Turkey - Industrial Enterprise Projects

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 8614 PROJECT PERFORMANCE AUDIT REPORT TURKEY DEVLET YATIRIM BANKASI (DYB) II AND III (LOANS 1379-TU AND 1998-TRU) MAY 4, 1990 Operations Evaluation Department This document has a restricted distribution and nmay be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRTCY EQUIVALENTS (Annual Averages) 1978: US$1 - TL 24.3 1979: US$1 - TL 31.1 1980! US$1 - TL .76.0 1981: US$1 - TL 111.2 1982: US$1 - TL 162.6 1983: US$1 - TL 225.5 1984: US$1 - TL $66.7 1985: US$1 - TL $22.0 1986: US$1 - TL 474.5 1987: US$1 - TL 857.2 1988: US$1 - TL 1,453.1 ACROMS AIP - Annual Investment Program CPP - Country Program Paper DFC - Development Finance Company DYB - Dev1et Yatirim Bankasi FERIS - Foreign Exchange Risk Insurance Scheme GOT - Government of Turkey ICB - International Competititve-Bidding KfW - Kreditanstalt Fuer Wiederaufbau OED - Operations Evaluation Department PCR - Project Completion Report PPAK - Project Performance Audit Memorandum PPAR - Project Performance Audit Report PR - Presideut's Report SAL - Structrual Adjustment Loan SAR - Staff Appraisal Report SECAL - Sector Adjustment Loan SEE - State Economic Enterprise SPO - State Planning Organization SYKB - Sinai Yatirim ve Kredi Bankasi TECB - Turkish Export Credit Bank TSKB - Turkiye Sinai Kalkinma Bankasi FISCAL Government: January 1 - December 31 DYB: March 1 - February 28 FOR OFFICIAL USE ONLY THE WORLD BANK Washington. D.C 20433 US A O1tce of Deector.Cner Operafn lvaltil"n May 4, 1990 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Performance Audit Report on Turkey Dev1et Yatiria Bankasi (DYB) II and III (Loans 1379-TU and 1998-TU) Attached, for information, is a copy of a report entitled "Project Performance Audit Report on Turkey - Devlet Yatirim Bankaei (DYB) II and III (Loans 1379-TU and 1998-TU)" prepared by the Operations Evaluation Department. Yves Rovani by Ram K. Chopra Attachment This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authoriution. FOR OFFICIAL USE ONLY PROJECT PERPORMANCE ADIT REPORT DEVLET YATIRIM BANKASI (DYB) II A3D III (LOANS 1379-TU and 1998-TU) TABLE OF CONTENTS PREFACE ................................................ ......... i EVALUATION SUMMARY ..................................... .......... 1iii PROJECT PERFORMANCE AUDIT MEMORANDUM I. BACKGROUN ................................................ I Country Macroeconomic Setting ........................... 1 Overall Bank Strategy for Industry in Turkey ............ 2 Loan Objectives, Design and Scope ....................... 2 II. PROGRESS IN MEETING OBJECTIVES ............................ 4 Progress in Institution-Building ........................ 4 External Constraints and Operational Autonomy ........... 5 III. OPERATIONAL AND FINANCIAL PERFORMANCE ..................... 5 DYB Operations and Financial Position ................... 5 Utilization of Bank Funds ............................... 6 IV. FINDINGS AND LESSONS ...................................... 7 Overall Assessment ...................................... 7 Lessons ................................................. 7 PROJECT COMPLETION REPORT PART I: PROJECT REVIEW FROM BANK'S PERSPECTIVE ................ 13 1. PROJECT IDENTITY .......................................... 13 2. BACKGROUND ................................................ 13 State Economic Enterprises (SEEs) ....................... 13 Role of DYB in Financing SEEs ........................... 14 Bank Strategy ........................................... 15 3. PROJECT OBJECTIVES AND DESCRIPTION ........................ 16 4. PROJECT DESIGN AND ORGANIZATION ........................... 17 5. FINANCIAL INTERMEDIARY .................................... 20 This document has a restricted distribution and may be used by recipients only in the performance of their oficial duties. Its contents may not otherwie be disclosed without IFC authorization. TABLE OF CONTENTS (cont'd) Page No. PART I: PROJECT REVIEW FROM BANK'S PERSPECTIVE (cont'd.) 6. PROJECT IMPLEMENTATION .................................... 24 7. SUBPROJECT RESULTS ........................................ 25 8. BANK PERFORMANCE .......................................... 27 9. BORROWER'S PERFORMANCE .................................... 27 10. PROJECT DOCUMENTATION AND DATA ............................ 28 PART I: ATTACHMENT 1. Subproject Performance .................................... 29 PART II: PROJECT REVIEW FROM BORROWER'S PERSPECTIVE ........... 33 1. THE ROLE OF SEES IN THE TURKISH ECONOMY ................... 33 2. THE ROLE OF DYB ........................................... 34 3. THE OBJECTIVES AND THE ACHIEVEMENTS ....................... 35 4. CONCLUSION .................................... .......... 35 PART III: STATISTICAL INFORMATION ............................. 