provide for the risks as well as financing of the investment necessary for this by its own budget, to make a corporate body (a Capital Stock Company or Foreign Company) fulfill the part of its relevant duties related to Investment and Operation by contract to the part limited by the contract, the acceptance by the relevant corporate body to produce, operate the work (facilities) in consideration of the remuneration (including profit) payable by the acquisition by the administration or service beneficiaries of the goods or service produced by the corporate body in the framework of the operational period and authorizations granted to it by contract, to transfer it to the administration at the end of the contractual period free of charge, free of any obligations and committments, in a well-maintained, operating and usable condition, and the undertaking of the related investment financing. The Antalya Airport II. International Terminal and Supplements have been designed to be able to serve daily 300 flights and 50000 passengers. 12 aircraft may simultaneously approach the terminal apron passenger bellows. There are 34 far aircraft parking positions. There are a total of 26 gates consisting of 8 arrival, 8 departure, 8 fair aircraft departure, 2 fair aircraft arrival gates. There are 64 check-in counters, 1 mobile check-in counter, 6 luggage delivery isles and a fully automatical PLC/SCADA controlled luggage system equipped with advanced electro-security technology and having a capacity of 5000 luggage/hour. The total indoor building site is 102673 sq.m. Besides, the landscaping along with the building of the parking area of 130654 sq.m. to serve 302 busses and 451 automobiles is also comprised by the project. The total outdoor building area comprising also the car park and landscaping areas is 448039 sq.m. All furniture, equipment and inventory stock of the terminal building as well as the software and hardware of aviation and ground handling services have been supplied in the scope of the Contract. 171

172 Components of the Project A In the Scope of the Main Contract dated Feb.24, 2004: 6. Antalya II. International Terminal Building: 78073 sq.m. 7. Heating Centre 3164 sq.m. (3.750.000 kcal/h heating and 7.800.000 kcal/h cooling capacity) 8. Energy Distribution Building - 844 sq.m. (with 30 mva capacity) 9. Aircraft (Jet) Fuel Hydrant System (31 Aircraft Positions and 600 ton/h capacity) 10. Restaurant and supermarket building: 1860m² 11. Drivers rest building: 1860 m² 12. Installation gallery: (2,20x2,80x1057,31m) and Electricity Gallery: (1,50x2,0x104,25 m) 13. Power line (from underground gallery): 6213m 31,5kV Double Circuit, 30mVA capacity 14. Solid Waste Decomposition and Destruction Facility: 380 sq.m., 2500 kg/h capacity Solid Wast Decomposition System and 500 kg/h capacity wast destruction kiln 15. Water supply wells (3 pcs): 3x17 = 42m³/hour capacity 16. Asphalt area: 65000 sq.m. 17. Concrete walking ways and pavements: 43759 sq.m. B In the Scope of the Supplementary Contract dated Nov.10, 2004 1. In addition to the terminal building, the construction of 15 Check-in counters and the addition of the 4 th baggage line 2. New flight tower and technical block (6705 sq.m.) and environmental arrangement 3. New fire brigade building; 1585 sq.m. and environmental arrangement 4. Independent CIP building (1465 sq.m.) furnishing and environmental arrangement 5. Airport Police Department Directorate s Building (1313 sq.m.) and Environmental Arrangement 6. Apron Entrance (Gate A) Building Renewal (108 sq.m) and environmental arrangement 7. Illumination of the II. International Terminal Building bellow park area as well as the 180m intermediate connection taxi road between the aircraft parking position and the connection road, and the ground handling vehicles service roads as well as the new aircraft parking position and the connection road apron 8. Extension of the existing Airport connection road to the II. International Terminal building by about 1000 m; 18500 sq.m. 9. Construction of speed taxiway to the runway, 10. Local road 56550 sq.m. and surrounding wire fence construction (12979m), 11. Improvement, arrangement and landscaping of an area of 150,000sq.m. 12. Construction of electricity and installation connection galleries at the apron (1519m) 13. Irrigation water depot (1000 cub.m.) 14. Extension of the Aircraft (Jet) Fuel Hydrant System according to 46 aircraft parking positions and 924 tons/hour.

