Public Private Partnership (PPP) Projects in Turkey Murat OZDEMIR Country Advisor - Canada Investment Support and Promotion Agency of Turkey (ISPAT) Montreal - June 4th, 2014
Agenda VISION 2023 PPP IN TURKEY IMPLEMENTATION STATISTICS CURRENT PORTFOLIO SELECTED ONGOING PROJECTS SELECTED PIPELINE PROJECTS
Turkey: Vision 2023
Public Private Partnership (PPP) Projects
Cumulative Value and Number of PPP Contracts (1986-2013) $100,000,000,000 $75,000,000,000 $50,000,000,000 $25,000,000,000 As the end of 2013, total value of 180 PPP implementations is about $100 Billion Estimated cost of PPP projects pipeline : $86 Billion* $0 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 30 22.5 15 29 %62 of implementations amounting 91% of total contract value are in 2003-2013 7.5 0 1 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source : Ministry of Development 1 0 0 0 0 1 8 2 1 11 10 16 4 4 6 3 6 5 7 6 9 7 4 13 17 9 2013 was the peak year, 29 implementations with a contract value over $56 Billion
PPP Models Implemented in Turkey Built-Operate-Transfer (BOT) Built-Operate (BO) Built-Rent-Transfer (BRT) Transfer of Operational Rights (TOR) Number of implementations vs. Contract Value (end of 2013) BO 3% BO 4% TOR 37% TOR 24% BOT 54% BRT 7% BOT 65% BRT 6% Source : Ministry of Development
Transportation projects lead with 69.8 Billion USD (70%) Source : Ministry of Development
Ongoing PPP Implementations - Selected Projects Istanbul-Izmit-Izmir Motorway BOT project, 22 years 4 months (construction + operation) 421 km including Izmit Bay crossing Construction started in 2010 3rd Bridge on Bosphorus BOT project, 10 years 2 months (construction + operation) 299 km motorway, 115 km access roads (partially tendered) Tender completed in May 2012, construction started in May 2013 Eurasia Car Tunnel BOT project, 26 years (construction + operation) 14.6 km route, 5.4 km twin deck tunnel Construction started in 2011
3rd Airport in Istanbul (CAPEX ~10 Billion USD) Northwestern part of Istanbul 4 phases, 1st phase to be completed by 2016 BOT Model, 25 yrs of operation Passenger and traffic guarantees to be provided for 12 yrs (342 mln pax) Connection to North Marmara highway and 3rd bridge Ultimately 150 mln pax/yr (world largest airport with 6 runways) Tender completed in May 2013, 22.2 Billion Euros for 25 years
PPP Project Pipeline - Selected Projects Motorways High Speed Rail Health Campuses Channel Istanbul Container Terminals, Ports, Marinas
Estimated Value of Projects Announced by the Government* Area Cost (USD bn) PPP (USD bn) Transportation 246 45 Highways 108 28 Railways 64 1 Air Transport 40 10 Sea Transport 34 6 Urban Development 405 0 Urban Regeneration 400 0 Istanbul Finance Centre 5 0 Other 41 41 Health Campuses 11 11 Canal Istanbul 30 30 *As of May 2013
Motorway Network and PPP Projects 5,500 kms of new motorways, ring roads, and bridges 3 under construction and 14 new PPP projects
High Speed Rail Network High speed rail network to reach 10,000 km by 2023 13 new projects of 4,955 km have been announced completed under construction (completed before 2015) planned (completed after 2015)
Canal Istanbul (CAPEX ~30 Billion USD) Man-made waterway planned to be built on the outskirts of the European side of the city Connect Black Sea to Marmara by 2023 45-50 km long, 150 m wide, and 25 m deep Urban developments Ongoing preliminary studies for two years BOT model
Filyos and Çandarlı Port Projects Filyos Port will be located in the Black Sea region and will facilitate exports of steel, will have 25 million metric tonnes/year throughput capacity by 2020. Development plans for the port were completed in 2012. Siteworks tender in 2014. For the port and industrial region in the surrounding area 6 million cubic meters were re-zoned for use. BOT model (CapEx~640 M Euros) Located in the Aegean Coast, Gulf of Candarli in İzmir Hub for connecting MED trade lines to Black Sea countries Çandarlı port will have a capacity of 12 million TEU in three phases. To become the biggest port of Turkey and 10th the world when its construction ends. BOT Model (CapEx~950 M Euros)
Integrated Health Campuses (~11 Billion USD) 38 projects, 45,000 beds 4 under construction, 9 on contract phase, 3 on final bidding, 1 on bidding phase 2-3 years of construction + 25 years of operation An annual rent will be paid to the operators A web portal for all tendering processes by the Ministry of Health www.ppp.gov.tr
Other Relevant Projects
Istanbul Finance Center - Ongoing Construction Projects Total construction area of 2,500,000 sqm; expected cost of 1.7 billion USD 6 km of subway construction New property development mainly in Non-CBD Asian side of Istanbul (aka Atasehir) 560,000 sqm of office space 90,000 sqm of shopping area 70,000 sqm of hotel 60,000 sqm of residence 2,000 seat conference centre Current property owners Ziraat Bankasi, Halkbank, Vakifbank Capital Markets Board of Turkey Banking Regulation and Supervision Agency Private companies
Source : EMRA Feed-in-Tariff Program for Renewables
Conclusion Upper middle income country, high economic growth & domestic demand growth will continue in the foreseeable future (2023 targets and fiscal prudence) Investment in long-term stability & additional growth The demand for infrastructure and related services is strong in Turkey Extensive pipeline of projects, Government aims to utilize PPP models for increasing number of projects with steady cash flows PPP provides additional investment and enhance management of operations and risk
Thank You... Q&A ISPAT Coordinates