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Law No.: 4046
Date of Adoption: 24 November 1994
Published in Official Gazette Issue:
27
Date of Publication: 27
November 1994
Purpose and Content
Article 1. The purpose of
this Law is to regulate the principles for the
privatization, which aims to improve productivity in
the economy and to reduce public expenditures, of:
A. Establishments to be placed
under the scope of privatization are listed in this
article and will be referred to as "Organizations"
herein after in the implementation of this Law;
a) The State Economic Enterprises (SEEs,)
their enterprises, associated corporations, operations,
operational units and assets, as well as the public
shares in their participations;
b) Public shares in commercial
organizations that are not under the status of State
Economic Enterprises but which are owned in full or by
more than 50 % by the state and/or by other public
legal entities, and the public shares in the
organizations, operations, operational units and
assets belonging to these organizations, and in
participations;
c) Public shares and shares that
belong to the Treasury in participations of the State;
d) Administrations with national
and supplemental budgets and the other subordinate
organizations with revolving funds and assets of the
State Economic Enterprises which are not directly
related to public services provided by the Public
Economic Organizations (PEOs) and their shares in
their respective participations;
e) Commercial organizations and
shares in their every type of participations without
taking into consideration the amount of their
respective shares, that belong to the Municipalities
and to the Provincial Directorates;
f) Properties and the goods and
services production units of the organizations with
national and supplemental budgets and assets (dams,
lagoons, highways, hospitals, ports and other similar
goods and services production units) of the
organizations with revolving capital belonging to
those above mentioned and the rights of operating
appropriate goods and services production units in
accordance to the principle establishment purposes of
the Public Economic Organizations as referred to in
Article 35, paragraph (B) of this Law;
B. This Law, in accordance with the
purpose stated above, contains the provisions related
to:
a) The establishment of the "Privatization
High Council" and the "Privatization Administration"
and the determination of their duties,
responsibilities, and rights,
b) The establishment of the "Privatization
Fund" and the "Public Participation Fund" and the
determination of the resources and utilization fields
of such funds,
c) "Privatization Implementations",
d) The accrual of interest
to the monetary funds accumulated in the "Account for
Encouraging Savings by Employees",
e) The supply of financial and
social rights to the personnel contracted at
organizations included under the scope of
privatization who might become unemployed as a result
of privatization,
f) The personal and social rights
of the public employees working for the organizations
included within the scope of privatization.
Grant or lease of the operational
rights of the goods and services production units and
assets (dams, lagoons, highways, hospitals, ports and
other similar goods and services production units) of
the organizations with national and supplemental
budgets and their other organizations with revolving
capital and the privatization of the Public Economic
Organizations that are included among the "State
Economic Enterprises" and are defined in the Decree no
233 with the Force of Law and of their subsidiaries,
associates, operations, operational units, and assets
by methods other than the transfer and/or assignment
of ownership, is subject to the provisions of this Law.
However, the transfer of ownership's must be drafted
by separate laws depending on the nature and
characteristics of public services provided by these
organizations.
Principles
Article 2. In the
Privatization Implementations, the principles are as
follows;
a) Paying Special Job Loss
Compensation in addition to other indemnities
foreseen in the collective bargaining agreements and/or
in the existing laws in relation with potential
employment reductions that may occur,
b) Determining the methods of
privatization in line with the terms and conditions of
these organizations and in accordance to their
respective characteristics,
c) Not using the proceeds of
privatization for general budget expenditures and/or
investments,
d) Preventing the negative effects
resulting from a monopolistic structure that may occur,
e) Procuring of a shareholders'
group capable of undertaking the responsibility and
authority of management, as well as the expansion of
the ownership,
f) Including public banks in the
organizations having priority in privatization within
the framework of the privatization process and having
them privatized as promptly as possible,
g) Creating privileged State shares
for strategic fields,
h) Having natural resources
privatized only for a certain period of time, through
granting operational rights,
ύ) Having the privatization procedures, includin g
value assessment, implemented on principles of
openness and transparency,
i) Not allowing for transfers to
public institutions, organizations and to the local
administrations during privatization, unless the
necessitated by the sake of national security and/or
the best interest of the public.
