Turkey - Public Sector Industrial Credit Loan Project

Document of The World Bank FOR OFFICAUL USE ONLY . Repot No. 4922 PROJECT COMPLETION REPORT TURKEY - FIRST DEVLET YATIRrM BANKASI PROJECT (LOAN 1024-TU) February 10, 1984 Europe, Middle East and North Africa Region Projects Department Thk doxnt is a restricted distibuion ad may be umd by recpints only in Mue pefonasce of their offiia dudes Its coatents nmy not otherwie be died without World Bank athorintion.  ABBREVIATIONS DYB Devlet Yatirim Bankasi OECD Organization for Economic Cooperation and Development SEE State Economic Enterprise SPO State Planning Organization UNDP United Nations Development Program EXCHANGE RATES Date Rate (US$ 1.00) December 31, 1973 TL 13.50 December 31, 1974 TL 13.90 December 31, 1975 TL 14.45 December 31, 1976 TL 16.05 September 1977 - March 1978 TL 19.45 December 31, 1979 TL 47.10 December 31, 1980 TL 91.75 December 31, 1981 TL 133.63 December 31, 1982 TL 184.90 May 31, 1983 TL 210.00 FINANCIAL YEAR. January 1 - December 31  FOR OMFCIAL USE ONLY PROJECT COMPLETION REPORT TURKEY - FIRST DEVLET YATIRIM BANKASI PROJECT (LOAN 1024-TU) TABLE OF CONTENTS Page No. Preface i Basic Data Sheet ii Highlights I. Introduction 1 A. Background 1 B. Sectoral Context 1 C. DYBz The Institution and its Role 2 D. Loan Features 3 II. Objectives 3 III. Attainment of Objectives 5 A. Institutional Objectives 5 B. Subprojects 6 C. Follow-on Projects 6 IV. Subprojects Financed 7 A. Description 7 B. Performance 7 C. Quality of Appraisal and Supervision 8 V. DYB: Operational and Financial Performance 8 A. Loan Operations 8 B. Operational Results and Financial Position 9 IV. Conclusions 10 r document has a restrictd distribution ad may be used by recipients only in the performance of I their official duties. Its contents may not otherwise be discosed without World Bank authorization.  - i - PROJECT COMPLETION REPORT TURKEY - FIRST DEVLET YATIRIM BANKASI PROJECT (LOAN 1024-TU) PREFACE This report reviews the implementation experience under Loan No. 1024-TU made by the Bank to Devlet Yatirim Bankasi (State Investment Bank) under the guarantee of the Republic of Turkey. The loan was approved in June 1974 ard was fully disbursed by March 31, 1981, with a delay of abo-Lt two years. The Bank extended two additional loans to DYB (Nos. 1379-TU and 1998-TU) in 1977 and 1981, respectively. The report focuses on DYB' role in the system of financing public sector investment projects in Turkey and the experience of the Bank's efforts in bringing about improvements in the resource allocation process. Another aspect examined in the report is DYB's role in monitoring subproject implement- ation. The report, therefore, has a slightly different perspective, focusing more on L,YB's external relationships rather than on its institutional development. The report is based on prc4ect files, Staff Appraisal and President's Reports, sector studies and on the "Sector Operations Review: The Industries and DFCs Program in Turkey" (Report No. 3077, July 18, 1980), carried out by the Operations Evaluation Department. Operational data on subprojects were prepared by DYB staff in Turkey. No comments were received from the Borrower. This project was not audited by the Operations Evaluation Department. I.  - ii - PROJECT COMPLETION REPORT TURKEY - FIRST DEVLET YATIRIM BANICASI PROJECT (LOAN 1024-TU) BASIC DATA SHEET 4 (Amounts in US$M) LOAN STATTIS As of Nov. 1983 Original Disbursed Cancelled Repaid Outstanding Loan 1024-TU 40.0 39.7 0.3 22.7 17.0 CUMULATIVE LOAN DISBURSEMENT FY75 FY76 FY77 FY78 FY79 FY80 FY81 (i) Planned 6.0 19.0 34.0 39.0 40.0 40.0 40.0 (ii) Actual 5.7 18.9 30.7 34.6 37.6 39.4 39.7 (iii) (ii) as Z of ti) 95 99 90 89 94 98 99 OTHER PROJECT DATA Original Loan Actual or Date Re-estimated Board Approval 06/20/74 Loan Agreement - 06/28/74 Effectiveness 09/30/74 09/30174 Loan Closing 12/31/78 03/31/81 MISSION DATA No. of Date of Montht Year Persons Manweeks Report Preappraisal 11/73 3 6 12/03/73 Appraisal 01/74 - 2/74 4 8 02/19/74 Supervision I 12/74 1 1 12/17/74 Supervision II 04/75 1 1 05/16/75 * Supervision III 06/75 2 2 06/20/7 5 Supervision IV 08/76 3 6 09/30/76 Supervision V 11/77 1 1 12/05/77 Supervision VI 05/78 1 2 05/26/78 Supervision VII 11/79 1 2 02/26/79 FOLLOW-ON PROJECT(S) DYB II - Loan 1379-TU ($70 million) signed on 03/23/77 DYB III - Loan 1998-TU ($70 million) signed on 06/03/8 1  - iii - PROJECT COMPLETION REPORT TURKEY - FIRST DEVLET YATIRIM BANKASI PROJECT (LOAN 1024-TU) HIGHLIGHTS In making the first loan to DYB in 1974, the expectation that the Bank's association with DYB would help rt;form SEEs and the public sector investment allocation process was more important in the Bank's perception than the transfer of funds or the addition to industrial capacity. As discussed in Chapter III, it has been evident that the characteristics of the iustitutional situation, environment and practices prevailing in Turkey constrained progress in this direction. After one turther attempt under Loan 1379-TU, it was realized that the reform of the SEE system was a much more important and complex task, which could not be achieved by building up DYB alone. In fact, substantial improvement in DYB's internal institutional capability has occurred, but it has been unable to bring its capability to bear on the problems of SEEs due to its being itself a part of the system. This issue had to be taken up at a policy dialogue level. The completely different design of the third DYB operation (Ioan No. 1998-TU) was a transitional approach and a result of this conclusion. The key issue of SEE reform and of DYB's role is now being addressed by the Bank as a part of the policy dialogue with the Government under Structural Adjustment Loans and Specialised Technical Assistance. In view of the rigidity of the SEE system in Turkey, its long history and tradition of centralized decision-making, the limited results achieved under the first loan were not surprising, and the fact that DYB has gradually built up its professional capacity, should be seen as a positive result and a necessary condition to enable DYB to widen its role and influence over the SEEs financed by DYU. The major lesson to be learnt from the Bank's experience with DYB is that improvements in tne SEE system can oe achieved only by tackling the issue directly through SALs, TA loans and an industrial sector policy dialogue, etc, and not through indirect loans through a public sector DFC like DYB. It would appear that institutioual improvements occurring within the DFC do not themselves result in improvements in the operations of its clients, if the role of tne DFC is severely circumscribed, as in the case of DYB, and that only limited institution building objectives can be achieved in the public industrial sector financing system by working through a public sector DFC such as DYB.  