Magnitude of the Project A. Monetary Dimension Cost of Construction (US$): Description Tender Amount - Cost of Construction US$ US$ Main Contract 71,155,000 109,700,506 Supplementary Contract 14,231,000 19,147,600 Total: 85,386,000 128,848,106 B. Construction Site (sq.m.): Description Indoor Cons. Outdoor Cons. Total Cons. Area Area Area Main Contract 88.457 150.164 238.621 Supplementary Contract 14.216 297.875 312.091 Total 102.673 448.039 550.712 Technical Size Data: Indoor area of terminal building : 78.073 sq.m. Annual passenger capacity : 15.735.034 passengers Total aircraft parking positions : 46 Park positions with terminal/bridge : 12 Open parking positions : 34 Number of check-in counters : 64 Flight capacity : 20 flights/hour Number of X-ray devices : 32 Passenger exit doors : 16 Number of passport counters : 60 Conveyor beld : 400m Baggage System capacity : 5.000 pcs./hour Car park area : 65000 sq.m. Number of hand luggage carriages : 1.000 pcs. Aircraft Jet Fuel Hydrant : 97 pcs. (for 46 aircraft parking positions) Aircraft Fuel Hydrant System Capacity: 924 tons/hour for 46 aircraft parking positions Labour Force in Construction: 370,000- Man x Day 173

174 Period of Implementation Place or area of implementation Description Beginning Ending Duration Tender 04.11.2003 Main Contract 24.02.2004 Supplementary Contract 10.11.2004 Main Contract Construction period 20 months Main Contract operational period 34 mon. 27d Site Delivery Date 30.03.2004 Construction period planned according to Main Contract 31.03.2004 30.11.2005 20 months Construction period realized day 01.04.2004 05.04.2005 369 days Constructional period added by supplementary contract 120 days Constructional period added by supplementary contract 209 days Date of Temporary Acceptance (end of construction period) 05.04.2005 Date of commissioning: 07.04.2005 Operational Period 08.04.2005 25.09.2009 1631 days Date of Final Acceptance 24.08.2006 28.04.2005 The area within the Antalya Airport Borders as marked on the Attached General Site Plan on figure 4.2. Project outputs The AYT Terminal 2, where all kind of technical equipment required to be available on a modern and secure aerodrome is used, featuring an annual passenger capacity of 15.735.034 million, has served about 4 million passengers in the 1 year period from April 7, 2005, when it has been commissioned, until May 7, 2006. The handicap having come up due to the capacity insufficiency of the International Terminal-1 perceived in 2004 parallel to the increase in the number of passengers (tourists) has thus been removed starting with the tourism season of the year 2005. An additional means of employment of about 800 persons has been provided throughout the airport. Turkey has got its second largest international terminal. Up-to-date products materials and devices used in the infrastructure of the AYTerminal2 has position its security system even over the international standards. The 6 step security system used in the terminal features the property of being the first one among the airports of Turkey and Europe. At the AYTerminal2, which has a unique architecture designed to conform with national and international systems, there are also subsidiary service elements to fulfill all kind of requirements of the passengers. Some of them are cafeterias, restaurants, duty-free shops, health unit, foreign exchange office, rent-a-car firms..

Project Inputs Except for the constructional and architectural works in the building and on the external area, the following technological systems have been realized as project construction input: Automatic Explosives Detecting System (EDS) External Air-conditioning System (PC Air) Jet Fuel Hydrant System Common Use Terminal System (CUTE) Central Database (CDB) Automatic Aircraft Parking Guidance System (DGS/VDGS) Closed Circuit TV System (CCTV) Card Access System (ACS) Flight Information System (FIDS) Baggage Matching System (BRS) Baggage Handling System (BHS) General Announcement and Emergency Paging System Central Time System Fire Alert and Security System Intercom System SMATV System PABX System Gate Operation System (GOS) Energy (SCADA) and Illumination Automation System Building Ventilation (HVAC) Automation System 400Hz (for Aircraft) energy supply system Car Park automatic tariff system Uninterruptable Power Supply (UPS) System Power Line and Mid Voltage Main Distribution System Standby Power Supply (Generator) and Synchronization System VHF Wireless System Passport Computer System Computer Network and Internet Access/Security System Solid Waste Decomposition and Destruction System (2500 kg/h waste decomposition and 500 kg/h waste destruction) Water supply, storage, clarifying and distribution system Landscaping irrigation system Mechanical Building Installation (HVAC (Heating, Cooling and Ventilation), Common Installation, Fire Fighting Installation, Central Heating Installation, Fuel Installation, LPG Installation) 175 Target group and/or region The main grup essential to the project is the group of tourists and visitors from overseas in Antalya and surroundings (the tourism locations at the coast reaching from Anamur in the East till Fethiye/Gocek and even Marmaris in the West)