Priorities on decisions to be taken
in accordance with the principles and the purposes
defined herein above, and the principles and the
methods of privatization of which such priorities will
be subject to, are determined by the Privatization
High Council on the basis of the qualifications of
such organizations and taking into consideration
conditions required by the country's economy.
Duties of the Privatization High
Council
Article 3. (Amended by Law No:
4232 of 3.4.1997) The Privatization High Council,
under the chairmanship of the Prime Minister, with the
members comprised of the Deputy Prime Minister (in
case of a coalition of more than one party, the Deputy
Prime Minister belonging to the other ruling party
having the highest number of votes in the Turkish
Grand National Assembly), State Minister to be
designated by the Prime Minister, a State Minister
responsible for privatization (if there is no State
Minister assigned to this position, then another State
Minister will be designated by the Prime Minister),
the Minister of Finance and the Minister of Industry
and Commerce has been established. The Council will
meet in full attendance and all decisions will be
taken on full consensus. The secretariat of the
Council will be conducted by the Privatization
Administration.
Duties of the Council are listed
herein below:
a) To take decisions to include the
organizations referred to in Article 1 of this Law
within the scope of privatization; to execute the
financial and legal restructuring of those
organizations which are not deemed ready for
privatization to include those organizations whose
initial preparations have been completed and/or the
ones for which an initial preparation was not deemed
necessary, to directly include in the "privatization
program"; and to determine time periods for the
finalization of the privatization process for the
organizations within the scope of privatization,
b) To decide to restore
organizations back to their former status by removing
those which are deemed ineligible out of the scope of
privatization and/or to decide to prepare those
organizations already in the privatization program and
for which the process is deemed necessary,
c) To decide on the method of
privatization in the transfer of ownership of the
organizations whether through sale, lease, transfer of
operational rights, granting of property rights other
than ownership, and other legal dispositions
conforming to the particular transaction by the
Privatization Administration;
d) To approve the final transfer
procedures of the organizations in the privatization
program to "actual persons and/or legal entities at
private law, through sale, lease, transfer of
operational rights, granting of property rights other
than ownership, and other legal dispositions
conforming to the particular transaction realized by
the Privatization Administration;
e) To decide to reduce the size of,
terminate activities permanently or temporarily, close
or liquidate those organizations as deemed necessary
under the scope of privatization;
f) To decide to borrow funds from
domestic and/or foreign sources for use by the
Privatization Fund and to this end, to issue
government-guaranteed or unguaranteed bonds in local
and international markets and if required, to issue
all kinds of securities and other negotiable
instruments;
g) If and when required, to decide
to purchase and resell shares, securities and other
negotiable instruments of the organizations in the
privatization program;
h) To discuss and approve the
income and expenditure programs of the Privatization
Fund and the Privatization Administration,
ύ) To evaluate the current year's performance and the
upcoming year's programs of the Privatization
Administration, and if necessa ry,
to take precautionary measures to improve deficiencies,
i) To take decisions on other tasks
assigned by laws and other legislation.
The Council may authorize the
Presidency of the Privatization Administration
concerning subjects cited in paragraphs (d) and (g) of
this article where it sees beneficial for the
execution of the service, provided that financial
limitations, as well as the procedures and principles
of such authorization shall be clearly identified.
The establishment and the
responsibilities of the Privatization Administration
Article 4. The
Privatization Administration (The "Administration")
possessing public legal entity and an exclusive budget,
reporting directly to the Prime Minister has been
established. The Prime Minister can use his/her powers
deriving from this law via a State Minister he/she
will designate responsible for privatization. The
Administration is a temporary establishment and when
the task of privatization is completed, the employees
of the establishment will be transferred to related
organizations based on their qualifications.