PROJECT COMPLETION REPORT TURXEY - FIRST DEVLET YATIRIM BANKASI PROJECT (LOAN 1024-TU) I. INTROflICTION A. Background 1.01 This report reviews the major objectives, expectations and issues set or identified under the above loan and the record of implementation. Though the loan was made to an independent public-sector DFC - the Devlet Yatirim Bankasi (DYB) - the loan differs considerably in its objectives from normal lines of credit to LJICs, the reason being that DYB is an integral part of the development planning, resource allocation and implementation system in Turkey as far as it relates to the investments of State Economic Enterprises (SEE). While reviewing the implementation of this loan, therefore, the problems of tne system and its resistance to change have to be taken into account. This report has been preceded by a detailed Sector Operations Review of the Industries and DFCs Program in Turkeyl/ carried out by OED staff during 1980 and draws extensively on the review report. DB. Sectoral Context 1.02 SEEs in Turkey were established since the early lY3Us' to tulfill needs not adequately being served by the private sector. Over the years, they have come to play a dominant role in the economy, in industry as well as in traditional public ucilities, transport, and agricultural marketing and supply. SEEs currently account for a substantial share of public investment (4UZ), GDP (8X) and non-agricultural employment (10x). In industry, SEEs have a virtual monopoly in petroleum refining, steel, alcoholic beverages and basic metals, and have large shares in fertilizers, pulp and paper, cement, coal, sugar, machinery and chemicals. Broadly defined, in terms of the law as Lt stood then, SEEs are enterprises which have more than one half of their capital owned by the Government, although within this definition they may assume several legal forms, including being set up as a private company. Those SEEs which are fully Government-owned are entitled to create separate legal entities called Establishments which are, in effect, independent branch operations. Every SEE, along with its Escablishments, is under the control of its related Ministry. The basic law under which all SEEs operate was law 440 until the passage of the new SEE law in May 1983 (see para 1.04). Supervision of SEE operations is the general responsibility of the related Ministry and the specific responsibility of the High Control Board, an auditing organization, which reports directly to Parliament. Financial SEEs are also audited by a department ot the Ministry of Finance. The Government provides SEEs with the credit and capital needed to sustain operations and to make new investments. This is done within the framework of the Five Year Plan and the annual programs for public sector industry. SEE 1/ Sector Operations Review:. The Industries and DFCs Program in Turkey (Report No. 3077, dated July 18, 198U)  project proposals have co be vecred and approved by the State Planning Organization (SPO). Although the respective roles of SPO, DYB and the Treasury in the scrutiny and approval of SEE investments are not clearly demarcated, since 1981 most budgetary funds for loans for investment in profitable SEEs are in principle channelled through DYB while budgetary funds for investment in nonrprofitable SEEs are transferred only after scrutiny of the project by DYB and under DYB's supervision during implementation. ibis charge in the system has not been implemented fully as yet, though there has been substauitial reduction in direct budgetary transfers to SEEs. l.U3 Since the late 1970s, the operating losses and growing iavestment demands of the SEEs have placed substantial burdens on the budget and added to inflationary pressures. While some SEEs were well run and profitable, in aggregate they showed increasing losses througn 1980. Since then, as a result of certain interim measures taken by the Government, primarily relating to liberalization of output prices, the profitability picture has changed significantly, and the SEEs are expected to show an overall net profit of nearly TL 46 billion in 1982. Wnkat has not happened, however, is any major improvement in SEE efficiency. With prevailing SEE output prices in many cases well above competitive world levels, the burden of economic and technical inefficiency is merely being reallocated from the budget to customers and the private sector generally. The majority of the problems afflicting the SEEs arise from the fact that while the enterprises have been organized as economic entities with the objectives of efficiency, productivity and profitability, they are subject to constant intervention of the Government in pursuit of different and often conflicting objectives. The causes of poor performance include price controls, uneconomic investments, overstaffing, lack of autonomy, frequent changes of management, inadequate salaries for managerial and technical staff, excessive centralization of decision making and a confusion between economic, social and political goals. 