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February 29, 2008
PUBLIC INVESTMENT PLANNING IN PUBLIC INVESTMENT PLANNING IN TURKEYTURKEY
T.R. Prime MinistryT.R. Prime MinistryState Planning Organization State Planning Organization
(SPO) (SPO)
M. Cüneyd DÜZYOL ([email protected])
DG for Economic Sectors and Co-ordination
22
ContentContent
National Development Planning in Turkey
Annual Program & Budget Preparation
Process
Public Investment Programming in Turkey
Project Cycle Management in Turkey
33
2000 2005 2006 2013 2007-2013
Increase
GDP, Billion $ 200 363,4 402,7 797,4 --
GDP Growth 7,4 7,4 6,1 -- 7,0
GDP per Capita, $ 2879 5042 5519 10099 9,9
GDP per Capita, PPP, $ 6819 8145 8577 15332 8,3
CPI Rise, Year-end 39,0 7,7 9,7 3,0 --
Fixed Capital Investment/GDP, % 22,4 19,6 21,0 24,2 9,1
Public 6,0 4,3 4,3 6,0 8,1
Private 16,4 15,3 16,7 18,2 9,4
Export (F.O.B), Billion $ 27,8 73,4 85,5 210 14,2
Import (C.I.F.), Billion $ 54,5 116,5 139,6 275 10,9
Tourism Revenue, Billion $ 7,6 18,2 16,9 36 9,3
Tax Burden/GDP, % 30,6 31,7 30,0 30,0 30,8
Employment, (Number in Millions) 21,6 22,0 22,3 26,9 2,7%
Unemployment Rate, % 6,5 10,3 9,9 7,7 --
Main Economic Indicators for TURKEYMain Economic Indicators for TURKEY
National Development Planning in National Development Planning in TurkeyTurkey
(1960), State Planning Organization (SPO) established (1961), Constitution adopts Development Planning as a
basic tool for economic, social and cultural development (1963-1967) 1. National Development plan (1968-1972) 2. National Development plan (1973-1977) 3. National Development plan (1979-1983) 4. National Development plan (1985-1989) 5. National Development plan (1990-1994) 6. National Development plan (1996-2000) 7. National Development plan (2001-2005) 8. National Development Plan (2007-2013) 9. National Development Plan
A Brief HistoryA Brief History
66
Composed of four main bodies ; Undersecretariat of State Planning Organization (SPO) Secretariat for High Planning Council (HPC) Secretariat for Economic and Social Council (ESC) Secretariat for Money, Credit and Coordination Council (MCCC)
Undersecreteriat of State Planning Organization (SPO) mainly; Advises the Government on economic, social and cultural development
policies Develops macroeconomic, sectoral, regional policies and strategies Prepares Development Plans & Annual Programs Draws investment strategies & Prepare Public Investment Programs Monitors, co-ordinates and evaluates implementation of development
plans and annual programs Co-ordinates and monitor activities of line ministries & public institutions Prepares regional develeopment plans and projects Co-ordinates and guides institutional strategic planning initiatives Draws general policy framework for the State Aid Schemes Coordinates EU-Instrument for Pre-Accession Assistance (IPA)
Components III and IV namely Regional Development & Human Resources Development
State Planning Organization (SPO)State Planning Organization (SPO)
77
ORGANIZATION CHART FOR UNDERSECRETARIAT OF SPO
Undersecretary
Deputy Undersecretary
DeputyUndersecretary
Deputy Undersecretay
DG Annual Programmes & Conjuncture
DG Economic Modelling and
Strategic Research
Budget and Local Administrations
State Economic Enterprises
Economic Modelling
DG EuropeanUnion
Relations
DG Economic Sectors and Coordination
DG Social Sectors and Coordination
Strategic Planning
DG Foreign Economic Relations
Agriculture
Infrastructure and Services
EU Policies
Human Resources
Development
KnowledgeSociety
Industry
Social and Phisical
Infrastructure
Project and Investment
Analysis
Social andTechnological
Research
EU Cohesion
Social Policies
Legal and Institutional
Arrangements
Secretary General
Deputy Secretary General
Conjuncture
PublicRelations Dept.