Duties of the Administration are
stated herein below;
a) To execute the decisions of the
Council,
b) To make decisions on pertinent
issues and to implement the necessary procedures in
line with the rights and duties granted and delegated
by the Council,
c) To present proposals to the
Council for the inclusion of organizations into the
scope of the privatization or returning the
organizations that have been included in the scope of
privatization back to their former status, or
orienting the preparation of those organizations that
are in the privatization program when required,
d) To realize the
implementation of all necessary procedures for the
privatization of the organizations and to execute the
follow-up and coordination of the activities for the
preparation of those for privatization,
e) To decide whether or not to
transform those organizations in the privatization
program which do not maintain the status of an
incorporation into joint-stock companies,
f) To determine the amount of stock
capital of organizations in the privatization program,
to make necessary arrangements for their establishment,
merger or division; to determine the principles for
the properties and the rights and obligations; to make
all arrangements for the accounts and activities of
the organizations that are under the status of an
incorporation or transformed into a joint-stock
company and to take necessary precautions to ease such
procedures until such time that public shares in those
organizations drop below 50% (Fifty Percent) and to do
the same for others until the date of assignment and/or
transfer as a result of the privatization,
g) To conduct and to implement
every type of procedural operations related to
privatization that are essential for privatization,
h) Within legal limitations, to
make arrangements for the financial, administrative
and legal structures of organizations,
ύ) To make decisions on resource utilization,
acquisition and leasing of immovable properties or
economizing on those immovable properties by any other
agreement; on obtaining domestic and international
credits; on recruiting or reducing personnel under t he
principle of increasing productivity, working
conditions; on demands and requirements for the
temporary assignment of personnel
overseas, for those organizations
that are in the privatization program,
i) To present proposals to the
Prime Minister for assignments and appointments to and
for the withdrawal from the chairmanship and
membership of the board of directors of organizations,
of auditing and liquidation committees, and from
general managerial positions for those organizations
under the privatization program separately from the
organizations to which they belong and not deemed
necessary for transformation into an incorporated
company, and of the managerial positions in their
administrative units thereof.( A four year university
degree is a prerequisite to be eligible to receive
appointment to these positions),
j) To determine the quantity and
value of every type of securities and any other
negotiable instruments to be issued through the
Council's decision,
k) In the event of investing
capital in kind in organizations, to evaluate or have
evaluated/appraised such capital,
l) To manage the Privatization Fund,
m) To conduct all types of research
activities, project studies, advertisements, promotion,
public relations, financial auditing and legal,
technical, administrative and financial evaluations
and/or to have such works conducted by assigned
consultants as and, when needed.
n) To provide loans to
organizations in the scope of privatization when
required for privatization and to determine the
interest rates and the terms and conditions for such
financing provided by the Privatization Fund under the
condition that the interest applicable to such funding
shall not be in excess of the highest interest rate
applied by public banks,
o) To perform other duties defined
by the laws and other legislation.
The Administration may authorize
the organizations in the privatization program in
subjects referred to in paragraphs (a), (b), (h), and
(i) where it is deemed necessary and beneficial by the
Administration, provided a clear definition of
principles and methods of such authorization be
outlined.
Administration Service Units
Article 5. a) The main
service units of the Administration consist of; the
Capital Markets Department, Finance and Fund
Management Department, Project Evaluation and
Preparations Department, Employment and Social
Services Department, Consultancy Services Department,
and Contract Services Department.
b) The Consultancy Units of the
Administration consist of; the Department of Legal
Consultancy; Research, Planning and Coordination
Department; Consultants to the President, and Press
and Public Relations Department .
c) Supplementary Units of the
Administration consist of; Personnel and Education
Department, Administrative and Financial Department,
and Defense Expertise Department.
The president and the units defined
in paragraphs (b) and (c) of this Article perform the
tasks defined in Law 3046 dated 27, September 1984.
The positions for the head-quarters and Istanbul
liaison office of the Administration are listed in the
enclosed schedules (1) and (2).
Personnel Regime
Article 6. The personnel of the
Administration is subject to the provisions of Law No
657 on Civil Servants. The President and other
managers of the Administration in every level may
delegate some of their powers to their subordinates,
provided that the limitations of such power assignment
shall be clearly defined in writing. The President of
the Administration will be appointed by joint decree,
the Vice-Presidents through a proposal by the
President of the Administration to be approved by the
Prime Minister, and other personnel of the
Administration will be appointed by the President. The
President, Vice Presidents, Advisor to the President,
Department and Project Group Heads must be graduates
of a 4-year institution of higher education as well as
having the sufficient knowledge and experience needed
to carry out their duties. The President and the Vice
Presidents are subject to the provisions applicable to
the Undersecretaries and Deputy Undersecretaries of
the Undersecretariats reporting to the Prime Ministry
in respect of their salary, additional fringe benefits,
pay increases and compensations.