1.04 The Government has given considerable thought to the problem of reforming the SEEs since 1980. After a long process of deliberation, a comprehensive SEE Reform Decree was issued on May 20, 1983. The decree creates a Supreme Board of Coordination for all SEEs headed by the prime minister and includes most ministers concerned with economic affairs. The decree also removes SEEs from civil service salary regulations and, in effect, repeals law 440. The transitory provisions contained in the Decree permit continuation of the old regulations until new regulations are drawn up and waile, theretore, the Aeform Decree is yet to nave any effect, it appears to be a step in the direction of effective reform. C. DYB - The Institution anad its Role 1.05 DYB was establisned in 1964 under Special Law 441 to provide long-term credits, guaraatees and other services to SEEs. As a State Economic Enterprise itself, DYB was also subject to provisions of Law 440. DYB's parent ministry is the Ministry of Finance. Its authorized capital is TL 43.0 billion which is fully paid in and held entirely by the Treasury as of December 31, 1982. DYB takes lending decisions under guidelines laid down in Law 441, which are basically indicative. DYB functions within the complex administrative procedures for provision of investment funds to SEEs. As already mentioned, the SEEs submit their projects and financial requirements to SPO in July every year. SPO consults the Planning Council and the Ministry  of Finance, and by the end ot the year the Government approves the Annual Investment Program. DYB participates in the deliberations in an aavisory capacity. The Sk.Es can then approach 0YTh for funds within the allocation made under the Annual Investment Program and submit their project feasibility studies, etc. for appraisal. DYB is empowerea to reject or modify projects it finds unacceptable, but until 1980 suen projects could be implemented by the SEEs from funds made available by the Government through the budget. This direct access to the Treasury by SEEs, and possibillty of bypassing DYB if necessary, coupled with the fact thiat DYB does not have resources to finance more than a small proportion of the SEEs' investment programs, diminished DYB's role in SEE financing and prevented TYh from exercising real influence over its borrowers. 1.06 Until a few years ago, the resources of the DYB were obtained mainly from tne issue of bonds with maturities of 20 years and a fixed interest rate of 20 percent, which were subscribed by Social Security Institutions and by Retirement and Pension Funds. With the rise of inflation, the interest rate of such bonds became highly negative in real terms and the financial situation of the Social Security Institutions deteriorated sharply. These interest rates were raised in 1981 to 30 percent, on the basis of subsidies granted by the Treasury, but they continued to be insufficient. The DYB has also used some foreign credits, mainly from the World Bank and the European Investment Bank. The exchange risks are borne in full by the SEEs to which the funds are lent. The main problem of the DYT is the scarcity of additional financial resources to satisfy the demand for new investment credits from the SEEs. The Social Security System and the Pension and Retirement Funds, after the losses they have suffered, are not interested and have not the capability of increasing tneir portfolio of bonds from iJYB. At the same time, the access to toreign credits has been limited. To provide the DYB with funds for new operations, the Treasury nas granted it two loans of TL 40 billion each, in 1981 and 1982 respectively, with maturities of 30 years and an interest rate of 10 percent. This reflected the Government's policy of channelling all investment funds to SEEs through DYI, rather than lending them directly, in order to improve project evaluation and execution. D. Loan Features 1.07 Loan No. 10 24-TU for $40 million was approved by the Board on June 2U, 1974, signed on June 28, 1974, and became effective on Septemaber 30, 1974. The loan was made to DYB with the Guarantee of the Government at an interest rate of 7 1/4Z p.a. The foreign exchange risk was born by the sub-borrowers. As this was the first Bank loan to DYB, there was no free limit, i.e. all subprojects under the loan required Bank prior review and approval. The last date for subproject submission was set at November 30, 1976, and extended once to February 28, 1977. The closing date, originally set at December 31, 1978, had to be extended several times, and the loan was finally closed on March 31, 1981. On that date a balance of $262,401, which remained unutilized, was cancelled. II. OBJECTlVES 2.ul The bank considered the improvement of the investment process as the main objective of the loan to DYB. It was felt that the investment decisions ot the SEEs needed to be overviewed, and their management and efficiency in  - 4 - operation upgraded. In the case of some public sector units (steel, newsprint, fertilizers) this was to be achieved through direct lending. It was expected tnat the sAme objectives could be reached for a large number of small- and mediumrsized SEE projects by approaching them through a DFC. DYB was already established in the field, and it was identified as the agency through which the Bank would seek to achieve this objective. The logic of such a move was apparent. The public sector in Turkey accounted for almost half the investment (and half the value added) in the manufacturing sector, and if the Bank was to be concerned with the allocation of overall investment and the efficiency of its operations, it could not ignore this large segment of manufacturing industry without detracting considerably from the effectiveness of its overall lending to the country. Besides providing an opportunity for an institution-building role, such Lending could also be expected to provide, through direct contact, a better perception of the worKing of (and relationships within) the public manufacturing sector in the country. 2.02 After the investment projects of SEEs were included in the annual investment program, DYB appraised those submitted to it for financing, putting emphasis on checking the technical, marketing and financial aspects, and rejecting projects which were not considered sound. The Bank accepted this as a useful check to ensure that projects financed by DYB were designed to make a positive financial contribution in the public sector. The DYB/SEE relationship had traditionally not been aimed at reform or improvement in the SEEs nor to have gone into areas of management quality and previous project implementation performance of the SEEs sponsoring the projects submitted for financing. It was, therefore, a second objective of the loan to help DYB to play, in respect of small and medium size projects, the same role the Bank played in directly financing and molding large industrial projects. 