Administrative and
Finance Dept.
Personnel Dept.
Regional Development
Bilateral Relations
Advisors
DG Regional Development
Monitoring and Evaluation
Multilateral Relations
Priority Development
Regions
Legal Advisor
Management Info System Secretariat for Councils
ORGANIZATION CHART FOR UNDERSECRETARIAT OF SPO
Undersecretary
Deputy Undersecretary
DeputyUndersecretary
Deputy Undersecretay
DG Annual Programmes & Conjuncture
DG Economic Modelling and
Strategic Research
Budget and Local Administrations
State Economic Enterprises
Economic Modelling
DG EuropeanUnion
Relations
DG Economic Sectors and Coordination
DG Social Sectors and Coordination
Strategic Planning
DG Foreign Economic Relations
Agriculture
Infrastructure and Services
EU Policies
Human Resources
Development
KnowledgeSociety
Industry
Social and Phisical
Infrastructure
Project and Investment
Analysis
Social andTechnological
Research
EU Cohesion
Social Policies
Legal and Institutional
Arrangements
Secretary General
Deputy Secretary General
Conjuncture
PublicRelations Dept.
Administrative and
Finance Dept.
Personnel Dept.
Regional Development
Bilateral Relations
Advisors
DG Regional Development
Monitoring and Evaluation
Multilateral Relations
Priority Development
Regions
Legal Advisor
Management Info System Secretariat for Councils
88
Inter-ministerial coordination and decision-making body
Chaired by Prime Minister
Undersecretariat of SPO provides secretarial services
Seven line ministers managing large investment portfolios appointed by Prime Minister & Undersecretary of the SPO are members
Chairman can invite ministers and bureaucrats depending on topics,
Provides assistance to the Council of Ministers in determining policy targets and planning of economic, social and cultural development
Examines and approves development plans and annual programs
Approves sectoral strategy documents
Takes high level decisions concerning economic matters
High Planning Council (HPC)High Planning Council (HPC)
Main Stakeholders / Partners having roles in Main Stakeholders / Partners having roles in Development Plan Preparations Development Plan Preparations
Grand National Assembly (TGNA)
Government : Council of Ministers
High Planning Council (HPC)
Undersecretariat of State Planning Organization
(SPO)
Line Ministries and Public Institutions
Universities
Private Sector
NGOs etc.
1010
Government(Council of Ministers)
Markets (Sectors)
Line Ministries & Public Institutions
Undersecretariat of SPO
Consumers
High Planning Council
State Planning Org.
TGNA
Basic Relationships in Decision-Making Basic Relationships in Decision-Making ProcessProcess
Universities & NGOs
Basic Characteristics of Basic Characteristics of National Development Plans in TurkeyNational Development Plans in Turkey
Comprehensive Participatory (ad-hoc committees) Compulsory for Public Sector Indicative for Private Sector and NGOs Five-Year Perspective (7 year for 9.National Development
Plan (2007-2013) in line with EU Accession Target Non-Rolling Medium and long-term strategic objectives and priorities
under thematic development axes, Guides all macroeconomic, sectoral and regional policies
and implementations Sets the general framework of economic, social and
regional indicative targets, Coordinated by SPO Turkish Grand National Assembly approves
Steps of Development Plan PreparationsSteps of Development Plan Preparations
1. Formation of Ad-Hoc Commities & Data Collection,
2. Preparation of Plan Strategy Draft by SPO and Submission to HPC
3. Approval of Draft Strategy by HPC
4. Approval of Strategy by Council of Ministers,
5. Preparation of National Development Plan Draft by SPO consistent
with Strategy and submission to HPC,