176 Establishment owning the project and its legal status DHMI (Directorate General of the State Airports Administration): The duty of the operation of Turkey s Aerodromes as well as the regulation and control of the air traffic in Turkey s Airspace is performed by the Directorate General of the State Airports Administration (DHMI). The establishment which has been executing its services with various names and status since 1933, with its facilities and fixtures constituting the infrastructure of the Turkish Civil Aviation sector, is continuing its activities since 1984 as Public Economic Enterprise in the framework of the Decreelaw number 233 and its Main Statute. The Directorate General of the State Airports Administration (DHMI) is a Public Economic Enterprise which has a corporate body status, which is autonomous in its activities, whose liability is limited with its capital, associated to the Ministry of Transport and whose services are considered concession by the latest legal arrangement. Whereas the Establishment s aim and activity subjects determined by its Statute are follows: As a requirement of the civil aviation activities, the air transport, the operation of aerodromes, the realization of airport ground handling services, the performance of air traffic control services, the establishment and operation of navigation systems and facilities, the establishment, operation and introduction to modern aviation of the other premises and systems related to these activities. In this context, the Directorate General of the State Airports Administration who is obligued to perform its duties assumed, according to the International civil aviation rules and standards; is a member of the ICAO International Civil Aviation Organization which has been founded according to the Civil Aviation Agreement put into force for the purpose of ensuring the safety of life and property in international air transport and to ensure regular economic work and development. Besides, it is also a member of the relevant international associations such as the European Organization for the Safety of Air Navigation (EUROCONTROL), the ACI- Airports Council International. The Directorate General of the State Airports Administration renders air traffic services to more than 361 foreign commercial airways companies and the necessary terminal and passenger services to about 35 millions domestic flights and international flights passengers, who prefer the air way for their travels, along with domestic airways companies, whose number is gradually increasing day by day. In the framework of the air navigation and aerodrome operational services by the Directorate General of the State Airports Administration, there have been significant increases in the recent years, in the aircraft and passenger traffic served. Important developments are especially realized in the international flights aircraft and passenger traffic of our international airports, and the Antalya Airport is one of the leading airports of Europe, due to the international traffic increase encountered.

Executive Establishment: (Company in charge) ÇELEBİ-IC Antalya Havalimanı Terminal Yatırım ve İşletme A.Ş. After the project has been awarded to the international consortium consisting of the Turkish company Çelebi Hava Servisi A.Ş. and the Kazakh company Atma Atyrau Havalimanı ve Taşıma A.Ş., it holds the status of singlepurpose (with the only purpose of executing this project) foreign capital company, which has been established according to the law of the Republic of Turkey in 2004 with the permission of the Undersecretariat of Treasury and Foreign Trade Directorate General of Foreign Capital to conduct the project under the position Company in Charge pursuant to the contractual terms and conditions. 177