The Administration can employ
personnel on individual employment contracts for the
positions of the President, Vice Presidents, Advisor
to the President., First Legal Consultant, Legal
Consultant, Department Head, Head of Project Group,
Lawyer, Expert (Branch Manager), Expert, Assistant
Expert and Department Doctor. They can be enrolled to
the Turkish Pension Fund upon demand.
Employees of the organizations with
national and supplemental budgets can be
recruited by the Administration on
the basis of individual employment contracts with the
approval of the organizations for which they work.
Such Administration requirements are finalized by the
related organization(s) on priority. Such personnel
are deemed to be on unpaid leave and during this
period, their personal rights are maintained as if
they would be employed at their respective
organizations. Such periods will be taken into account
in regards to their promotions and retirement benefits,
and will receive promotions when so entitled without
the need for formal procedural applications. No
compulsory service obligations are required from these
employees from their own organizations for the period
they serve in the Administration.
The terms and conditions of
employment contracts for those employed on contractual
basis and their financial entitlement, shall be
determined by the Council of Ministers.
The personnel employed by the State
Economic Enterprises and by their subsidiaries and by
enterprises who are in the scope of privatization,
whose services are required by the Administration, can
be retained by the Administration through the sole
decision of the Administration, under the condition
that their personal rights and entitlement and wages,
shall be met by their own organizations. These
personnel are deemed to be on unpaid leave from their
organizations for the period they will be serving in
the Administration.
Overtime will be paid both to the
personnel actually working at the headquarters
organization of the Administration, and to the
personnel placed on duty in accordance with the
provisions of this Article in respect to the
principles and methods to be defined and determined by
the Administration, provided that such overtime rates
shall not be in excess of the rates and the amounts
defined in the amended Article 31 of the Law No. 3056,
dated 10 October, 1984.
The provisions of Law No. 657 on
Civil Servants and Law No. 1389, dated 2 February,
1929 will be applied in the distribution of the
attorney's fees collected from the losing party as a
result of decisions issued by the Courts and by the
Bailiff's Offices in favor for the Administration,
Determination, assignment,
utilization and the cancellation of positions in the
Administration and the other matters in relation to
the positions will be governed in accordance to the
provisions of the Decree No. 190 with the Force of Law
on General Staff Positions and Procedures.
Prohibitions and Penal Clauses
Article 7. As for organizations
in the privatization program which are subject to the
provisions of the Capital Market Law and whose stocks
are traded on the stock exchange, the Chairman and
members of the Board of Directors, the internal
auditors and other personnel, the personnel of the
Administration, the President and members of the
Council may not disclose any non-public information or
dates they learn during their function on accounts,
operations, and enterprises of their organizations.
They are not allowed to use such
information for their own benefit or for the benefit
of third parties or to trade securities of such
organizations on or off the stock exchange for
pecuniary benefits or in such manner so as to disrupt
the equality of opportunities among traders. They may
not further be beneficiaries of transactions realized
through methods of privatization under this Law as or
in the capacity of a buyer or a lessee. This
prohibition shall be applicable also to the spouses
and children of persons mentioned herein. The
President and the members of the Privatization High
Council and the President of the Privatization
Administration, Vice Presidents, Heads of the
Departments and Legal Consultants to the
Administration and the Head and members of the Value
Assessment Commissions, may not take office in
privatized organizations for two years following their
date of privatization.
Persons who violate these
prohibitions will be sentenced to six month to two
years' imprisonment and a fine equal to three times
the unjust enrichment, jointly or separately,
depending on the nature and importance of the act.
Permanent personnel and personnel
under contract of the Administration and the
organizations in the privatization program are deemed
to be civil servants described in Article 279 of the
Turkish Criminal Code and any offense of these
personnel in respect to privatization funds, documents,
promissory notes and assets, or on balance sheets,
memoranda, reports and other similar documents and
books, or offenses in relation to their functions,
will be governed by the provisions of the third and
sixth sections of volume two of the Turkish Criminal
Code.
Administration Budget
Article 8. The expenditures of
the Administration are met by the administration
budget, to be determined by the Council under the
condition that such expenditures shall not exceed the
5% of the Privatization Fund. The exchequer of the
administration budget is the President of the
Administration.