6. Discussions and approval of Draft Plan by HPC
7. Submission of Draft Plan to TGNA after approval of Council of Ministers
8. Discussions in Planning & Bugdetting Commission of TGNA
9. Enactment of Development Plan by the decision of TGNA
Phases of Planning Process in Turkey Phases of Planning Process in Turkey •Analysis of basic macroeconomic & socio-economic data•Identification of basic macroeconomic policies & targets•Analysis of international developments (trade etc.)•Identification of Development Policies and Strategies •Macroecomomic Modelling Studies•Estimation of Macroeconomic Aggregates
Macro
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•Collection & Analysis of Sectoral Data•Analysis of production potential & market analysis•Sector Analysis and Master Plan Studies•Sectoral/sub-sectoral and Investment Priorities•Identificaton of sector policies, targets & sector investments•Linkage with regional development concerns
•Investment priorities and volumes by sub-sectors•Project Opportunity Studies•Identification of Alternative Project Ideas•Pre-Feasibility Studies : Cost Benefit Analysis•Feasibility Studies : Detailed Cost Benefit Analysis
Secto
ral
Pla
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Secto
ral
Pla
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Pro
ject
Pla
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Pro
ject
Pla
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National Development Plan
Top
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-Up
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Macro PlanningMacro Planning
Collection of main ecomomic & socio-economic data and analysis,
Identification of basic development strategies, Identification of basic economic and socio-economic targets,
policies and priorities, Macroeconomic Modelling Studies, Estimation of macroeconomic aggregates like consumption,
savings, investments, exports, imports etc. consistent with targetted economic growth,
Resources-Expenditures Balance, Financial Balance and Balance of Payments
Draft macro policy set in parallel with own features of the country such as natural resources, growth potential, development strategy and political preferences etc.
Identification of Annual and Medium Term macroeconomic aggrregates based on long term development strategy
Sectoral PlanningSectoral Planning
Definition of sectors/sub-sectors and their scope
Analysis of current situation & development potential in
sectors/sub sectors
Sector Analysis: Identification of Targets, Policies & Priorities
Preparation of sectoral plans and programs in order to reach
economic, social and phisical targets.
Establishment of the necessary links among national, sectoral,
regional development policies and public investment policies
Breakdown of investments by sectors
Identification of investment priorities in the sector
Implementation tool for Plan & Program policies and objectives
Investment Planning : Budget projections, Investment projections by sectors and institutions
Investment Opportunity Studies
Pre-Feasibility Studies & Feasibility StudiesSupply & Demand AnalysisChoice of Technology, Capacity and PlaceFixed Capital InvestmentOperation Revenues & Expenditures Financial Cost Benefit AnalysisEconomic Cost Benefit AnalysisEnvironmental Analysis based on EIAInstitutional Analysis
Investment Planning : Project Planning Investment Planning : Project Planning
Annual Program and Budget Annual Program and Budget Preparation ProcessPreparation Process
1818
Development Plan
MTFPMedium Term Program
Annual Program
Public Investment Program
Budget
Regional Dev. Plans
Sector Strategies
Provincial Dev. Plans
Inst. Strategic Plans
Preaccession Econ. Prog.