37 Annex 1 Table 1: Related Bank Loans .............................. 37 Table 2: Project Timetable ............................... 38 Table 3: Loan Disbursements and Related Information ...... 39 Table 4: Use of Basic Resources .......................... 40 Table 5: Staff Inputs .................................... 41 Annex 2 Table 1: Gross National Product Growth Rate .............. 42' Table 2: Sectorial Shares in Gross National Product ...... 43 Table 3: Sectorial Shares in Fixed Capital Investments ... 44 Annex-3 Table 1: SEE's Investment and the Share of DYB ........... 50 Table 2: Actual Income Statements 1977-1987 .............. 51 Table 3: Actual Balance Sheets 1977-1987 ................. 52 Table 4: Actual Financial Ratios 1977-1987 ............... 53 Annex- 4 Table 1: Listing of Subprojects Financed under Loans ..... 54 Table 2: Projected vs. Actual Operations 1977-1987 ....... 55 Table 3: Performance of Subprojects ...................... 61 PROJECT PERFORMANCE AUDIT REPORT TURREY DEVLET YATIRIM BANKASI (DYB) II AND III (LOANS 1379-TU and 1998-TU) PREFACE This is a Project Performance Audit Report (PPAR) on the second and third loans to Devlet Yatirim Bankasi (DYB). Loan 1379-TU (DYB II) in the amount of US$70.0 million was approved on March 15, 1977. It was closed on December 31, 1982, 21 months behind schedule. The last disbursement was on August 31, 1983; US$6.49 million was cancelled. Loan 1998-TU (DYB III), also in the amount of US$70.0 million, was approved on May 21, 1981. It was closed on December 31, 1988, two years behind schedule. The last disburse- ment took place on July 5, 1989; US$3.47 million was cancelled. The PPAR consists of the Project Performance Audit Memorandum (PPM) prepared by the Operations Evaluation Department (OED) and the Project Completion7 Report (PCR). The PCR was jointly prepared by the Industry Operations Division of the Europe, Middle East and North Africa Regional Office (Parts I and III) and DYB, the Borrower (Part II). The PPAM is based on the PCR, the Staff Appraisal and President's Reports, the loan documents, the summaries of the Executive Director's meetings at which the projects were considered, a study of project files, and discussions with Bank staff. The PCR provides a good account and assessment of the project experience, and discusses the performance of the Bank and the Borrower. The PPAM elaborates on the aspect of the organizational set-up for DYB operations which led to the failure of Bank loans to DYB. Following standard OED procedures, copies of the draft PPAR were sent to the Government and the Borrower for comments, but none were received. - iii - PROJECT PERFORMANCE AUDIT REPORT DEVLET YATIRIM BANKASI (DYB) II AND III (LOANS 1379-TU and 1998-TU) EVALUATION SUMMARY Intr2duction 1. The two loans covered by this report were the second and third to Dev1et Yatirim Bankasi (DYB): Loan 1379-TU (DYB II) was approved in 1977 and Loan 1998-TU (DYB III) in 1981. The first loan to DYB (Loan 1024-TU) was approved in 1974, and was reviewed in the Project Completion Report (PCR) dated February 10, 1984. The two loans under review straddle a period of economic transition in the country. Economic difficulties led to a fall in GDP in 1979 and 1980, and the subsequent stabilization measures bore fruit after 1984 when GDP growth, after turning positive in 1981 to 1983, accelerated. The main change in policy, relevant to the two loans under review in this report, was the Government's decision to minimize its direct investment and involvement in industry. This implied a reduction in invest- ment by the Government in State Economic Enterprises (SEEs) and a re-thinking of the future role of DYB in the economy (PPAM, paras. 1-6). Objectives 2. The two loans had completely different objectives. DYB II was a continuation of the Bank's first loan to DYB, the objective being to turn DYB into an autonomous development finance company (DFC) on the Bank model - - that is, a DFC independent of Government influence which would undertake financing of projects purely on viability considerations and take corrective action against managements and projects in case of inadequacies during imple- mentation and operation. To this end, various requirements were specified: for example, referral of projects by SEE sponsors to DYB at the same time as to the State Planning Organization (SPO); establishment of contracts not only between DYB and the SEEs but between DYB and project managements; and exten- sion of uniform appraisal and supervision standards to all DYB projects irrespective of their sources of funding (PPAM, paras. 7-8). 