Privatization Fund and its sources
Article 9. All proceeds obtained
from the privatization process and all dividends
obtained from the organizations transferred to the
Administration as well as proceeds obtained from the
sales of securities and other negotiable instruments
and documentation, income obtained from the funding
supplied to the organizations transferred to the
Administration, and other resources and earnings
allocated by other legislation, are credited to the
Privatization Fund account to be opened at the Turkish
Ziraat Bank, separate from the budgets of the related
organizations.
Utilization Fields of the
Privatization Fund
Article 10. Privatization Fund
shall be used for:
a) Special Job Loss Compansation
payments and for the payments, when and where
necessary, for transfers in amounts determined by the
Council to the account that will be opened for the
purpose of meeting such expenditures of education and
training services as career development, vocational
and apprenticeship training, from the privatization
revenues,
b) Payment of monthly salaries,
fringe benefits and all kinds of personal rights for
employees who will be transferred in accordance with
the provisions of Article 22 of this Law for the
period from their appointment to the termination of
their contract with their previous organization,
c) In payments, in accordance with
Article 24 of this Law,
d) Meeting preparatory expenditures
of organizations included in the scope of
privatization, in order to facilitate their
privatization,
e) Meeting expenditures required
for financial, administrative and legal preparatory
work in organizations transferred to the
Administration,
f) Contributing to the capital
increase in the shareholdings of the Administration,
g) If required, to purchase (shares),
all kinds of securities and negotiable instruments of
organizations in the Privatization Program,
h) Procuring all kinds of goods and
services that are necessary for the implementation of
the privatization process,
ύ) Providing debt financing for organizations that are
transferred to the Administration under the terms and
procedures to be determined by the Administration,
i) Allocating the necessary funds
for the budget of the Administration,
j) The liquidation of the
outstanding debts and obligations of organizations
that have been privatized,
k) The payment of fringe benefits
and of its increases pursuant to Supplemental Article
24 of the Social Security Law, dated 17 July, 1954,
No. 506, within the framework of Article 23 of this
Law, and
l) Performing other duties that are
assigned to the Administration under the Legislation.
In utilization of revenues
accumulated in the Privatization Fund: priority shall
be forwarded to special job loss compensation, supply
of other related services and for the payments to meet
the administrative, financial and legal expenditures
for preparatory work of organizations in the scope of
privatization,
No resource can be transferred from
the Privatization Fund to the general budget. In
addition, other than the transfer of funds to the
Public Participation Fund pursuant to Temporary
Article 8 of this Law, no transfer can be made from
the Privatization Fund to any other fund.
Accounting and utilization terms
and procedures of the Fund and the terms and
principles for the accrual of interest to the fund
balances, will be determined through the regulations
to be drafted by the Administration and approved by
the Council.
(Amended by Law No. 4568/2 of
23/5/2000)
The excess resources from
the Privatization Fund can be transferred to the
Treasury accounts for payment of domestic and
international debts. No transfer can be made from the
Privatization Fund to any other fund.
Accounting and utilization terms
and procedures of the Fund and the terms and
principles for the accrual of interest to the fund
balances, will be determined through the regulations
to be drafted by the Administration and approved by
the Council.
Audit
Article 11. The Administration's
budget will be audited by the Exchequer and Audit
Court pursuant to Law No. 832 dated 21 February, 1967.
Activities of the Privatization Administration and the
utilization of the Privatization Fund, as well as
every type of services and applications at the time of
privatization, are audited in accordance with the
provisions and principles of the Decree No. 72 with
the Force of Law concerning the Prime Ministry High
Auditing Board and of Law No. 3346, dated 2 April,
1987.
Organizations in the privatization
program are audited in accordance with the provisions
and principles of the Decree No. 72 with the Force of
Law concerning the Prime Ministry High Auditing Board
dated 24 June, 1983, and of Law No. 3346, dated 2
April, 1987 until the public share in their stock
capital drops below 50%.
Provisions not to be applied
Article 12. Transactions under
this Law will not be subject to the provisions of Law
No. 2886 concerning State Tenders, Law No. 1050
concerning General Accounting, or the provisions of
Exchequer and Audit Court Law No. 832 related to visas
and registrations.