National Program
Cohesion Strat. Framework
Hierarchy of Policy Documents and Hierarchy of Policy Documents and Place of Public Investment ProgramPlace of Public Investment Program
Long Term Strategy
Operational Programs
Government Program
1919
Publication of Public Investment Program (In two weeks after New Fiscal Year starts)
OVP(DPT) (Mayıs Sonu), OVMP (Maliye Bak.) ( 15 Haziran )
Bütçe Çağrısı (Maliye Bakanlığı) ( Haziran Sonu )
Bütçe Hazırlama Rehberi (Maliye Bakanlığı)( Haziran sonu )
Yatırım Programı Hazırlama Rehberi (DPT)( Haziran Sonu )
Bütçe ve Yatırım Programı Teklifleri (Temmuz Sonu)
Bütçe ve Yatırım Görüşmeleri ( DPT, Maliye, Kuruluş )
( Eylül )
Taslak makro ve kamu bütçe büyüklüklerinin son hale getirilmesi
( Eylül sonu )
Yılı Program Kararnamesi ve Yılı Programının Resmi Gazete’de yayımlanması
( Ekim )
Bütçenin TBMM’de kabulü ve Resmi Gazete’de yayımı ( Mali Yılbaşından önce)
Taslakların YPK’ya sunulması ve YPK’da görüşülmesi
( Ekim’in ilk haftası )
Bütçe Tasarısının TBMM’ye sunulması ( 17 Ekim )
Programming and Budgetting ProcessProgramming and Budgetting Process
Medium Term Program (SPO) (End May), Medium Term Fiscal Plan (MoF) ( June 15)
Budget Call (Ministry of Finance) ( End June )
Budget Preparation Guidelines (MoF)( End June )
Investment Prog. Prep. Guidelines (SPO)( End June )
Budget and Investment Program Proposals from Public Institutions ( End July )
Program, Budget and Investment Negotiations ( SPO, MoF, Institutions )
( September )
Finalization of Draft Macro and budget aggregates
( End September )
Issuing Decree on Implementation, Coordination and Monitoring of Annual
Program and Annual Program ( October) )
Budget Approval by TGNA( Before new fiscal year starts)
Discussions in High Planning Council and Approval of Macro & Budget
Aggregates ( First Week of October)
Submission of Budget Draft to TGNA (October 17 )
Public Investment ProgrammingPublic Investment Programming
2121
Indicative Public Investment Policies & Priorities and aggregate investment ceiling in MTP
Indicative Investment Ceilings by sectors & instiutions in MTFP Budget Call & Guidelines for Budget Preparation (MoF) Investment Call & Guidelines for Investment Program
Preparation (SPO) Investment Program Proposals from Public Institutions Public investment policies and priorities consistent with
development policies set in Annual Program Sectoral & Institutional Investment Ceilings approved by HPC Budget Draft including investments sent to TGNA by Council of
Ministers Enactment of Bugdet Law in TGNA Public Investment Program on project basis consistent with
sector & intitution ceilings
Basic Steps of Public Investment ProgrammingBasic Steps of Public Investment Programming
2222
Consists of “Fixed Capital Investment Projects” in the form of ;
New projectsExtension projectsMaintenance & Operation Projects Completion ProjectsBottleneck Elimination ProjectsModernization and Rehabilitation Projects
in the following sectors.
Public Investment ProgramPublic Investment Program
2323
Agriculture Irrigation Agricultural Production Live stock Fisheries ForestryMiningManufacturingEnergyTransportation Highways Airways Maritime Railways PipelinesCommunicationsTourismHousingEducation Primary and Secondary
Education Vocational and Technical
Education Higher Education, Culture, Sports
Sectors for public investmentsSectors for public investments
I. HealthK. Other Public Services
General Administration Security Services Cadastra & Mapping
Potable Water Sewerage Rural Area Planning Municipal Services Resettlement and
Urbanization Environment Artisans and SMEs Technological Research Social Services and Aid Disaster Management
2424
Agriculture Dams, Irrigation Channels, Flood Control Structures, Fishery Ports, Forest Structures etc.
Energy Power Plants, Transmission & Distribution Grids
Transportation Highways: Dual Carriage Ways, Motorways, Bridges, Viaducts etc.Railways: Infra & Super Structure, Train Sets etc. Maritime: Ports, Waterbreaks, Shipyards etc. Airways: Airports, Terminal Buildings, Aircraft Fleets etc.Urban Transport: Metro & Light Rail Systems etc.Pipelines : Transmission and Distribution Lines, Natural gas Storage Facilities, Compressor Stations etc.
Tourism Infrastructure for Touristic Regions
Education Schools , University Campuses, Faculties, Cultural Centers, Libraries, Sports Facilities, Machinery-Equipment etc.
Health Hospitals and other Health Facilities etc.
Urban Infrastructure
Potable Water, Sewerage, Waste Water Collection Systems and Solid Waste Storage Facilities etc.
Other Public Services
Security & Justice Buildings, Prisons, Public Service Buildings etc.
Basic Investments for Fixed Capital FormationBasic Investments for Fixed Capital Formation
2525
General & Special Budget Institutions (Ministries, Universities, State Highways, State Hydrolic etc.)
