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2 2 Constitution Law Utilisation of the Coasts ARTICLE 43. The coasts are under the sovereignty and disposal of the state. In the utilisation of sea coasts, lake shores or river banks, and of the coastal strip along the sea and lakes, public interest shall be taken into consideration with priority. The width of coasts, and coastal strips according to the purpose of utilization and the conditions of utilization by individuals shall be determined by law. LEGAL FRAMEWORK

3 3 Coast Law dated 4/4/1990 no. 3621 Coasts and the lands acquired through filling and reclamation are under the provision and protection of the State. In the context of utilization of the coasts and shores, public interest is considered first. Coast is open to use of everyone on a free and equitable base, no building can be constructed here; walls, hedges, bars, yarns, trenches, piles or similar blocks can not be used here. The Coast Law covers the seas, natural and artificial lakes, and streams and shorelines, opportunities and provisions of using these facilities for public-interest, the procedures for planning and construction in the coasts and shores, acquisition and use of land by filling and reclamation. Article 6 of the Coast Law defines the only coastal structures which is to be construct at the shores. LEGAL FRAMEWORK

4 4 Privatization Implementations Law No. 4046, Adopted on 27 November 1994, Miscellaneous Provisions Article 37. – (Amended by Law No: 4105 of 27.4.1995) With respect to Privatization applications: a) The organizations included in the privatization program according to the provisions of this Law are subject to special law provisions, but provisions of their own establishment laws, if any, and other provisions of laws conflicting with this Law and provisions of Decree No. 233 with the Force of Law conflicting with the rules and provisions of this Law, shall not be applicable to them. However, the provisions of Law No: 815 on Marine Shipping on Turkey's Coasts and Doing Business and Trading within the Limits of Turkey's Ports and Territorial Waters dated 19/04/1926; and provisions of Article 823 of Law No: 6762 on Turkish Commerce dated 29/06/1956 are preserved. Privatization of ports through transfer of ownership is not allowed and only actual persons and/or legal entities of Turkish nationality can take advantage of the privatization of ports by methods other than transfer of ownership. For the company to take advantage of this right: it must be registered in the Turkish Registry of Commerce; it must not have a foreign capital share of over 49 %, Turkish citizens authorized to direct and represent the company must comprise the majority of the relevant personnel and Turkish citizens must have a voting majority as stipulated in the company master agreement. LEGAL FRAMEWORK

5 5 Privatization of Public Services Article 15. – Notwithstanding the provisions of Article 1 hereof, providing that separate laws will be adopted for privatization of public service organizations through transfer of ownership, a) Administrations with national and supplemental budgets and properties, goods and services production units and assets (dams, lagoons, highways, hospitals, ports and other similar goods and services production units) of their affiliate organizations with revolving capital, b) The Public Economic Organizations and their subsidiaries, associates, operations and operational units offering public services and producing goods and services as a monopoly as described in paragraph (B) of Article 35 hereof, shall be privatized under the provisions of this Law through the transfer of operational rights, leases or similar methods not requiring transfer of ownership. The goods and services production of organizations with national and supplemental budgets and of their associated organizations with revolving funds that are in the form of a monopoly only and the goods and services production of Public Economic Organizations that are in line with their original establishment tasks, will be accepted as concessionary activities. Activities falling outside of those stated herein above are deemed to be concessionary activities. Agreements and contracts to be executed in relation with the activities deemed as concessionary in accordance with the provisions of this Article, are in the form of concessionary agreements and contracts, with the special provisions of other Laws pertaining to these issues being reserved. Duration of rights to be granted under this Article through transfer of operational rights, lease or other similar methods, may not exceed 49 years. LEGAL FRAMEWORK

6 6 Pursuant to the Article 155 of the Constitution Law and Privatization implementations Law, the final draft of the Concession Agreement submitted to the opinion of the Council of State after being initialled by the parties. LEGAL FRAMEWORK

7 Black Sea Mediterranean Sea Aegean Sea Samsun Derince Bandırma İzmir İskenderun TCDD PORTS Mersin

8 8 PRIVATIZATION OF THE TCDD PORTS  Mersin, Izmir, Samsun, Bandırma, Derince, Iskenderun Ports of the TCDD have been transferred to Privation Administration by PHC Decision on 30.12.2004.  Privatization method of TCDD ports has been determined as transfer of operational rights.

9 LİMAN ADI PROCEEDS ($US) CONTRACTING DATE Mersin Port MIP-Mersin International Port Management Inc. 755.000.00011 May 2007 Samsun Port Samsunport International Port Management Inc. 125.200.000 Bandırma PortCelebi Port of Bandırma Inc.175.500.000 İskenderun Port LIMAK Iskenderun International Port Management Inc. 372.000.00030 December 2011 Derince Port Coastal engineering and zoning plan studies are ongoing. İzmir Cruise PortBidding date is 7 September 2012. İzmir Container Port Zoning plan studies are ongoing. TOTAL PROCEEDS1.427.700.000 PRIVATIZATION IMPLEMENTATIONS

10 10  The ports have to remain fully operational at all times, maintaining a good service standard. Until some conditions are met, the ports have to continue to offer the present service varieties.  Anti-competitive behaviour is strongly discouraged. Cost separation is encouraged in order to ensure fair and competitive pricing.  There is a port specific investment obligation, usually in the form of capacity increase.  The ports have to be transferred back to TCDD in full working conditions at the end of concession period.  TCDD is seen as the quasi controller in the absence of a Port Authority, forcing the new operators in reporting obligations.  Ports are to be transferred without any personnel. TCDD is going to employ its personnel at different job positions within its organization following the privatization. HIGHLIGHTS OF TRANSFER OF OPERATIONAL RIGHTS AGREEMENT(TORA)


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