APPENDIX-4 Systems of overseas supply SYSTEMS OF OVERSEAS SUPPLY 178 ELECTRICAL SYSTEMS PROCUREMENT PACKAGES MCC Panels 400 Hz Power System Uninterruptible Power Supply System Standby Power System Synchronization System Building Automation System Energy Automation System ELECTRICAL SYSTEMS PROCUREMENT PACKAGES General Announcement and Emergency Paging System Car Park Tariff System Automatic Aircraft Parking Guidance System Fire Lives Safety System Central Time System Intercom System FIDS/CDB CUTE BRS Data Cabling and Network ELECTRO-SECURITY SYSTEMS PROCUREMENT PACKAGES X-Ray Based Security Control Systems EDS, EDDS, EdtS, etc. Gate Type Metal Detectors Manual Type Metal Detectors Bomb Smelling Detector Closed Circuit TV System Card Access System MECHANICAL SYSTEMS PROCUREMENT PACKAGES Baggage Handling Passenger Bridges Escalators and Elevators Aircraft Fuel Hydrant System Chiller Air-conditioning Plant and Aspirators Wet Volume Accessoiries

APPENDIX-5: Progress Illustrations of the Antalya Airport 2 nd International Terminal 179 Construction progress as per April

APPENDIX-5: Progress Illustrations of the Antalya Airport 2 nd International Terminal 180 Construction progress as per June Construction progress as per June

APPENDIX-5: Progress Illustrations of the Antalya Airport 2 nd International Terminal 181 Construction progress as per July Construction progress as per July

APPENDIX-5: Progress Illustrations of the Antalya Airport 2 nd International Terminal 182 Construction progress as per July Construction progress as per August

APPENDIX-5: Progress Illustrations of the Antalya Airport 2 nd International Terminal 183 Construction progress as per September

APPENDIX-5: Progress Illustrations of the Antalya Airport 2 nd International Terminal 184 Construction progress as per October-November

APPENDIX-5: Progress Illustrations of the Antalya Airport 2 nd International Terminal 185 Construction progress as per December

APPENDIX-5: Progress Illustrations of the Antalya Airport 2 nd International Terminal 186 Construction progress as per December-January

APPENDIX-5: Progress Illustrations of the Antalya Airport 2 nd International Terminal 187 Construction progress as per February

APPENDIX-5: Progress Illustrations of the Antalya Airport 2 nd International Terminal 188 Construction progress as per February

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190 İzmir ADNAN MENDERES Airport

GENERAL INFORMATION ABOUT THE TERMINAL Architectural Project : Yakup HAZAN Terminal Capacity : 5 Million Pas./Year Total Investment of Project : 138.886.782 Euro Investment Period : 24 Month Operation Period : 7 Year 4 Month 26 Days Operation Period Starting Date : 27.05.2007 End of Operation Period : 25.01.2014 Signature Date of Application Contract : 27.04.2005 Area Delivery Date : 27.05.2005 Terminal s Standing Area : 31.869 m 2 Total Terminal Construction Area : 107.699 m 2 Viaduct Total Area : 18.461 m 2 Roads : 69.029 m 2 Car Park Area : 69.168 m 2 Car Park Capacity : 2.237 Apron (m 2 ) : 146.730 m 2 Passenger Bridge Number : 9 Total Check-in Counters : 66 Total Passport Control Desks : 34 Baggage Claim Conveyor : 6 Customs Desk : 4 191

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196 ANTALYA 1st International Terminal

GENERAL INFORMATION ABOUT THE TERMINAL I Architectural Project : Doğan TEKELİ Sami SİSA Arch. Terminal Capacity : 5 Million Pas./Year Total Investment of Project : 65 Million Dolar Investment Period : 24 Month Operation Period : 9 Years Operation Period Starting Date : 01.04.1998 End of Operation Period : 14.09.2007 Signature Date of Application Contract : 16.02.1996 Area Delivery Date : 31.07.1996 Terminal s Standing Area : 27.500 m 2 Total Terminal Construction Area : 54.000 m 2 Car Park Area : 33.391 m 2 Car Park Capacity : 725 Apron (m 2 ) : 46.760 m 2 Passenger Bridge Number : 12 Total Check-in Counters : 60 Total Passport Control Desks : 46 Baggage Claim Conveyor : 6 Customs Desk : 7 197

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202 ANTALYA 2nd International Terminal

