Financial Transfers to TCDD Directorate General from th U d t i t fT

Financial Transfers to TCDD Directorate General from th U d t i t fT

Financial Transfers to TCDD Directorate General from
th Undersecretariat
the
U d
t i t off Treasury
T
Sefa Pamuksuz
Director General
St t O
State
Owned
d Enterprises
E t
i
Directorate General
Undersecretariat of Treasury
OUTLINE
 Financial
Transfers to TCDD Directorate General
from the Undersecretariat of Treasury
 Deduction
 External
Transactions
Loans Used by TCDD Directorate General
by way of Undersecretariat of Treasury
Financial Transfers to TCDD
Directorate General

With regard to TCDD Directorate General, the
State-Owned
State
Owned Enterprises Directorate General of
Undersecretariat of Treasury is charged with;
- transferring resources to the company
through capital transfers,
- finance the duty losses through the transfer
of funds allocated for this purpose to the budget,
budget
- program and supervise the annual budget
of the company
Financial Transfers to TCDD
Directorate General
Legal Arrangements

Decree in the force of Law No. 233
•
Article 37: The investment expenditures
and operational financing deficits of SOEs
shall be financed by the Undersecretariat
of Treasury.
Treasury
Financial Transfers to TCDD
Directorate General
A) Capital Payments
Undersecretariat of Treasury is transferring
capital to TCDD Directorate General pursuant
to Decree in the Force of Law No. 233.
 Transfers are done to cover the company’s
personnel payments, social security
expenditures and investment expenditures.

Financial Transfers to TCDD
Directorate General
B) D
Duty
t L
Loss P
Payments
t

Pursuant to Article 35 of Decree in the Force of Law No. 233,
through Council of Ministers decision
decision, duties may be assigned to
SOEs so that they can provide public services or the prices of
services they provide can be determined by observing public good.

In case the prices of services provided by SOEs are determined
through Council of Ministers Decree, if the prices have been set
below the cost of service, the amount of duty loss determined by
g to the amount of loss a 10% share of p
profit deprived,
p
,
adding
calculated over the sales cost of the service, is transferred to the
enterprise through allocation of funds in the budget.