3. A 1980 OED Report entitled Sector Operations Review: Ldustries and DFC Program in Turke (Report No. 3077 dated July 18, 1980) pointed out that DYB was not achieving the above objective, given its institutional position within the country's SEE system. Moreover, a change in Government in Turkey, with new thinking on the role of direct investment by Government in industry, raised issues as to the future of DYB as an institution. In view of this, DYE III was not a DFC-type of line of credit, but a loan to provide funds to certain preselected SEE projects for which DYB was to make detailed appraisals, carry out supervisions, and disburse Bank funds, in effect, acting almost as a local agent for the Bank. DYB III also provided that the Government would undertake a study on the future role of DYB (PPAM, paras. 9-11). -iv- Implementation Experience 4. The two loans moved slowly, because of delays both in the approval of subprojects (DYB II) and in their implementation (both loans, but in par- ticular, DYB III, despite the preselection of the projects by the Bank before its approval) (PPAK, paras. 17, 19-21). Results 5. The two loans financed in all 28 projects, some of which are still under implementation. There were extensions of Closing Dates and cancel- lations of small amounts under both the loans (PPAM, para. 18). 6. The number of projects evaluated yearly by DYB declined after 1978 and, after the change in Government policy on SEEs in 1980, DYB's operations stagnated. Total disbursements, while increasing in nominal terms, showed a decline in real terms (PPAM, para. 15). 7. DYB's financial performance also declined, and by 1987 it was nearly bankrupt. In that year, DYB was converted into an export credit bank to operate the Government's export incentive programs, and its project activi- ties were limited to supervision. The Government, however, never carried out the study, required under DYB III, to determine the future role of DYB (PPAM, para. 16). Sustainability 8. DYB built up the technical competence for appraising and supervising projects. However, the sustainability of DYB as a DFC, as envisaged by the Bank under its first two loans, was almost a non-starter, given the institu- tional structure and relationships within the country, particularly between SPO, the Treasury, SEEs and DYB. DYB had no real powers delegated to it by the first two organizations, and its relationship with the SEEs was essen- tially a subordinated one where the SEEs could always bypass DYB. The Bank came to recognize this situation only in 1980, following the OED report on Sector Operations (PPAM, paras. 12-14). Findings and Lessons 9. Lending to DYB through DYB I in 1974 was a novel experience for the Bank as it was seeking not only to provide funds to a State-owned DFC but also for on-lending by it to State-owned enterprises. The Bank, however, did not have a clearly defined long-term strategy for the purpose. Such a strategy would have required the Bank to do preliminary work on the legal and institutional framework in the country and the changes required to meet its objective of converting DYB into a DFC, to lay down guideposts for changes to be implemented at each stage, to provide for adequate autonomy for DYB's executive head, and to provide for a review within the Bank, in the light of experience under the first Bank operation, to determine whether there was adequate progress to justify a second operation. The attempt to tinker with the system, to seek procedural changes to overcome institutional inflexibilities, was bound to fail, as it did in the case of DYB. The lesson from this experience is that for experimental or new projects involving repeat operations, the Bank should devise a long-term strategy, with guide- posts for successive loans, which should be reviewed in depth and revised in the light of experience at the time each new loan is considered. Further, Bank loans formed a small part (4% to 6%) of DYB commitments, and gave the Bank little influence over DYB activities (PPAM, paras. 24-32). 10. Both loans must be considered failures in regard to achieving their main objectives -- financing of viable and efficient SEE projects, improving the SEE system, and turning DYB into an effective DFC. The performance of the Bank-financed subprojects was poor. While the two loans did help to improve DYB's appraisal and supervision capabilities and to increase aware- ness within DYB and the Government of the need to ensure an efficient SEE investment process, the projects did not contribute to an improvement in the SEE system and did little to turn DYB into an effective DFC (PPAM, paras. 