2.03 The third objective of the loan was to strengthen DYB's institutional capability and financial structure to enable it to acquire the capacity to bring about improvements in the operations and financial performance of its industrial SEE borrowers. 2.04 The fourth objective, as with other line-of-credit operations, was to support economically and financially viable medium-size projects in Turkey, using DYB as an intermediary institution. 2.05 Though these objectives, as stated above, were rather ambitious, it was recognized that an overall change in objectives and practices would be very difficult to achieve immediately. Emphasis was therefore placed on the following measures. Firstly, by an informal arrangement DYB was to receive sumiaries of investment proposals from the SEEs at the same time these were submitted to SP0, and DYB was to be consulted and participate in an advisory capacity in the process of formulation of the annual investment program. Secondly, the subprojects financed would have to be of a size amaller than projects which would normally call for a direct appraisal and financing by the Bank. Bank funds would have to represent at least 152 of the total investment cost of each subproject so that the Bank's participation would be substantial enough to warrant the type of effort required from DYB. Thirdly, a much greater emphasis was to be placed on improving the quality of DYB's appraisals, especially with regard to assessing the managerial and financial capability of the sponsoring SEEs. Finally, for Bank financed projects, DYB was to extend its supervision throughout the life of the subloan. It was clearly recognized  thac the Bank would have to reach understandings witn the Government that DYB would be allowed to function along these lines in reality, and that such a change could only be applied on a limited scale initially. The first loan to DYB was, therefore, clearly understood to be of an experimental nature. III. ATTAINMENT OF OBJECTIVES A. Institutional Objeccives 3.01 The Bank's main objective, which was to improve the resource allocation process and the management efficiency of projects ia the public sector by lending thtrough DYB, met with very limited success under the loan. The characteristics of the InstiCutLonal situatLon, environment and practices prevailing in Turkey constrained progress in this direction, especLally as during the ten years that had elapsed between the setting up of 1Y3 ana the Bank loan, DYB was not being consulted on the choice of nubLic sector investments (though it did have the right to reject investment proposals submitted to it for financing wnich it considered unsound) and was not allowed to exercise the rights ot the financier to ensure tnie efficient management of the enterprLses to which it lent. This system similarly inhibited progress in achieving the second objective of enabling DYJi to play, in respect of small and medium sized projects, the same role the Bank played in large projects. In retrospect, it would appear that the rigidity of the SEE system and the ramifications of any attempts to make significant changes were underestimated and that these issues needed to be addressed at the macroeconomic level, rather than under a loan to an institution which was itself only a small part of the system. 3.02 The objective of strengthening DYB's institutional capabilLCy adLd tinancial structure was achieved to a moderate degree. Since DYB was permitted Dy its law to issue bonds without being restricted by the amount ot its capital, a debt/equity covenant had not been included in the first bans loan. Instead, a debt service coverage ratio, to be minimum of 1.3:1 was stipulated. DYB stayed well above this limit throughout the loan utilization period and also thereafter. DYB's equity base was strengthened from TL 1.9 billion as of December 31, 1974, and was gradually increased by additional capital increase and also accumulation of reserves to TL 3.1 billion as of December 31, 1979, and then to TL 43.3 billion. However, due to rapid devaluation of the Turkisn Lira over the perLod, the increase in $ equivalent terms was not substantial. 3.U3 The task of building up DYb 's institutional capacity by building up its professional staft was more difficult but has now (by 1983) met wLth greater success. DYB is permitted to engage proiessional pruject appraisal staff on contract basis, though tne number and contract compensation for such personnel nave to be approved by the Finance ttinistry. TDe number or such staff increased from 18 in 1974 to 4b in 1979 and 97 by end-1962. Salaries ot conLract personnel increased by an average of 35A up to 1982 (i.e., at a rate well below the increase in cost of liviag) and were doubled in 1982. The loss of professional staft has been checked for the present and DYB's appraisal capacity has been stabilized at a fairly acceptable level.  3.04 In addition to its normal project financing activity, DYB has also built up its capability for training of its own professional staff and tecinical staff of SEEs to a considerable extent. DYB now conducts, on a regular basis, 4 - 5 courses a year of 4 - 6 weeks duration on project analysis and implementation. Staff from SEEs participate in these courses along with DYB staff. DYB has acquired, under UNDP and OECD technical assistance grants, adequate training materials and seminar facilities for these courses. This training functions of DYB, while being necessarily secondary to its major activity, is of considerable long-term importance and is being perrormed with success. B. Subprojects 3.05 As regards subprojects financed, the loan was comouitted on time and the subprojects met the criteria regardiag size of projects and of subloans. ex ante rates of return were also acceptable. The performance of the subprojects, which are all in operation now, is discussed in chapter IV of this report. C. Follow-on Projects 3.06 By 1976, when the Government's request for a second line of credit to DYB was being considered in the bank, the difficulties in achieving desired progress on the main objectives of the first loan, as well as the modest success in building up DYB, was apparent. Nevertheless, it was recognized that broad institutional changes could not be immediate, and a better approach would be to seek incremental changes in DYB itself and in its roLe in the planning and investment process in the