According to the Annual Budget Law
Law, duty loss payments can be
made as advance.
DUTY LOSS FUNCTIONING MECHANISM
Council of Ministers
BKK
Decision
Duties
assigned
to SOEs
233 are
sayılı
KHK'nin
35. regarding
Maddesi
çerçevesinde
yayımlanan
BKK ofile
their
field of activity
through Council
KİT''lere
faaliyet
konuları
ile ilgili
Ministers
Decision
issued
pursuant
to
görev verilir
Article 35 of Decree No. 233
SOE
KİT
Verilen
The
duty
getirilir
KİT tarafından
isgörev
performed
by SOE
MAHSUP
Deduction
yerine
If the Duty Loss allocation request proposed for
th Bütçeye
the
b
budget
d t teklif
iis nott accepted
d , th
the
d
default
f lttalebi
d
debt
bt off
edilen t GZ
ödenek
SOE
to the
Treasury
and the 233
duty sayılı
loss KHK
kabul
edilmediği
takdirde,
kapsamında
Hazine'ye
receivable
may beKİT'in
set off under
Decree olan
no.
temettü
borcu
ile GZ alacağı
mahsup
233.
Furthermore,
the related
SOE has
edilebilir.
Ayrıca, if ilgili
KİT'in hazine
devirli
kredi borcu varsa, loan
söz debt,
konusu
borç and
ile
Treasury-transferred
that debt
GZ alacağı
mahsuba
konu
duty
loss
receivable
may
be
set
off. edilebilir;
However,
ancak
bu
işlemin
yapılabilmesi
için
authorization
a legal
çıkarılacak isbirneeded
Kanun through
maddesi
ile provision
yetki
in alınması
order togerekmektedir.
be able to carry out these
transactions.
Performance of
GÖREVİN
Duty
İFASI
Görevin
yerine with
getirilmesi
ile Görev
Duty
loss accrues
the fulfillment
of
Zararı tahakkuk etmiş olur
duty
Accrual
of
GZ
TAHAKKUKU
Duty Loss
Tahakkuk
eden
Görev
Zararı
NAKTİ
Cash
ÖDEME
Payment
tutarı,
Payment is made to the related SOE within
konulan
ödenek allocation.
çerçevesinde
theBütçeye
framework
of the budget
ilgili KİT'e ödeme yapılır.
mahrum
kalınan
%10 kar
ilave
The
amount
of accrued
dutypayı
lossda
is claimed
edilerek
ilgili
KİT
tarafından
from
the Treasury
by talep
the
related
SOE,
with
Hazine'den
edilir.
the addition of a 10% deprived share of
profit
DutyGZLoss
TALEBİ
Request
Budger
BÜTÇE
Duty Loss allocation is proposed for inclusion
Kesinleştirilen
tutar üzerinden
ilgili mali
in the
year
budget, teklif
on theedilir.
basis
yıl related
bütçesinefiscalGZ
ödeneği
Önceden
ödemesi
yaplımış
ise,
of the
finalizedavans
amount.
amount
If advance
payment
ödeme
kesinleştirilmiş
GZ
hasyapılan
been
made,
allocation
shall
be
proposed
tutarından
düşülerek
ödenek
teklifinde
by bulunulur
deducting the amount paid from the final
DL amount .
TheGörev
requestzararı
for dutytalebi
loss is kesinleştirilmek
reviewed by the
üzere inspector
ilgili Bakanlık
müfettişi
ve Hazine
Ministry
and the
Treasury
Müsteşarlığı
Hazine
Controllers
Board
(HKK)
of the Kontrolörleri
Kurulu
Başkanılğı'nca
(HKK)
Undersecretariat
of
Treasury,
for
finalization.
müştereken incelenir
TreasuryHKK
Controllers
Board
Without waiting for the finalization of duty loss
İlgili kuruluş
tarafından
talep SOE,
edilenthrough
GZ
amount
requested
by the related
HKK raporu ile kesinleştirilmesi
thetutarının
HKK report,
ifilgili
the related
SOE
hasihtiyacı
cash
beklenmeden
KİT'in
nakit
need
and
to
the
extent
budget
capacity
allows,
olması
durumunda
ve bütçe
imkanları
çerçevesinde
KİTcan
GMbetarafından
Kuruluşa
duty
loss payment
made to the
SOE in
avans
mahiyetinde
GZ
ödemesi
theyyapılabilir.
form
of advance,
the SOE
Directorate
p
((Avans by
olarak
ödenen
görev
g
General
zararı (in
ile case
HKKof any
raporu
difference
ile kesinleştirilen
between the
tutar
arasında
bir fark and
ortaya
çıkarsa
advance
duty loss payment
the amount
taraflar
ödeme
yükümlülüklerini
yerine
finalized
getirirler.)by HKK report, parties fulfill their
payment obligations)
GZ'NIN
Finalization
KESİNLEŞMESİ
of
Duty Loss
The duty loss amount to be taken as a basis
Görev
zararı
talebinin
ilgili Bakanlık
for
payment becomes
final with
the report
müfettişi
ve
Hazine
Kontrolü
ile
müştereken
incelenmesi
sonucu
prepared
as a res
result
lt of the joint re
review
ie of d
duty
t
düzenlenen
rapor ile ödemeye esas GZ
loss
request,
by
the
related
Ministry
inspector
tutarı kesinleştirilmiş olur.
and Treasury controller.
Advance
AVANS
Payment
ÖDEMESİ
Financial Transfers to TCDD
Directorate General

The legal basis of duty loss payments to TCDD Directorate General
is the Council of Ministers Decision no. 1989/14558.