22-23). PROJECT PERFORMANCE AUDIT MEMORANDUM DEVLET YATIRIM BANKASI (DYB) II AND III (LOANS 1379-TU and 1998-9)- I. BACKGROUND Country Macroeconomic Setting 1. The period between the approval of the second loan to Dev1et Yatirim Bankasi (DYB) (Loan 1379-TU, hereafter referred to as DYB II) in 1977 and its closing in 1982 was marked by growing economic difficulties in Turkey, with GDP declining in 1979 and 1980 and the introduction of a program of stabili- zation, supported by the Bank, in 1980. The period between the approval of Loan 1998-TU (referred to as DYB III) and its closing, 1981 to 1988, was marked by the gradual recovery of the economy to 1983 and rapid GDP growth (more than 6% except for 1985) in subsequent years. These developments were described in detail in an earlier OED reportl and are updated in the attached Project Completion Report (PCR) (see, in particular, Part III, Annex 2, Tables 1 to 3). 2. The State played an important role in Turkey till 1980, particularly in the industrial and financial sectors, in initiating and accelerating economic growth in the country. State Economic Enterprises (SEEs) were a major instrument in the Government's strategy of industrialization prior to 1980. The expected role of SEEs in the manufacturing sector initially was to accelerate the pace of industrialization in the country, and, later on, to broaden and deepen the industrial structure through investment in heavy industries, in particular, iron and steel and petro-chemicals. While the strategy met these objectives, the resort to heavy industries led to capital- intensive development and non-viable investments, worsened by inefficient, management of enterprises. The role of SEEs in the Turkish economy is more fully described in the PCR (Part I, paras. 2.01-2.03 and Part II, paras. 1.01-1.05). 3. DYB was set up by a separate statute (Law 441) in 1964. It- main function was to disburse Treasury funds to SEEs for projects approved by the State Planning Organization (SPO), and to supervise them during the construc- tion period. In effect, therefore, it acted as a disbursement and super- vision arm of the Government for approving and financing SEE projects. The role of DYB in the SEE system is described in detail in the PCR (Part I, paras. 2.04-2.05, Part II, paras. 2.01-2.05, and Part III, Annex 3, Table 1). I/ Project Performance Audit Report: Turkey - Five DFC and Industrial Sector Proiects, Report No. 7883, June 29, 1989, paras. 1-29. * 2 - Overall Bank Strategy for Industry in Turkey 4. The Bank had, by the early 1970s, provided 11 loans to Turkiye Sinai Kalkinma Bankasi (TSKB), a private sector development finance corpany (DFC) set up in 1949 to on-lend funds to industrial units in the private sector. Such lending was intended to strengthen the industrial process in the country by broadening entrepreneurship and ensuring, through the financial system, the undertaking of viable projects. 5. In the early 1970s, the Bank took two separate but connected init- iatives to expand its role in financing industry in Turkey and to help insti- tution-building in the industrial sector. At one level, the Bank agreed to provide funds directly to large State-owned industrial enterprises in order to improve their efficiency and management practices. At another, it sought to provide funds to DYB for on-lending to relatively smaller enterprises in the State sector, with a view to making it a full-fledged financial inter- mediary and not merely an agent of the Government. In providing funds to DYB, the Bank expected to reach SEEs which, because of size or other reasons, it could not finance directly, thereby seeking to achieve the same institu- tion-building objectives in relation to these smaller enterprises which the Bank was doing by providing loans directly to larger State-owned enterprises. The Bank's first loan to DYB in 1974, six years after the Bank's entry into public sector DFC financing elsewhere, was different in character to other Bank DFC loans in that not only was DYB State-owned but it also financed State-owned industrial enterprises. These initiatives were intended to help the Bank to enhance its financing coverage of the industrial sector in Turkey.2 6. A PCR (Report No. 4922, dated February 10,1984) reviews the experi- ence with Loan 1024-TU, the first loan to DYB. By this time the third and last loan to DYB had already been approved, and DYB had become a moribund institution. That PCR noted the institutional failings of DYB and the failure of the Bank's attempts to convert it into an effective financial intermediary for SEE financing. The attached PCR on DYB II and III upda'tes the situation in Turkey, describes the utilization of funds under the two loans, and refers to the conversion of DYB into an export credit bank. Loan Objectives, Design and Scope 7. DYB II: The first loan to DYB had as objectives the financing of relatively smaller SEE projects (the large projects being financed directly by the Bank) and, as part of the Bank's DFC institution-building effort, the strengthening of DYB's appraisal and supervision capacity. There had been various deficiencies under DYB I, in particular DYB's