State Economic Enterprises (SEEs) (State Railways, etc.) State Economic Enterprises under Privatization (TEDAŞ, TEKEL
etc.) Revolving Funds & Social Security Institutions (TRT,Social
Security Inst. Etc.)) Bank of Provinces Local Administrations (only foreign credit financed projects) Independent Regulatory Bodies (for monitoring purpose)
Public Investing InstitutionsPublic Investing Institutions
Investments not included in Investment Investments not included in Investment ProgramProgram
Defence Projects of Ministry of National Defence & Armed Forces
Projects implemented by own resources of Local Administrations
Projects of Public Banks Other institutions established by special laws (Türk
Telekom etc.)
2626
Basic Characteristics of Public Investment Basic Characteristics of Public Investment ProgramProgram
Top-Down & Bottom-Up Aprroach is used for decision of aggregate level of investments
Focuses on basic economic and social infrastructure Investment decisions are often taken on project basis
consistent with sector policies, very limited regional development concerns
Limited budget resources and always need for additional financing
Number of projects are high compared to budgetary financial resources available
Limited number of new projects initiated each year especially after rationalization of the stock in 2001
Average completion time of the existing project pipeline (stock) is around 6 years
Around 20 percent of annual investment allocation is from foreign credit financing
2727
2000 2001
2002 2003
2004
2005
2006
2007
2008
Number of projects
5.321 5.047 4.414
3.581
3.555 2.627 2.525 2.710
2.759
Total project cost
150,4 147,3 92,6 105,7
122,3 128,2 141,3 135,9
158,9
Cum.Expend as of
previous year
104,9 100,0 56,0 60,3 68,1 76,1 80,3 75,2 84,6
RemainingStock
45,5 47,3 36,6 45,4 54,1 52,1 61,0 60,7 74,3
Program allocatıon
10,3 9,7 5,9 7,1 7,5 10,0 12,5 11,1 12,4
Ave. Completion time (years)
(2)
9,2 9,4 8,5 7,6 8,1 6,6 5,5 5,8 5,8
(At Current Prices, Billion USD)
Public Fixed Capital Investment Stock (2000-Public Fixed Capital Investment Stock (2000-2008)2008)
(1) Excludes investments of local administrations, expenditures for exproprations and inverstment workers payments.
(2) Average time of completion is calculated as the amount of time required to finish up the remaining stock completely, assuming that no other projects are taken into the investment program in the following years and an appropriation and expenditure is made of the magnitude of the current year level.
2828
Million $ % Share Million $ % Share Million $ % ShareAgriculture 948 7,7 3.507 11,8 11.916 10,2Mining 441 3,6 794 2,7 3.803 3,3Manufacturing 307 2,5 118 0,4 1.046 0,9Energy 1.744 14,2 1.804 6 12.241 10,5Transport-Communication 3.913 31,8 7.644 25,6 30.361 26Tourism 33 0,3 138 0,5 530 0,5
Housing 75 0,6 271 0,9 903 0,8
Education 1.720 14 6.541 21,9 22.348 19,1
Health 874 7,1 2.576 8,6 9.857 8,4
Other Services 2.237 18,2 6.429 21,6 23.887 20,4
-Economic 1.192 9,7 2.919 9,8 10.775 9,2
-Social 1.045 8,5 3.510 11,8 13.112 11,2
Total 12.292 100 29.823 100 116.893 100
Investment Operation 1.699 2.704 13.228
Local Administrations 7.372 15.461 73.059
Total Sum 21.364 47.987 203.180
Sectors2006 (Current Prices) 2013 (Current Prices) 2007-2013 (2006 Prices)
Public Investments in 9. Dev. Plan Period (2007-Public Investments in 9. Dev. Plan Period (2007-2013)2013)
2929
Share of Investments in GDP (%)Share of Investments in GDP (%)
Project Cycle Management in TurkeyProject Cycle Management in Turkey
Project CycleProject Cycle
INDICATIVE INDICATIVE PROGRAMMINGPROGRAMMING
PROJECT PROJECT IMPLEMENTATIONIMPLEMENTATION
PROJECT PROJECT IDENTIFICATION & IDENTIFICATION &
PREPARATIONPREPARATION
PROJECT APPRAISALPROJECT APPRAISAL
PROJECT FINANCINGPROJECT FINANCING
MONITORING & MONITORING & EVALUATIONEVALUATION
3232
Indicative ProgrammingIndicative Programming
Investment Policies & Strategies and Priorities stated in the following
official policy documents in different levels :
National Development Plan Medium Term Program Annual Program Annual Investment Circular and Guidelines for Public
Investment Program Preparations
3333
Project IdentificationProject Identification
Sources for project ideas are diverse
(National Development Plan, Annual Programs, Sector and thematic Strategy Documents, Master Plans, Opportunity Studies, Regional Dev. Plans, Local Administrations, Politicians, Line Ministries, EU Accession Process, Int. Development Institutions etc.)
