An evaluation of using infrastructure investment trusts for financing public investments and infrastructure investments

Countries affect each other in economic, cultural and social areas very quickly. 30-35 years ago, not only distant countries even neighbouring countries were visiting each other with a heavy difficulty. Now, many countries and the people living those can communicate through Internet from their houses. Those communication means, communication with the press and economic and social events (globalization) affect our country, too.The global crisis surrounding whole world has negatively imposed all countries in terms of economy. Some countries? economies have been incurred partially, while some countries have been incurred severe losses that could be sensed deeply.As our country before economic crisis underwent for allocating a reserve from the budget for infrastructural investment, in the setting budgets only 3-4% rate could be allocated for the investment. The governments have been searched for alternative resources financing infrastructural investments.Till today, apart from budget resource alternative resources like treasury bills, bonds, foreign credit and revenue partnership certificates have been used for infrastructural investments. Public-Private Sector Cooperation Models using intensively for financing infrastructural investments in many countries have been also applied in our country.In parallel with the population growth, urbanization, globalization and industrialisation in our country and the other developing countries, in recent years there has been substantially increase in the infrastructure services and investments providing by both central administrations and local administrations. Large amounts of financial resources are required for facilities and services chiefly regarding energy, communication, transportation and water- sewerage sectors.As infrastructural investments have been started with Public-Private Sector Cooperation Models, new law and directives have been enacted in order to overcome the problems facing in the contracts for those issues. In order to promote foreign investors together with arbitration law making a number of legislative arrangements to some law foreign investors firms have been promoted for making infrastructural investmentsWith the communiqué prepared by Capital Market Boards of Turkey in 2008 and made draft, it has been tired to clarify for the matters for the establishment, management and issuing share and loan of Infrastructure Investment Partnerships and their audits, however up to now the communiqué has been unable to go beyond being draft.It is allowed that the some shares of partnership (49%) established with this communiqué would be sold to new investors or public offering. With this it is aimed that primary and secondary market would be formed by spreading over the base of capital market. Thus, the capital market would be strengthened by spreading over the grassroots.The level of the certain conditions has been gone down in order to promote infrastructure investment partnership and the partnership which would be established by central government and local administrations. Moreover, Cabinet decree regarding how many shares and loans would be issued by those partnerships published in 2009.The promulgation of draft communiqué prepared for restructuring the Infrastructure Investment Partnerships as authentic communiqué could be eliminated the uncertainties that investors face with. Capital Markets Board of Turkey has discontinued broadcasting the draft notification about infrastructure investment partnerships establishments and operations maybe to overview or fundamentally change, but there has not been an explanation about the issue at the web site as of the date of June 2010.With regard to Public-Private Sector Cooperation applications and the appropriation and specialization in project, planning, specifications, tender, contract, application and operating of the infrastructures, the establishment of an Authority is absolutely needed.