Determination of strategic fields
and organizations and of the preference shares
Article 13. In relation to
organizations in the privatization program, the
Council is authorized:
a) To determine strategic subjects
and organizations;
b) In the event that the state's
shareholdings in organizations determined to be
strategic under paragraph (a) above falls below 50%,
and for the purposes of preventing monopolization and
of protecting national economic and security interests,
to determine the number of preference shares granting
special management and approval rights in the
management bodies of the organizations and the rights
attaching to those shares which the state shall enjoy;
to change the quantity of these shares and the rights
attaching there to; and to remove such sectors and
organizations determined to be strategic from the
scope of this program.
Provided, however, that if and when
more than 49% of the capital shares of the
organizations listed below are decided to be
privatized, preference shares must be established in
them:
Turkish Airlines (THY)
Turkish Ziraat Bank
Turkish Halk Bank
TMO (Soil Products Office)
Alcoholid Factory
Turkish Petroleum (TPAO
refineries).
Sale of Real Estate to Foreigners
Article 14. Sale and
transfer of real estate to foreign actual persons and/or
legal entities within the framework of the
privatization process to be conducted in accordance
with the provisions of this Law are subject to the
provisions of the Legislation in force on the basis of
rules of reciprocity.
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.
Protection of Competition following
the Privatization Process
Article 16. As a result of
the privatization process in accordance with the
provisions of this Law and with regards to the
protection of the health and security as well as the
economic benefits for consumers in accordance with the
operation of the goods and services markets, economic
necessities and public benefits, including monopolies
within the boundaries of the Republic of Turkey, the
following shall be prohibited:
a) Dividing up of good and services
markets and sharing and/or controlling every type of
market resources and units,
b) Creation of barriers or
limitations for the activities of competitors or the
prevention of new players from entering into the
market,
c) Applying different conditions on
contestants with equivalent status for equal rights,
obligations and liabilities,
d) Obliging buyers to purchase
other goods and services in conjunction with certain
goods and services, or to make compulsory the sale of
certain goods and services demanded by wholesalers or
intermediaries on display of other goods and services
or to place forth conditions for the resale of certain
goods and services already supplied.
Necessary precautions are taken by
the Ministry of Industry and Commerce safeguarding
against the existence of any type of legal operations
and acts in the form of mergers or takeovers through
certain agreements, applications and decisions in a
manner directly or indirectly, seriously preventing,
disrupting or restricting competition and causing
creation of monopolies, are observed.
The procedures and principles for
the application of this Article are determined through
the regulations prepared by the Ministry of Industry
and Commerce and approved by the Council of Ministers.
Exemptions and legal and criminal sanctions applicable
to circumstances mentioned in paragraphs (a), (b), (c)
and (d) of this Article are subject to provisions of
the relevant Legislation.
Provisions related to the
Privatization Process
Article 17. In accordance with
this Law;
A. Under this law, upon the
proposal of the Administrartion, the Council will
decide to include the following in the scope of
privatization together and/or separately:
a) State Economic Enterprises,
their subsidiaries, associates, operations,
operational units, assets and the public shares in
their participations,
b) Public shares in the commercial
organizations which are not in the nature of State
Economic Enterprises but whose capital are fully or by
more than 50% owned by the State or by other public
legal entities and their subsidiaries, associates,
operations, operational units, assets and the public
shares in their participations,
c) Public shares in other
participations of the State and the shares belonging
to the Treasury,
d) Properties and shares of
organizations with national and supplemental budgets
and of their subsidiaries with revolving capital and
the shares in their participations that are not
directly related to the public services supplied by
these organizations.
The decision of the Council with
regards to the inclusion of organizations into the
scope of privatization shall also state which
organizations will undergo financial and legal
preparatory work, which shall be directly taken into
the privatization program and which methods will be
employed in privatizing and in what time frame their
privatizations will be finalized.
B. Organizations in the scope of
privatization which are to undergo financial and legal
preparatory work for privatization will retain their
existing status and remain associated to the related
ministries or institutions until the completion of the
restructuring process. The related financial and legal
restructuring process for privatization will be
carried out by the organization(s) to be designated by
the Council. Upon completion of restructuring for
privatization, organizations will then be included in
the privatization program through a new decision of
the Council. Organizations that are taken directly in
the privatization program and organizations that are
restructured for privatization (excluding the capital
shares and assets of their subsidiaries and the
capital shares and assets of the organizations which
are not in the nature of a subsidiary, but have a
majority of the capital owned by the state) will be
deemed to have been transferred to the Administration
as of the date of the Council's decision without any
further transaction or payment of any consideration.