GENERAL INFORMATION ABOUT THE TERMINAL II Architectural Project : Doğan TEKELİ Sami SİSA Arch. Terminal Capacity : 5 Million Pas./Year Total Investment of Project : 85.386.000 Dolar Investment Period : 24 Month Operation Period : 3 Year, 5 Month, 26 Day Operation Period Starting Date : 07.04.2005 End of Operation Period : 23.09.2009 Signature Date of Application Contract : 24.02.2004 Area Delivery Date : 30.03.2004 Terminal s Standing Area : 27.920 m 2 Total Terminal Construction Area : 91.454 m 2 Car Park Area : 94.265 m 2 Car Park Capacity : 750 Apron (m 2 ) : - Passenger Bridge Number : 12 Total Check-in Counters : 60 Total Passport Control Desks : 60 Baggage Claim Conveyor : 6 Customs Desk : 4 203

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208 İstanbul ATATÜRK Airport

GENERAL INFORMATION ABOUT THE TERMINAL Architectural Project : Ebru KANTAŞI Passenger Capacity : 20 million pas. / year Terminal Area : 265.000 sq.m. Car Parking Area : 180.000 sq.m. Car Parking Capacity : 7.076 vehicles Passenger Bridges : 23 units Check-in Blocks : 7 Check-in Counters : 224 (CUTE workstations) Luggage Receipt Carousels : 11 Auto. luggage Separating Capacity : 15.000 luggage/hour Travelator Length : 2.100 m Number of Elevators : 57 Number of Escalators : 26 209

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214 Muğla DALAMAN Airport

GENERAL INFORMATION ABOUT THE TERMINAL Architectural Project : Emre AROLAT Bünyamin DERMAN Terminal Capacity : 5 Million Pas./Year Total Investment of Project : 91.997.688 Dolar Operation Period : 8 Year 2 Month 17 Days Operation Period Starting Date : 01.07.2006 End of Operation Period : 28.04.2015 Signature Date of Aplication Contract : 23.06.2004 Area Delivery Date : 29.07.2004 Terminal s Standing Area : 27.189 m 2 Total Terminal Construction Area : 95.587 m 2 Viaduct Total Area : 7.500 m 2 Roads : 28.000 m 2 Car Park Area : 43.346 m 2 Car Park Capacity : 638 Car Passenger Bridge Number : 7 Total Check-in Counters : 60 Total Passport Control Desks : 44 Baggage Claim Conveyor : 6 Customs Desk : 6 215

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220 Ankara ESENBOĞA Airport

GENERAL INFORMATION ABOUT THE TERMINAL Architectural Project : Ercan ÇOBAN Suzan ESİRGEN Süleyman BAYRAK Ahmet YERTUTAN Terminal Capacity : 10 Million Pas./Year Total Investment of Project : 188.702.557 Euro Investment Period : 36 Month Operation Period : 15 Year 8 Month Operation Period Starting Date : 16.10.2006 End of Operation Period : 24.05.2023 Signature Date of Application Contract : 18.08.2004 Terminal s Standing Area : 45.505 m 2 Total Terminal Construction Area : 183.000 m 2 Viaduct Total Area : 12.550 m 2 Roads : 32.200 m 2 Closed Car Park Area : 107.300 m 2 Open Car Park Area : 12.200 m 2 Car Park Capacity : 4.088 Car Apron (m 2 ) : 258.300 m 2 Passenger Bridge Number : 18 Total Check-in Counters : 131 Total Passport Control Desks : 36 Baggage Claim Conveyor : 9 Customs Desk : 6 221

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226 İstanbul SABİHA GÖKÇEN Airport

GENERAL INFORMATION ABOUT THE TERMINAL Architectural Project : Doğan TEKELİ Dilgün SAKLAR M.Emin ÇAKIRKAYA Nedim SİSA 227

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M. Cemil ACAR Head of the Aerodromes Department (Architect, M.Sc.) 232 M. Cemil ACAR, was born in Batman in 1974. He graduated from İstanbul Kabataş High School in 1990, Eastern Mediterranean University English Preparatory School in 1991, Çukurova University Faculty of Architecture, Architecture Department in 1996, and finally Gazi University Graduate School of Natural and Applied Sciences Architecture Major Branch. He worked in private sector between 1996-98, and in Directorate General of State Airports Administration between 1998-2005. He was appointed as Head of Airports Department in DGCA. Currently, he has been working at this position.