The losses suffered by the enterprise due to the operation of;
12 non-economical lines,
• Eastern, Southern and Lake Van Express Trains,
• Lake Van Ferry
•
as determined by the referred Council of Ministers Decision, plus the
10% deprived share of profit , is covered from the duty loss line item
allocated in the budget every year.
CAPITAL TRANSFERS AND DUTY LOSS PAYMENTS TO TCDD
DIRECTORATE GENERAL FROM THE BUDGET BETWEEN 2005
20052009, AND THE DEDUCTION TRANSACTIONS CARRIED OUT
TOTAL RESOURCES TRANSFERRED TO THE ENTERPRISE BETWEEN 2005 and 2009 ((Million TL))
Capital
2005
2006
2007
2008
2009 (4)
483
190
673
1.249
300
441
258
1.507
1.100
76
283
200
1.300
58 (3)
766
1.439
1.507
1.358
1.339
458
304
309
1.648
335(3)
271
2.254
1.119
200
367
318
1.437
275 (5)
943
2.655
Investments
SGK Payments
P
t (2)
Duty Loss
Total
Deductions from Capital
Deductions from Road M&R Expenditures
p
Total Resources Transferred
(1)
(1) The year 2006 SGK payments include 202.060.000.- TL of past year payments.
(2) Funds were started to be transferred to the enterprise for SSK and Pension Fund payments (SGK payments as from 26 May 2006) and investment expenditures as from 2006.
(3) External debt deductions based on Provisional Article 10 of Law No.
No 4749 (gratuitous fund allocation in deduction of capital)
(4) Program
(5) Pursuant to Provisional Article 16 added to Law No. 4749, of the guaranteed external loan debts of the enterprise to the Treasury amounting to 1,218.6 Million TL
943 Million TL will be deducted from the enterprise’s receivables from the Ministry of Transportation for road maintenance and repair expenditures
and the balance 275.4 Million TL from its capital.
CAPITAL TRANSFERS AND DUTY LOSS PAYMENTS FROM THE BUDGET
BETWEEN 2005 and 2009 (Million TL)
2005
2006
2007
2008
2009
TCDD C
Capital
it l
483
1 249
1,249
1 100
1,100
1 339
1,339
1 119
1,119
TCDD Duty Loss
190
258
200
309
318
TCDD Total
673
1,507
1,300
1,648
1,437
Total SOE Capital Payments
891
1 917
1,917
1 611
1,611
2 042
2,042
2 564
2,564
54
65
68
66
44
522
711
700
1,234
2,856
36
36
29
25
11
1,413
2,628
2,311
3,276
5,420
34
48
48
41
21
% Share of TCDD in Total Capital Payments
Total SOE Duty Loss Payments
% Share of TCDD in Total Dutty
y Loss Payments
y
Total Amount of Budget Allocations
% Share of TCDD in Total Budget Allocations
Amounts of Investment Transfers to TCDD from the
Capital Budget between 2006 and 2009
Amounts of Investment Transfers to TCDD from the Capital Budget between 2006 and 2009 (Million TL)
Years
Years Investment Transfers
Investment Transfers 2006
300.00
2007
76.00
2008
458 00
458.00
2009
200.00
Total
1,034.00
* The amount of investment payments for 2009, as of September 2009.
Summary Financial Information of TCDD Directorate General (Million TL)
2005
2006
2007
2008
2009
354
414
324
288
253
2
71
82
131
148
Profit/Loss
-212
-504
-630
-812
-1.066
Primary Surplus
209
141
-186
311
-916
1.439
1.507
1.358
2.254
2.655
Port Revenues
Sales Reveneus of Tangible Assets
Total Resources Transferred
Financial Transfers to TCDD
Directorate General
Other financial transfers