Organizations taken in the privatization program and
transferred to the Administration will be deemed to
have been disassociated from their related ministry or
organization and brought within the range of the
Administration, as of the date of the Council's
decision.
C. As for the organizations with
national and supplemental budgets and the goods and
services production units and assets of their
associated organizations with revolving funds referred
to in paragraph (a) of Article 15 and the Public
Economic Organizations and their subsidiaries,
associates, operations, operational units, and assets,
the decisions to take them in the privatization
program will be taken by the Council.
Privatization of these entities by
methods other than transfer of ownership will be
carried out by the Administration. However, they will
retain their existing status and remain associated
with the institutions and/or organizations owning them.
D. If any organizations in the
scope of privatization is subsequently removed from
the scope of privatization due to changing conditions,
its former status shall be restored by a decision of
the Council.
E. Prices and tariffs of the goods
and services produced and /or sold by joint-stock
companies in the privatization program is determined
by their board of directors, and in other
organizations through their authorized management
bodies.
F. Decisions to include
organizations in the privatization program and
approval of the final transfer at the conclusion of
privatization shall be published in the Official
Gazette.
Privatization Methods, Value
Assessment, Tender Methods
Article 18. (Amended by Law No:
4232 of 3.4.1997) The privatization methods, value
assessments and the tender methods with regards to the
privatization of organizations in the privatization
program are stated herein below:
A. Privatization Methods:
Organizations in the privatization
program are privatized through the use of one or more
of the methods mentioned below.
a) Sales: Transfer of the ownership
of goods and services units in the assets of
organizations in full or partially for consideration,
or transfer of all or some of the shares of these
organizations through domestic or international public
offerings, block sales to actual persons and/or legal
entities, block sales including deferred public
offerings, sales to employees, sales on the stock
exchange by standard or special orders, sales to
securities investment funds and/or securities
investment partnerships, or any combination thereof,
by taking into consideration the prevailing conditions
of the organizations.
b) Lease: Grant of the right of use
of all or some of the assets of organizations for
consideration and for a designated period of time.
c) Grant of Operational Rights:
Grant of a right of operation of organizations as a
whole or of their goods and services production units
in their assets for consideration for a designated
period of time, with retention of ownership rights.
d) Establishment of Property Rights
Other Than Ownership: Restriction of the goods and
services production units and assets of organizations
with certain property rights, whereby the owner
consents to dispositions of the assignee on the rights
of facility thereon or the owner renounces from the
use of these ownership rights, in the format and under
the conditions specified in the Turkish Civil Code,
with retention of ownership by the owner institution.
e) Profit Sharing Model and other
legal dispositions depending on the nature of the
business: Other methods defined in general provisions
of law and/or special laws which are not included in
the aforementioned privatization methods and which
take into account the particular characteristics and
structures of the relevant organizations.
The Council shall determine which
methods of privatization described above will be used
in each case depending on the particular requirements
of the transaction.
B. Value Assessment ( Amended by
Law No: 4232 of 3.4.1997 )
Value assessment of organizations
in the scope of the privatization program will be
performed by Value Assessment Commission formed within
the Administration pursuant to this Law.
a) Formation of the Value
Assessment Commission:
The Value Assessment Commission
consists of five members chaired by the Head of the
Project Group responsible for privatization
proceedings of the organization in the scope of
privatization and having as members an expert of the
project group responsible for the privatization
proceedings, Head of the Department of Project
Evaluation and Preparation or an expert of this
department, Head of the Department of Capital Markets
or an expert of this department and Head of the
Project Group responsible for Property Affairs Group
Head or an expert of this group. The Commission
resumes its duty upon proposal of the President of
Administration and approval of the Prime Minister.