reluctance to analyze SEE managements, inadequate supervision (particularly post-construction) of subprojects, and failure to meet audit requirements. However, the Bank's overall assessment was that the first loan was "admittedly an experiment in 2/ Later in the seventies, the Bank was to provide funds to other financial institutions and commercial banks in Turkey, thus broadening access of small and medium industries and of units located in various regions to its funds. - 3 - institution-building (with) clearly favorable results."3 Performance under the first loan was considered sufficiently adequate to justify the second loan, DYB II being intended to correct the deficiencies and to further the institution-building objectives set under the first loan. 8. The Bank's continued association with DYB was also expected to be a catalyst in the eventual reform of the SEE system. One of the objectives of DYB II was to strengthen DYB's role "in the Government's decision-making process on SEE investments.. .and DYB's influence in screening out and modifying questionable (SEE] investments." To achieve this, changes were introduced in the design of DYB II to require that DYB be brought in at an early stage of the investment process to make it effective in the approval of investment projects. For this purpose, DYB was to receive summaries of investment proposals at the same time as SPO, and it was to have a right to communicate to SPO its views on the proposals. Further, the Bank specified that both the management of the project and of the SEE proposing the project be required to sign the loan agreement with DYB, so as to make the project management responsible to DYB for its implementation and operation. In addi- tion, to support less capital-intensive investment, it was provided that the cost of subprojects should not exceed US$50,000 per job created. 9. DYB III: The new context after 1980 comprised a major change in economic policy in Turkey, in particular in relation to the State's role and intervention in industry. This involved a gradual withdrawal of the State from direct participation in industry, an insistence on SEEs becoming self- supporting in their investment and production operations, a more general shift in economic policy towards financial and industrial liberalization, and export orientation in economic activity. However, even as the shift was being made, the carry-overs from pre-1980 investments needed to be monitored and supervised. In the light of the Government measures and the findings of an OED Sector Operations Review,5 the rationale for further Bank lending to DYB was limited. DYB III, approved in May 1981, reflected the changed focus and needs of Turkey in various ways: (i) it provided funds to DYB to com- plete six specific ongoing projects in sugar, iron and steel and copper sub- sectors, initiated by three SEEs, which had undergone a preliminary scrutiny by the Bank; (ii) it required DYB to prepare a second, more thorough appraisal of these projects and to improve its supervision and monitoring of its overall portfolio; and (iii) it provided for a government study of DYB's future role in the light of the Government's economic initiatives since 1980 and the environment generated by them.6 This last was not carried out, initially because the Government asked for time for its economic measures to work out and later as DYB was converted into an export credit bank - - the I/ Paras. 6.01-6.05, Staff Appraisal Report (SAR), No. 1300-TU, dated December 10, 1976, on DYB II. / go cit., para. 6.02. 5/ Sector Operations Review: Industries and DFC Program in Turkey (Report No. 3077, dated July 18, 1980). g/ See paras. 3.09-3.10 of SAR No. 3390-TU, dated April 20, 1981, for detailed terms of reference. Turkish Export Credit Bank (TECB). The Bank's caution about the future role of DYB was fully justified: DYB was reorganized in August 1987 (paras. 5.08-5.10, Part I of the PCR). The Government and the Bank are currently in the process of re-examining the overall focus of the successor organization. 10. DYB III has therefore to be interpreted strictly as a holding opera- tion, intended to provide funds to a set of predetermined projects already under implementation. The wrapping of the funds with institutional objec- tives relating to DYB was intended only to convey a sequence, the real heart of the loan being the proposal to re-examine DYB's role within the new environment which the Government, with the support of the Bank, had started building in 1980. 