Public-Private Sector Partnerships Summit

01 Oct 2006

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International organizations, leading companies of the public sector, national and foreign investors and financers met in Ankara on 15-16 September, 2006 for the “International Public-Private Partnerships (PPP) Summit” to share their experiences in the area of public-private sector cooperations, and discussed the ways of developing sustainable partnerships.

New Horizons - In his opening speech, Finance Minister Kemal Unakıtan said, “By integrating their expertise, resources and know-how, public and private business cooperations increase efficiency and productivity. These partnerships also help lift the burden on the Turkish Treasury to a certain extent.”

The participants shared their legal, financial and technical expertise at the Summit, which was organized by Corporate Social Responsibility Association (CSRA), in collaboration with UNDP, the World Bank and UK Trade & Investment; and supported by related ministries and governmental organs of Turkey. Minister of Transportation Binali Yıldırım, World Bank’s Director in Turkey Andrew Vorking, UNDP Representative in Turkey Mahmood Ayub, CSRA’s President Serdar Dinler, British Consul-General to Istanbul Barbara Hay, President of the Privatization Administration Metin Kilci, Undersecretary of Finance İbrahim Çanakçı, and Undersecretary of the Ministry of Industry and Commerce Adem Şahin were among the conference speakers. The Summit was also attended by representatives from Turkish private sector companies which have declared their commitment to the 10 principles of the Global Compact, who discussed ethical business values and the role of corporate social responsibility in the betterment of the global community.

“I heartily support the role of private companies in undertaking public sector investments, without handing over public ownership”, said Finance Minister Kemal Unakıtan, adding that the PPP model can be especially instrumental in public infrastructure projects. Unakıtan also pointed out to the fact that developing countries need a source of nearly 500 billion dollars each year, to be able to meet their public infrastructure requirements, and that PPP businesses in Turkey, too, mainly operate in motorway, airport and railway constructions, and in public drinking water and solid waste infrastructure works.

“Global Compact Principles promote responsible corporate citizenship, so that businesses can be a part of the solution to the challenges of globalization.”

In his opening address to the Summit, UNDP Turkey Representative Mahmood Ayub stressed the role of the private sector in achieving the ‘Millennium Development Goals’ and in fulfilling the ‘Global Compact Principles’. Ayub said, “United Nations has long recognized the vital role of the private sector in contributing effectively to sustainable and equitable growth at the global and national levels. In the words of Secretary-General Kofi Annan: ‘In today's world, the private sector is the dominant engine of growth – the principal creator of value and managerial resources. If the private sector does not deliver economic growth and economic opportunity - equitable and sustainable - around the world, then peace will remain fragile and social justice a distant dream’. We, at UNDP, believe that the private sector has a critically important role to play, through its financial and technical support, in the achievement of the Millennium Development Goals. These goals, in their essence, commit to reducing poverty by half by 2015, while also addressing significant national and global shortcomings related to health, education, and environment. Importantly, the Millennium Development Goals also establish a framework for global partnerships and better harmonization of the efforts of governments, international organizations and private sector, recognizing the enormity of the challenge the goals present… (While) the Global Compact Principles seek to promote responsible corporate citizenship, so that businesses can be a part of the solution to the challenges of globalization.”

“Public-private sector partnership is a necessity, not a passing trend!”

Serdar Dinler, President of the Corporate Social Responsibility Association (which was one of the hosts of the Summit), said that they hoped this Summit would be a significant step in establishing the legal framework of public-private sector partnerships. “Public-private sector partnership is a necessity, not a passing trend,” Dinler emphasized, pointing out that public-private sector cooperation and social responsibility concepts could soon be exhausted, if they are applied without first building the essential legal infrastructure. “These practices must be implemented in such a way as to benefit the economy over the long term. And for that, a solid legal background should be established with the help of all social stakeholders”. Dinler also added that the Principles of UN’s Global Compact are a source of strong inspiration for national/local development projects and business partnerships in such generally neglected areas, as HIV/AIDS combat, access to clean water and sheltering problems of developing nations.

In his address to the Summit, World Bank’s Turkey Director Andrew Vorking elaborated on the benefits of PPPs and gave examples of their public infrastructure projects in Turkey. Vorking said in his closing remarks: “Turkey can easily and successfully implement many PPP models throughout its economy. Based on assessments of infrastructure and Turkey's favorable investment climate, there is significant opportunity for PPPs in all of the infrastructure sub-sectors—energy, water and wastewater companies and rail freight companies, as well as in some of the service sectors, including at the municipal level. Turkey's experience can set an example for both other emerging markets and the EU accession and pre-accession countries. PPPs are not the cure for all investment needs in Turkey or in other countries, but they are workable and successful model which have and can bring great benefits to the economy and to the population.”

Minister of Transportation Binali Yıldırım also gave numerous examples of the airport, seaport, yacht marina and railroad construction projects that have been successfully completed, and will soon be undertaken by public-private sector partnerships (PPPs) and build-operate-transfer (BOT) systems. Mr. Yıldırım added that, the State Planning Organization have more than 4,000 pending projects in hand, which could not be possibly realized for another couple of decades, given the present finances of the State budget. “Here comes the importance of public-private sector business partnerships”, Yıldırım said.

President of the Privatization Administration Metin Kilci, on the other hand, claimed that the ‘build-operate-transfer’ (BOT) system can not actually be portrayed as “successful” in Turkey, due to ‘lack of sound political, economic and legal legislations, mistakes made in the partnership agreement conditions, and the ill-balanced risk distribution between public and private sector companies.’ ”However”, Mr. Kilci added in his speech, “we’ve had several successful PPP projects in Turkey, including airport terminal constructions and service operations.”

U.K.’s Consul-General in Istanbul Barbara Hay was also among the speakers at the PPP Summit, who remarked that her country is looking forward to sharing their knowledge and experiences in public-private partnerships which have become very common and successful in U.K.

UN Secretary-General’s Special Advisor on the Global Compact, Prof. Klaus M. Leisinger,and the Head of International Strategy of International Financial Services London (IFSL), Stephan Harris were among the participants at this Summit.