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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