public sector. Duriog the first loan an improvement in appraisal standards of DYB had been achieved. This was further pressed in the second loan (loan No. 1379-TU) and additional require- ments were stipulated at formalizing DYB's advisory role in the preparation of the Annual Investment Program, broadening the scope of its audit and strengthening DYB's influence over its subborrowers by having subloan agreements signed with the project entities (establishments) as well as the sponsoring SEEs. 3.07 The second loan is still not fulLy disbursed, but experience by 1979 showed that there had not been adequate progress. Consequently, when the request for a third loan was received, the Bank informed the Turkish Government that "the role of DYE within the system involving SPO, the Treasury and the SEEs, for the consideration and financing of SEE investment projects is indeed crucial for any future Bank lending relationship with DYB". The bank asked for a formalization of procedures including DYB's role, domaiu, and relationship with SPO and the Treasury on one hand and tee SEEs on the other. The Bank stated: "'We hope tnat assurances retarding the above actions ensuring that DYE in future years would be given full responsibility as the development bank of the public sector, can be given soon." There was an internal Bank decision not to make any further DFC line of crea.c type of loans to DYE unless the above assurances werc received. 3.08 In the wake of the economic crisis of l979/8O, the need for urgent Bank assistance to the SEE sector was apparent. At the same time. institutional reforms necessarily had to take a lower priority. therefore the third bank loan to DYs (loan No. '998-TU) was designed in a basically different  manner as compared with tne tirst two loans. DYB was asked to produce a list ot subproject proposals (23), wnich was narrowed down to a short list of 11 projects. The Bank appraisal mission jointly appraisea these projects along with DYB staff with particular emphasis on their economic merit and included six ongoLn6 completion/rehabilitation and oalancing projects in the loan. In effect the lo-in was wnade to DYB, but for a preselected group of high-priority subprojects, preselected by the bank, which DYB could not change. This loan thus had none of the typical features of the previous two line-of-credit operations, and succeeded, as warranted by the acute economic crisis, in funding the completion of economically viable projects and in intiating specific managerial and operational improvements in the SEEs so financed. At tUe same time, the Government committed itself to carry out an indepth study of DYB's future role in all iCs facets, in cne context of the reform/ reorganization of SEEs, thus maintaining pressure for institutional reforms. The loan itself is in its initial stages of utilization while the study has not begun, pending the issuance of the SEE Reform Decree.!/ 3.09 In the meantime DYB management displayed considerable initiative and interest in reviewing DYB's role. In 1981-82, an in-depth study of charters of public sector DFCs was made and charges in DYB's Law were proposed for consideration by the Government. Tne major changes proposed by DYB aim at empowering DYB to (i) appraise the entire SEE, and not merely the investment project submitted; (ii) supervise its borrowers throughout the life of its loans; (iii) pay market salaries to its professional staff; and (iv) to take equity positions and nominate representatives to SEE boards. The proposed cnarges closely parallel the Bank's views on changes necessary to strengthen DYB's role and are presently under Government consideration. If enacted, they would strengthen DYB's role considerably. IV. SUBPROJECTS FINANCED A. Description 4.01 Loan No. 12U4 was utilized to finance 11 medium-sized investment projects sponsored by six SEEs - Sumerbank (5), SEKA (2), AZOT (l), PETKIM (1), SEKER (1) and Etibank (1). A list of subprojects is attached as Annex I. The largest subloan was for $7.92 million (Sumerbank - K. Maras Cotton Textile Project) and the smallest for $1.84 million (Sumerbank - Erzincan Cotton Textile Project). The average size of subloans was $3.97 million. The subloans represented at the then prevailing exchange rate of TL 13.5U = $1.00, between 59% and 8X of the total investment costs of the projects. The entire loan amounted to about lb% of the total investment cost of tne subprojects. These percentage shares very rapidly became meaningless with the successive devaluation of the TL during the implementation of the subprojects. At the present exchange rate of TL 206 = $1.00, the loan would be equal to TL 8.2 billion, which is 90% of the total investment cost of the ten subprojects. B. Performance 4.02 The subprojects were in the textile, chemicals, fertilizer and plastics, ceramics, sugar and pulp and paper subsectors. These subsectors 11 This is now expected to commence as the SEE Reform Decree has been issued on may 20, 1983.  - 8 - provide a relatively comprehensive coverage of SEE activities. A number of general conclusions can be drawn from the performance of these subprojects, which are now all in operation. These are: Ci) Almost all the projects suffered slippages in their completion dates and consequent cost overruns due to resource constraints; (ii) they were the usual capital-intensive and import substitution type of investments of projects often taKen up by SEEs; (iii) the ex ante ERR estimates made by DYB during project appraisal were over-optimistic, and the projected returns did not materialize due to difficulties and delays in subproject implementation and also due to failure to achieve the backward and forward linkages assumed to be achieved, and t finally, (iv) capacity utilization and revenue assumptions made by DYB were optimistic. Details of subproject performance are provided in Annex II. C. Quality of Appraisal and Supervision 4.03 As can be assumed from the previous account of the performance of the subprojects, DYB's project appraisal quality was uneven. However, the poor performance of the subprojects cannot be attributed to poor quality of appraisal alone. The increasing strain on the Turkish economy and the price controls under which the SEEs operated in that period, also were major factors. DYB did improve the coverage of its appraisals by including data on past working and financial operations of the sponsor SEE in its appraisals, and its methodology of ERR calculation was improved gradually by repeated discussions with Bank staff. In sum, all tne ills of the SEE system, compounded by the economic situation, resulted in under-achievement of one of the objectives of the loan - to finance economically viable subprojects. 