Newsletter-21

106 NEWSLETTER 2016 company for the maintenance of the facility and the equipment and operation of the services. Payment of compensation in the event of termination of a project agreement is not mandatory under the PPP legislation. However, in practice, in order to enhance the credibility of the projects, the MoH may further undertake to pay compensation to the project company and/or to the funders of the project in the event of termination of the project agreement. In addition to the payment obligation of the MoH, the Law on Construction and Renewal of and Obtaining Service for Facilities by Public-Private Partnership Model by the MoH and Amendments to Certain Laws and Decrees with the Force of Law 5 (“PPP Law”) enables debt assumption of the Undersecretariat of Treasury for the outstanding debts of the MoH. It is stated under the PPP Law that upon occurrence of certain conditions, the Undersecretariat of Treas- ury 6 may undertake the outstanding debt of the project company of the healthcare PPP project, the investment and service amount of which is at least five hundred million Turkish Liras. Payment Capacity of the MoH As mentioned, the MoH, as the counter party of the project agree- ment, represents the State. Therefore, the abovementioned payments of the MoH under the project agreement also constitute the payment obligations of the State. The PPP Law requires the lease payments of the MoH to be made from the revolving capital budget allocated to the MoH and its affiliated institutions, and/or from the budget allocated to the central management. As per the Public Finances Management and Control Law 7 (“Public Finances Management Law”), the budget 5 Law on Construction and Renewal of and Obtaining Service for Facilities with Public-Private Partnership Model by the MoH and Amendments to Certain Laws and Decrees with the Force of Law under law no. 6428 published in official ga- zette dated 9 March 2013 and numbered 28582. 6 The Undersecretariat of Treasury has published a press release on 28 April 2014 and numbered 2014/70 and stated that the healthcare PPP projects that are already tendered will not be granted with the debt assumption. 7 Public Finances Management and Control Law under law no. 5018 published in official gazette dated 24 December 2003 and numbered 25326.