Alternate members are appointed to the positions as
described hereabove in the same number and method.
b) Proceedings of the Commission:
The Commission convenes with the
presence of all members and resolves by absolute
majority. Abstentions are not allowed in decisions. If
deemed necessary by the commission, a sufficient
number of local and/or foreign advisors may be
appointed by the Administration for assistance to the
value assessment proceedings without being allowed to
vote for or against decisions.
c) Functions of the Commission
The Commission, through the
application of at least three of the internationally
recognized methods as: discounted cash flow (net
present value), book value, net asset value,
depreciated replacement value, break-up (liquidation)
value, price/profit ratio, market capitalization value,
market/book value, expertise value and price/cash flow
ratio ; shall undertake value assessments and tender
method with regards to attribute, service distinction,
potential future cash flow, sector and market
specifications, industrial, commercial and social
features, machinery, vehicles, equipment, goods and
row materials, finished and unfinished material stocks,
all movable and immovable properties owned by the
organization, virtues and current conditions,
receivables and payable accounts and bills and all
rights and obligations of those establishments within
the scope of privatization. The Administration will
make public upon approval the tender outcome and value
assessment results.
Provided that the privatization
procedures of an establishment in the privatization
program is carried out based on the last paragraph of
Article 4 of this Law, value assessment shall be
realized within the parameters as dictated in this
paragraph under the guidance of a commission
established through the judgment of the official
decision making bodies and chaired by the exchequer of
the establishment at hand.
C. Formation of Tender Commissions
and Tendering Methods :
Bidding proceedings related to the
application of the tender methods described in
paragraph (A) of this Article are carried out by
tender commission established pursuant to this Law.
a) Formation of the Commission:
The Tender Commission consists of
five members, chaired by the Vice President in charge
of the project group responsible for the privatization
proceedings of the organization in the privatization
portfolio and having as members the Head of the
Project Group, an expert of the group, Head of the
Department of Tender Services or an expert therefrom
and a legal consultant or a lawyer from the Legal
Consultancy Department. The Commission shall resume
duties upon proposal of the President of the
Administration and approval of the Prime Minister.
Alternates are appointed to the positions in the
Commission as described hereabove in the same number
and method.
b) Proceedings and duties of the
Commission:
The Commission convenes with the
presence of all of members and sanctions decisions
through an absolute majority. Abstentions are not
allowed in decisions. Any member objecting to the
decision must justify opposing views and record it
beneath the decision with his / her endorsement. Each
meeting of the Commission and the discussions between
the Committee and bidders are recorded in memoranda
which are endorsed by the commission members and/or
the present bidders.
c) Tender Methods:
The tender methods consist of the
closed bidding, bargaining, public auction and closed
bidding among designated bidders.
Closed Bidding Method: Proposals
shall be received in written form. The proposal is
sealed in an envelope on which name, surname and
notice address of the bidder are cited. The bidder
stamps or signs the envelope flap at the sealing place.
Together with receipt of the temporary bid bond or
bank guarantee letter and other required submittals,
this envelope is placed in a second envelope and
sealed. The name, surname and open address of the
bidder and title of the tender are cited on the second
envelope. The bidder must quote the offer price in
letters and numbers, sign the proposal and state in
writing that all specifications and appendices thereto
have been read and understood.
Any proposal which does not comply
with any of the above provisions or which contains
erasures, scrapings or corrections on the outer
surface shall be rejected and considered non-submitted.
The proposal envelopes are delivered to the
Administration against signed receipts until deadline
of the date and hour for proposal submission. All
other matters are stated on the tender specifications.
The submitted proposals may not be withdrawn for any
reason whatsoever. The outer proposal envelopes are
opened in the order received at the predetermined date
and hour, and all received proposals are listed in a
memorandum, followed by determination of existence of
all the required submittals and the required temporary
bid bond. The receipt reference on the outer envelope
is also inscribed on the inner envelope. If submittals
and temporary bid bond found in the outer envelopes
are not complete and in compliance, the inner
envelopes are not opened but returned together with
all related documents to its bidder or its
representative who shall not be permitted to
participate in the tender. Prior to the opening of the
inner envelopes containing the proposals, all persons
related directly with the tender are asked to leave .
The envelopes are then opened in serial sequence ,
read aloud by the commission chairman or an assignee
and recorded as a list which is later signed by the
chairman and members. Non-complying or conditional
proposals shall not be accepted. Should more than one
bidder proposes the same price and all are determined
to comply written second proposals are requested from
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