4.04 DYB's project supervision effort did improve during the loan implementation. Each Bank-financed subproject was visited by DYB staff at an average interval of about 14 months during its construction phase, which is a much better record than in case of projects financed by DYB out of its own resources. Despite agreements reached during loan negotiations, DYB's supervision does not extend beyond the construction phase even at present, as the SEEs have consistently resisted DYB's requests for progress reports after project construction is complete. The proposed changes in DYB's Charter (para 3.09) will enable DYB to improve the depth and scope of its clients further. v. DYB: OPERATIONAL AND FINANCIAL PERFORMANCE A. Loan Operations 5.01 DYB approvals, co itments and disbursements from 1974 - 1981 are shown in Annex III. DYB's operations are an integral part of the Annual Investment program of the SEEs laid down in the Annual Development Plan and, therefore, projecting DYB's operations in isolation and comparing its actual operations witti the projections has always been a difficult exercise. It is more meaningful to examine the number of new projects appraised each year by DYB and to look at the share of DYB financing in total investments of SEEs each year.  DYB: New Approvals, Disbursements and Share (amounts in TL million) Year New Project Approvals Disbursements Share in total No. Amount SEE Investments (%) 1974 20 1,389 5,291 31.3 1975 8 3,938 5,4U6 20.7 1976 24 8,704 8,211 23.1 1977 23 20,932 9,358 2u.3 1978 18 3,816 6,764 11.2 1979 9 20,31 1 11,7U00 9.1 1980 9 10,345 16,238 5.8 1981 10 13,666 52,134 13.3 5.02 DYB's share in SEE investments can be seen to have fluctuated widely according to funds made available to DYB by the Government. DYB was unable to raise resources independent of budgetary allocations, as its onlending rates were fixed by the Government at negative levels in real terms (DYB's bonce issue rate of 20Z + 1-1/2% spread). This has been and continues to be the major factor inhibiting steady growth of its operations. 5.03 In real terms, DYB's disbursements during 1981 have barely recovered to the 1974 level. Disbursements (TL billion) 1974 1975 1976 1977 1978 1979 1980 1981 5.3 5.4 8.2 9.4 6.7 11.7 16.3 52.1 GDP Deflator (1974 = 100) 100 116.5 136.6 170.4 233.1 372.9 843.5 1,119.2 Disbursements in 1974 Prices (TL billion) 5.3 4.6 6.0 5.5 2.9 3.1 1.9 4.3 5.04 A detailed breakdown of DYB's loan approvals by sector, geographical location of projects and loan maturity is provided as Aanex IV. Since DYB does not have a specific resource allocation role among industrial subsectors or responsibility for geographical dispersal of industry, the breakdown does not disclose any particular trend. DYB loans are predominantly long-term. Over 90% of loan approvals are for a term exceeding 10 years. B. Operational Results and Financial Position 5.05 DYB 's Income Statements and isalance Sheets for 1974 - 1981 are attached as Annexes V and VI. DYB's profitability has been consistently high. The net profit before tax averaging 36.3% of equity over the last eight years. DYB has also managed to keep its administrative expenses to less than 1Z of its total assets during the period. Its liquidity has been sound, the current ratio being above 1.7 at all times. DYB has no debt/equity ratio ceiling, but the actual debt/equity ratio has declined steadily since 1977 to  - 10 - a normal (for DFCs) level of 8.8:1 in 1981. Overall the picture is of an institution with sound financial management. The arrears situation as ot December 31 of each year from 1974 to 1981 is presented in Annex VII. Significant ratios from the above statements are presented in Annex VIII. DYB loan arrears as of end of each year are adjusted against disbursements to the defaulting borrowers in the subsequent year. The level of arrears does, therefore, not enable an assessment of the quality of DYB's portfolio, but rather a partial picture of inter-SEE debt arrears. VI. CONCLUSIONS 6.01 In making the first loan to DYB in 1974, the expectation that the Bank's association with DYB would help reform SEE and the public sector investment allocation process was more important in the Bank's perception than the transfer of funds or the addition to industrial capacity. As discussed in Chapter III, it has been evident that the characteristics of the institutional situation, environment and practices prevailing in Turkey constrained progress in achieving progress in this direction. 6.02 After one further attempt under loan No. 1379-TU, it was realized that the reform of the SEE system was a much more important and complex task, which could not be achieved by building up DYB alone. In fact, improvement in DYB's internal institutional capability has occurred, but it has been unable to bring its capability to bear on the problems of SEEs due to its being itself a part of the system. This issue had to be taken up at a policy dialogue level. The completely different design of the third DYE operation (Loan No. 199o-TU) was a result of this conclusion and represents a transitional approach. The key issue of reform of the SEE system, as well as of DYB's role within the system, is now being addressed by the Bank as a part of the dialogue under Structural Adjustment Loans and specialised Technical Assistance. In view of the inertia of the SEE system in Turkey, its long history and tradition of centralized decision-making, the limited results achieved under the first loan were therefore not surprisiag. Tne fact that DYB has gradually built its professional capacity, should be seen however as a positive result. It is too early to envisage what effect the recent SEE Reform Law will have on the relationship of the Bank with DYB and the Bank's approach on financing of SEE investment projects if so requested by the Government. It is clear however that only a more autonomous