Pursuant to Decree in the Force of Law No. 233
and the enterprise’s statute; funds are
transferred to TCDD Directorate General from
the line item allocated in the budget of Ministry
of Transportation for railway maintenance and
renovation works.
works
Financial Transfers to TCDD
Directorate General
 However
the amount of funds allocated in
the subject
j
line item of the Ministry’s
y
budget does not suffice for these
expenditures;
p
; therefore,, receivables of the
enterprise are accumulating every passing
yyear,, and theyy are set off against
g
the
enterprise’s tax debts and external loan
debts when legal
g arrangements
g
are made
to this effect.
Financial Transfers to TCDD
Directorate General
DEDUCTIONS FOR ROAD MAINTENANCE AND REPAIR EXPENDITURES (Million TL)
2005
Tax
SGK
248.2
518.2
2006
2007
2008
271.3
Treasury –Guaranteed Loan Debts *
Total
766.4
2009
271.3
943.1
943.1
* Pursuant to Provisional Article 16 added to Law No. 4749, of the guaranteed external loan debts of the enterprise to the Treasury amounting to 1,218.6 Million TL;
943 Million TL will be deducted from the enterprise’s receivables from the Ministry of Transportation for road maintenance and repair expenditures
and the balance 275.4 Million TL from its capital.
Use of External Loans by TCDD
Directorate General
 Undersecretariat
of Treasury acts as an
intermediary for TCDD Directorate
General to use external loans to finance
railway projects.
 In
order to be able to use a project loan,
that project has to be included in the
Annual Investment Program.
Use of External Loans by TCDD
Directorate General

Undersecretariat of Treasury becomes Borrower
or Guarantor in the use of external loans for
financing the projects of public agencies.

Pursuant to Law No. 4749, the Undersecretariat
off Treasury
T
has
h been
b
assigned
i
d th
the d
duty
t off
preparing and negotiating the external loan
agreements
g
under which it is a borrower or
guarantor.
Use of External Loans by TCDD
Directorate General
When providing external loans to TCDD
Di t t General,
Directorate
G
l the
th Undersecretariat
U d
t i t off
Treasury either directly borrows the loan and
transfers the loan p
proceeds to the enterprise,
p
, or
acts as a guarantor and the enterprise directly
becomes the borrower.
 These
Th
loan
l
amounts
t are disbursed
di b
d tto th
the
enterprise through sub-loans or transfer
agreements, or are transferred gratuitously
through special allocation.

Use of External Loans by TCDD
Directorate General
In case of sub-loan agreement, the Treasury
borrows the loan and transfers the loan
proceeds to the enterprise under the conditions
it determines itself.
 In the case of transfer agreements
agreements, the Treasury
transfers the loan proceeds to the enterprise
under
u
de tthe
e sa
same
e co
conditions
d t o s by which
c itt has
as
borrowed the loan.
 Between 2005 and 2009,, loans have been
disbursed to TCDD Directorate General under
sub-loan agreements and with special allocation.

Use of External Loans by TCDD
Directorate General
External Loans Used by TCDD Directorate General (Million USD)
USD Amount Allocation/Sub‐Loan PROGRAM / PROJECT
2005
Emergency Earthquake Assistance Loan Sub‐Loan Ankara‐Istanbul Railway Rehabilitation Project, Ankara‐Eskişehir Section 136
Railway Equipment Project
Railway Equipment Project
3
TCDD Restructuring Project Locomotive Parts Procurement Project
35
Total Sub‐Loan 174
32 Sets of Electrical Commuter Trains Procurement Allocation Ankara‐Istanbul Railway Rehabilitation Project, Ankara‐Eskişehir Section Ankara‐Istanbul
Ankara
Istanbul High
High‐Speed
Speed Railway Project (Ankara
Railway Project (Ankara‐Eskişehir
Eskişehir Section) Section)
Additional Finance Ankara‐Istanbul High‐Speed Railway Project (İnönü‐Vezirhan and Vezirhan‐
Köseköy Sections High‐Speed Train Sets Procurement ‐ 10 Sets Total Allocation GRAND TOTAL 174
Note: No guaranteed loan was used between 2005 and 2008 2006
2007
140
2
82
54
196
18
21
121
4
158
60
2008
32
70
12
114
25
23
127
41
41
40
263
48
223
236
384
337
2010-2012 Medium Term Program Figures of TCDD Directorate General (Million TL)
2010
2011
2012
2.187
2.250
2.300
326
339
359
Total Budget Expenditures
2.513
2.589
2.659
Investment Ceiling
2.477
2.583
2.664
Capital
Duty Loss
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