Spontaneous demands and pressures from local politicians
Pre-selection of project ideas not possible, creates a public support behind, not easy to stop
Methodology for project development is not systematic Insufficient participatory mechanisms and technigues for
development of project ideas
3434
Project Preparation : Feasibility StudyProject Preparation : Feasibility Study
Feasibilty studies prepared by investing institutions or outsourced
Public Financial Management and Control Low and Investment Circulars reguires a sound feasibility study consisting of financial, economic and environmental analysis for public finance
SPO gives a standart format for feasibility studies in the Guidelines for Investment Program Preparations
Tendency to use external consultants is low Data and analysis quality of feasibility studies are low,
International standarts are often neglected Unrealistic cost & completion time estimates Preparation facilities and capacities in investing
institutions are quite insufficient Preparation process is seen as time consuming bureucratic
procedure Environmental analysis based EIA is often disregarded or
underestimated Budget restrictions are often neglected during
preparations
3535
Project AppraisalProject Appraisal
Project appraisal carried out in two levels : Institutional level and SPO level
Limited capacity of project appraisal in line ministries and public institutions,
Relativelly sufficient capacity in SPO but often blocked by low quality feasiblity reports lacking sound data and analysis
In-house units within SPO responsible for appraisal of feasibility studies
Lack of national parameters and data for economic analysis
Environmental analysis based EIA is often neglected or underestimated
Lack of standart appraisal procedures implemented
Opportunity cost considerations are often not taken into account
3636
National Bugdet Foreign Credit Grant Schemes PPP Models
Need for additional investment financing Faster implementation Reduced operation & construction costs Transfer of managerial skills Currently airport terminals, ports, dams, HEPPs etc. realized Current PPP Models in Turkey has limited scope (BOT, BO,
BLT,TOR) Lack of Harmonisation among several sector specific laws Lack of Central Administrative Structure for PPP Projects
New PPP Frame Law drafted by SPO; Unifies the PPP legislation Sets the legal basis for additional PPP models Sets the legal basis for extending sectoral scope Brings a rational and objective project selection procedure Establishes a central PPP unit within SPO Sets the principles of risk management for PPP projects
Project FinancingProject Financing
3737
Project ImplementationProject Implementation
Responsibility of Line Ministries and Public Institutions
Lack of modern project implementation approaches and mechanism
Insufficient implementation capacity (bidding documents,TOR Writing, controlling services etc.)
Insufficient experience on International Bidding Procedures (International Financial Institutions)
Insufficient institutional capacity in terms of skilled personnel
Capacity problems in Legal Contract Management
Need for improving negotiation skills
3838
Project Monitoring & EvaluationProject Monitoring & Evaluation
Responsibility of Public Institutions and SPO Very limited capacity in public institutions In-house unit within SPO responsible for project
monitoring
and evaluation On-going project monitoring & evaluation is carried out
on expenditure basis not in physical terms Lack of experience on ex-post evaluation causing
problems in iterating new projects Monitoring & Evaluation activities are not systematic Need for further improvement of on-going project
monitoring & evaluation capacity both in SPO and public institutions
Capacity that should to be created in terms of ex-post evaluation is vital