and responsible DYB would enable efficient channelling of Banks funds to SEEs in future. -q  TURKEY - LOAN NO. 1024-TU List of Subprojects No. Name SEE Sub-Sector DYB Financing aturiTy Investment X financed _______ __ ___ ______ L.C. F.C. Totals'/ Year82 _ _ _ _ _ _ _ _ _ _ _ _ (TL '000) (0'O00) (TL'U00 ea.) (TL 'U00) A-1 Erzincan Cotton Tex. Sumerbank Textiles L5,828 1,843 40,708 10(2) 59,523 68 A-2 K. Maras Cotton Tex. Sumerbank Textiles 52,147 7,924 159,121 15(3) 254,578 62 A-3 Dalaman Chlor-Alkali SEKA Chemicals 29,329 5,646 105,550 13(3) 131,470 80 A-4 Polythene Bags Project Azor Fertilizers 34,211 3,375 79,773 15(3) 136,052 58 A-5 Burdur SugaL- Factory Seker Sugar 609,532 2,107 637,976 15(3) 681,847 93 A-6 Carbon black Plant Petkim Chemicals 61,000 6,414 147,589 14(2) 1,13b,767 13 A-7 Cayacuma Plant Kp. SEKA Paper 35,800 1,926 61,801 15(3) 76,033 81 A-8 Bozuyuk Ceramics Sumerbank Ceramics 264,656 3,747 315,240 14(3) 425,574 74 A-9 Synthetic Leather Plant Sumerbank Plastics 177,475 4,484 238,009 14(3) 357,013 67 A-10 Calcium Carbide Plant Etibank Minerals 119.476 2,505 153,293 15(3) 221,199 69 TItals 1,389,454 39,971 1,939,060 3,480,056 56 I- 1/ converted at TL 13.50 - 1.100 2/ including grace period shown in parentheses 1m  TURKEY - LOAN NO. 1024-TU Performance of Subprojects (TL '000) No. Name SEE Type Investment Cost Completion Date Employment Annual Profit Projected Actual S overrun Projected Actual Delay (me.) Projectet Actual Projected Actual A-1 Erzincan Cotten Sumerbk 59,523 43,144 5/ - 08/77 12/77 4 - -47 2 15,540 57,000 A-2 K. Mavas Cotton SumerbK New 254,578 517,513 203 12/77 12/79 24 766 177 35,445 15,000 A-3 Dalaman Chlor-AlkaL SEKA New L31,47U 258,344 196 03/77 08/78 17 56 59 29,74b N A 3/ A-4 Polythene Bags Plnt AZOT New 136,052 122,355 - 10/75 10/76 12 156 183 23,107 N.A 1/ A-S Burdur Sugar Fctry Saker Exp. 681,847 3,448,b92 50b 9/78 12/82 51 1,;178 1,491 89,062 - 4 A-6 Carbon Black Plant Petkim New 1,136,767 1,261,447 111 12/77 O6/81 42 -171' 24 62,458 239,303 A-7 Cayacuma Plant Exp. SEKA New 76,033 45,944 5/ - 9/7b 12/78 27 31/ 3 21,711 753,6UI A-8 Bozuyuk Ceramics Sumerbk Exp. 199,58U 959,157 480 6/78 6/80 24 242 2U0 66,846 104,569 A-9 Syntnet.Leather Pl. Sumerbk New 211,874 2,159,258 6/ 1019 6/78 12/82 54 355 - 112,000 - 4/ A-10 Calcium Carbide PI. Etibank New 221, 199 264,833 119 6/77 12/80 42 103 102 49,909 49,000 Total, 3,108,923 9,080,667 261 2,942 2,192 1/ Plant was to be manned by excess manpower from other plants. 2/ Reduction in existing manpower of existing Eraincan Textile mills during 1980-1982. 3/ Profit figure not avai-lable as it is consolidated into income statements of the entire SEE. Z/ Plant not yet fully operative. w S/ Actual investment cost lower than projected cost due to reduction in scope of project. 6/ Abnormal cost overrun because of increase in project size during implementation.  TURKEY - LOAN NO. 1024-TU DYB; Loan Approvals, Commitments and Disbursements (TL Million) 1974 1975 1976 1977 1978 1979 1980 1981 Approvals Local currency!/ 1,388.8 3,937.8 8,7U4.0 20,932.4 3,816.2 20,311.3 10,344.9 13,665.8 Foreign currency 284.9 1,172.5 17.8 1.Z18.4 4,974.1 5,568.7 11,818.8 Totals 1,388.8 4,222.7 9,876.5 20,950.2 5,034.6 25,285.4 15,913.6 25,484.6 Commitments Local Currency-&! 5,832.3 5,973.2 11,138.2 11,131.1 4,617.7 8,193.1 7,260.0 60,596.8 Foreign Currency__ 284.9 1,172.5 17.8 1,218.4 4,974.1 5,568.7 11,818.8 Totals 5,832.3 6,258.1 12,310.7 11,148.9 5,836.1 13,167.2 12,828.7 72,415.6 Di sbursements Local CurrencyZ/ 5,291.3 5,406.2 8,211.4 9,358.4 9,414.6 11,184.0 14,093.3 56,680.6 I Foreign Currency 87.2 221.8 227.9 826.4 1,990.0 2,657.3 1,749.7 Total: 5,291.3 5,493.4 8,433.2 9,586.3 10,241.0 13,174.0 16,750.6 58,430.3 1/ Approvals for new projects, appraised for the f irst time in each year. Total amounts approved are total of the first annual tranches approved for each project. 2/ Commitments and disbursemnents are total of loan contracts signed each year for new projects as well as current years' annual tranches for ongoing projects. 3/ Foreign currency commitments equal foreign currency approvals as DYB signs a contract for the entire foreign currency loan approved.  TUIUCgY - LOAN NO. 1024-TU DYBo Analysio of Loan Approvals (TL Million) 1974 1975 1976 1977 1978 1979 1980 19dl By Sector No. hAmount No. Io No AOunt I HO. haOunt1 XNo No. un t No. Amount 2 No. Amount I No. A-mount 2 Mining 3 304.0 22 1 1,100.0 26 3 854.8 9 - 1 230.0 1 170.0 1 4 831.6 3 hanufacturingt Consumption gdo. 5 548.5 40 3 1,615.2 38 8 662.4 7 5 1,342.8 6 10 1,790.6 35 3 2,997.3 1 3 7,250.0 45 2 2,332.9 9 Intermediate gds. 10 507.5 38 4 1,507.5 3b 7 6,652.9 67 13 10,093.3 51 8 3,244.0 65 3 6,058.1 24 3 7,693.6 48 - - - Capital gds. 2 28.8 - - _ 1 54.7 - _ - a _ - _ - - _ 2 800.0 6 2 14,320.1 56 Subtotal manufacturingt 20 1,300.8 100 8 4,222.7 100 19 8,224.8 o3 18 12,036.1 57 18 5,034.6 100 7 9,285.4 25 9 15,913.t 100 8 17,484.6 68 Transport - - - - - - 2 235.0 3 1 74.1 - - - - Energ,y - - - - - - - - 4 8,840.U 43 - - - - - - - - - 2 8,UOO.0 32 Telecommunications - - - - - - 3 1,436.7 14 - - - - - 2 lo.000.0 75 - - - Total: 20 1,388.8 Ti0 8 4,222.7 2L 4 9,896.5 100 Z3 20,950.2 100 iF 5,034.b 100 9 25,285.4 100 9 15,YI3.6 100 10 23,4s4.b MO By Ragion Harmara 3 130.2 9 2 965.U 23 4 629.7 7 5 1,174.1 6 1 L,4L0.3 28 4 1,264.2 7 1 2,705.3 17 254.6 L Ageani 4 161.6 12 1 9.3 - 5 4,957.1 50 3 7,369.0 35 1 302.1 b - - - L 159.1 1 5,o06.7 22 Black Sea - - - - - - 1 35.8 - 5 1,487.0 7 2 I,157.9 23 - - - 2 4,bl4.9 29 9,684.1 38 Mediterranean 1 233.b 17 2 487.6 11 2 1,765.8 18 3 4,523.0 21 - 100.7 2 - - - - - - 9,429.3 37 Central Anatolia 6 337.7 24 2 2,475.9 59 7 1,020.4 10 1 4,423.5 22 3 50.3 1 3 2,275.7 9 3 4,774.1 30 2b2.5 I East Anatolia 2 226.3 16 1 284.9 7 1 6d.5 1 2 102.0 - 1 654.5 13 1 1,770.0 7 1 3,341.8 21 247.2 1 s. e. Anatolia 4 299.4 22 - - - 4 1,399.2 14 4 1.871.6 9 _ 1,358.8 27 1 19,975.5 79 1 318.4 2 - - Tota1$ ZU- 1,3880.8 fOU 8 4,222.7 -go 24 9,876.5 100 23 20,95,T.2 100 18 5,034.6 110 9 25,285.4 100 9 15,913.6 100 10 25,484.6 *i0 By Maturities 5 - 7 yeara 9 333.3 24 1 9.3 - I 16.3 - 1 23.5 - - - - - 8 - 10 years 6 236.1 17 1 421.3 10 8 1,185.2 12 2 419.0 2 1 50.3 1 2 505.7 2 - - - 1 2.0 - 10 - 15 years 4 708.3 51 - - - 9 888.9 9 2 209.5 1 5 503.5 10 3 1,011.4 4 3 1,113.9 7 6 6,371.1 25 15 - 20 years I 111.1 8 6 3,792.1 90 6 7,786.1 79 17 17,388.7 83 12 4,480.8 89 4 23,768.3 94 b 14,799.6 93 2 9.684.1 38 over 20 years - - - - - - - - 1 2,909.5 14 - - - - - 1 9;427.4 37 Total& 20 1,358.8 100 I 4,222.7 MU 24 9,876.5 LOO 23 20,950.2 100 To 5,034.6 liRi 9 25,285.4 100 9 15,913.6 i5o 10 25,484.6 WO a ~ ~ ~ ~ ~ ~ ~ ~ L'  TURKEY - LOAN NO. 1024-TU DYB; Condensed Income Statements for Years Ended December 31 (TL Million) 1974 1975 1976 1977 1978 1979 1980 1981 Income Interest, commissions and charges on loans 1,648.0 2,447.8 4,348.7 7,364.2 7,747.9 9,950.9 11,685.9 16,085.5 Profit from foreign exchange transactions 0.1 - 48.7 268.2 992.3 2,638.4 5,210.9 5,144.6 Portfolio income 19.2 51.9 62.5 143.2 442.5 399.7 380.1 1,545.1 Other 0.1 0.4 - 24.5 0.6 5.5 0.3 0.5 Tbtal Income 1,667.4 2,500.1 4,459.9 7,800.1 9,183.3 12,994.5 17,277.2 22,775.7 EKpenses Interest on borrowings and bonds 1,211.4 1,678.0 3,596.5 6,523.8 6,592.3 7,327.4 9,483.4 12,749.7 Other charges 0.9 1.1 0.1 0.3 0.2 0.2 0.4 0.4 Losses from foreign exchange transactions 28.6 41.7 99.3 266.3 1,054.0 2,679.1 4,973.1 4,870.1 Administrative expenses 10.6 14.1 3.4 3.8 5.7 9.3 16.4 20.6 Salaries 6.8 10.4 13.1 18.1 24.5 40.2 6b. 72.4 Depreciation 0.7 0.7 0.7 0.7 0.7 0.8 0.8 0.8 Other 3.1 3.0 0.6 1.1 1.2 i,Ooi.OA./ 9.5 3.2 Total Expenses 1,262.1 1,749.0 3,713.7 6,814.1 7,678.6 11,058.0 14,550.4 17,717.2 Profit before tax 415.9 765.2 746.2 1,256.0 1,504.7 1,936.5 2,726.8 5,058.5 Taxes paid 147.6 279.0 283.5 477ol 713.5 735.7 1,035.9 1,921.7 Profit after tax 268.3 486.2 462.7 778.9 791.2 1,200.8 1,690.9 3,136.8 1/ Under the Ministry of Finances orders dated January 10, 1980, interest on loans totalling TL40.1 billion, which was accrued but not paid by various SEEs during 1976-78, was written off under a general consolidation of SEE debts to other SEEs, including DYB.  IlL Mtillion) Turkeys Loan No. 1024-TU DYB; Balance 8ihets As of December 31 1974 1975 1976 1977 1975 1979 1980 1981 ASSETS Current Assets Cash and Deposits 62.6 107.8 169.4 68.4 646.5 11.1 161.3 444.9 Bonds 25.3 131.4 525.8 1,1UI.5 974.1 958.7 1,101.5 1,124.9 Accrued Interest 760.8 1,004.b 1,563.0 2,166.0 3,085.b 4,362.7 4,077.0 4,971.3 Accounts ReceivabLe 3.7 292.4 518.5 491.5 826.3 425.6 948.3 1,387.7 Current Maturities 4,462.b 9,945.9 9,390.5 9,567.1 12,543.2 12,673.3 12,434.6 6,649.0 Other 0.8 0.7 U.8 0.8 3.0 6.0 0.5 0.6 Total Current Assets 5,315.8 11,482.5 12,168.0 13,395.3 18,078.7 18,544.4 18,723.8 14,578.4 lnan Portfolio Working Capital Loans 2,756.3 1,869.6 4,479.6 4,981.1 447.0 367.6 314.0 - Inve. .-ent Loans Local Currency NA 1l 22,723.5 29,674.9 38,324.3 45,948.7 54,104.6 65,082.8 105,260.1 Foreign Currency NA 11 85.3 3,203.6 4,245.3 5,133.1 8,180.9 14,146.9 19,562.9 Ibtal Investment Loans 17,120.1 22,808.8 32,878.5 42,569.6 51,081.8 62,285.5 79,229.7 124,823.0 Laans from managed Funds o Working Capical Loans NA NA I/ 10,749.1 15,274.7 5,575.9 9,286.1 2,76U.9 1,890.6 Investment Loans NA NA U/ 15,056.4 24,626.4 5,086.4 5,432.9 5,825.8 5,785.0 Total 6,548.4 13,853.3 25,8U5.5 39,901.1 U10,602.3 14,719.0 8,586.7 7,675.6 Gross Portfolio 26,424.8 32,276.7 63,163.6 87,451.8 62 131.1 77,372.1 88,130.4 132,498.o leest Current Haturities (4,462.6) (9.945.9) (9,390.5) (9,567.1) (12,543.2) (12,673.3) (12,434.6) (6,649.0) less: Provision for Losses (285.4) (423.4) (646.b) (769.0) (832.0) (995.5) (1,315.4) (1,73b.2) Net PortfoLio 21,676.1 21,906.7 53,12b.5 77,115.7 48,755.9 63,703.3 74,380.4 124,113.4 Fixed Assets 19.3 18.8 18.3 17.9 17.4 17.4 17.4 lb. TOTAL A5SSTS 27,U11.2 33,405.8 65,312.8 90,528.9 66,802.u 82,25.1 93,121.6 138,708.4 LIABILITIES oCrrent Liabilities Interest payable 692.8 927.2 1,453.7 2,189.6 3,148.0 3,940.1 3,822.3 5,311.4 Accounts payable 440.2 1,051.3 708.2 807.5 734.5 372.9 377.0 1,524.5 Current Maturities 1,670.0 1,539.0 780.9 1J156.5 2,058.7 2,788.1 2,984.Z 1,757.9 0 c Total Current Liabilities 2,803.0 3,517.5 2,942.8 4,153.6 5,941.2 7,101.1 7,183.5 8,593.8 p ~~~~~~~~~ 4i '.  As of December .1 1974 1975 1976 1977 1978 1979 1980 lgdl Long Term Debt DYB Bonds 14,417.1 17,8 31.0 25,816.0 38,048.1 43,346.5 49,718.6 54,953.0 63,709.0 Treasury Loans 1,467.7 1,195.3 17,6d1.6 30,958.4 2,805.4 6,137.2 2,674.9 5,640.U IFF Funds taken over 2/ 5b8.7 471.8 374.1 357.3 581.6 507.L 426.3 343.3 Central dank Loans 6,133.9 7,0b8.9 7,068.9 7,054.9 3,097.6 5,007.0 5,640.0 5,640.0 Foreign Currency Loans - 85.3 3,212.9 4,122.0 5,053.2 7,851.6 13,813.8 18,830.9 Other Borrowing 250.0 1,199.0 1,420.4 1,423.8 2,212.4 891.2 1,891.7 22,576.2 Gross Long Term Debt 22,837.4 27,851.3 55,573.9 81,964.5 57,096.7 70,112.8 79,399.7 116,739.4 leos: Current Haturities (1,670.0) (1,539.0) (1,252.4) (1,156.5) (2,058.7) (2,788.1) (2,984.2) (1,757.9) Ne t Lon Torm Debt 21,167.4 26,J12.3 54,321.5 80,508.0 55,038.0 67,324.7 76,415.5 114,981.5 Central Bank Deposits 1,297.0 1,297.0 4,963.0 2,179.3 1,289.9 1,289.9 1,289.9 2,074.9 EQUITY Paid-in Capital 1,231.6 1,400.6 1,771.3 2,000.0 2,000.0 3,083.1 3,499.9 3,499.9 Reserves and Surplus 512.2 880.6 998.2 1,388.0 2,582.9 3,466.3 4.732.8 9,558.3 u 2 Total Equity 1,743.8 2,281.2 2,769.5 3,388.0 4,582.9 6,549.4 8,232.7 13,058.2 TOTAL LIABILITIES & EQUITY 27,011.2 33,405.8 65,312.8 90,528.9 6b,852.0 82,265.1 93,121.6 138,708.4 M x 1I DYB's published Financial Statements for these years do not provide breakdown of totals. 2/ The series of figures for 1FF funds taken over is not consistent between 1977 and L978 due to a change in classification.  TURKEY - LOAN NO. 1024-TU DYB: ARREARS (Principal and Interest aa of December 31) (TL. 00U) 1974 1975 1976 1977 1978 1979 1980 1981 Machinery and Chemical Industries Co. 16,411 13,688 1,675 - 195,207 221,450 93,402 - Etibank 41,934 - 16,244 452,919 1,898,546 2,438,327 2,840,590 1,268,851 State Railways 227,974 118,b58 211,595 141,962 405,241 560,946 373,276 281,936 Heat and Fish Co. - - - 15,773 548,74 6,714 138,204 - Sumerbank 115,786 7,878 17,804 125,808 345,872 599,396 148,303 254,366 Maritime Bank 100,029 68,352 96,036 68,434 296,542 437,448 345,490 12,924 Turkish Sugar Company 593 - - 28,877 585,707 - 501,089 - Cement Industry of Turkey 7,033 17,727 - 78,270 79,985 31,834 19,344 Post, Telegraphs and Telephone 1,645 - 23,543 61,810 1,041,311 - - - Turkish Coal corporation 16,553 29,205 155,230 510,744 1,151,080 1,502,812 345,125 267,186