11. Despite its experience and the strictly limited role envisaged for DYB under the third loan, the Bank had not given up on its objectives for DYB's future: "In view of the difficulties encountered in the institution- building efforts under the first two DYB projects, it must be recognized that DYB's growth into a fully autonomous and effective DFC can only be an evolu- tionary process. Nevertheless, the effort is worthwhile."7 This is arguable logic: the in-titution-building objective had little relevance in view of the comments in the OED Sector Report and in the light of the changed circum- stances and policies in Turkey after 1980. The technical-capacity-building obiectives (in particular, improvement of appraisal capacity) were already scaled down to the extent the subprojects to be financed under DYB III were already under implementation and the Bank mission had made a broad pre- liminary review of these subprojects for financing under the loan; DYB was left only to make a detailed appraisal of them and to supervise their imple- mentation. In this sense, DYB III was not a DFC line of credit but a loan for a preselected group of SEE projects, channelled through DYB for detailed appraisal and for disbursement and supervision convenience. (See paras. 3.01-3.06 and 4.01-4.09 of Part I of the PCR for a more detailed description and analysis of the Bank rationale on objectives and design of the two projects.) II. PROGRESS IN MEETING OBJECTIVES Progress in Institution-Building 12. DYB's success in meeting the objectives under the two loans being reviewed has to be considered at two levels: (i) at the technical competence level and (ii) at the institutional role level. (i) At the technical level, under both DYB II and DYE III, DYB built up an adequate capacity for project appraisal. The main Bank comments on subproject appraisals submitted to it for review related to inadequacy of market analysis and sometimes inadequate estimates of capital and operating costs. The main 2/ Para. 75, President's Report (PR), No. P-3051-TU, May 4, 1981, on DYB III. failure the Bank noted was DYB's reluctance to comment upon management, a reluztance reflecting its relative position in the SEE system. Under both loans, progress in building up supervision capacity, particularly in ensuring efficient imple- mentation of subprojects and taking corrective action for effective use of funds, appears to have been limited. (ii) The progress under the two loans in terms of building up DYB as an effective instrument in the country's administrative system to ensure efficient and viable investments by SEEs was limited, in fact negligible. While DYB made competent appraisals of projects, in effect seeking to determine the viability of such projects, it could not ensure their efficient implementation or ensure action by the SEE (or, if necessary, by other Government organs) to bring about management and system changes to do so. DYB's management did not have the position or status, in rela- tion to other SEEs, to be able to do so. External Constraints and Operational Autonomy 13. DYB II retained the Bank's DFC developmental objectives for DYB, seeking to make it ultimately an autonomous DFC in the Bank mold. To this end, it specified clear requirements (regarding project referral, agreement signature requirements for agreements, and others, mentioned earlier). These requirements were met in formal terms, DYB claiming to have modified SEE projects to improve their viability or rejecting them on grounds of non- viability. However, the essential constraints on its operational autonomy lay in external factors, namely its relative position within the Government organizational system involving SPO, the Treasury, SEEs and itself as a financier of SEEs. This is dealt with in detail in the final Section of this PPAM. 14. The failure to reach Bank objectives was most evident in the fact that DYB's performance continued to deteriorate even after the 1980 struc- tural adjustment measures, that DYB became bankrupt and inoperative in its old role and had to be transformed in 1987 into a different entity with new functions, and that a search is still on for an identity and role for its successor organization (paras. 5.04, 5.06-5.10 of Part I of the PCR discuss this conversion further). III. OPERATIONAL AND FINANCIAL PERFORMANCE DY Operations and Financial Position 15. By 1978, Turkey was facing strong economic difficulties, which were compounded by the rise in oil prices in 1979-80. This influenced adversely the Government's fiscal position, and, as a result, its ability and willing- ness to finance SEEs (and, therefore, DYB). The number of projects evaluated by DYB declined from 77 in 1978 to 60 in 1979 and 55 in 1980. DYB's loan disbursements were TL 8.5 billion in 1978, TL 13.7 billion in 1979 and TL 17.5 billion in 1980, in nominal terms, but actually declined substan- tially (370) in real terms over the period. This decline continued in the 1980s (except for a spurt in 1981) with the change in Government policy away - 6 - from State investment and the new emphasis on stabilization and structural reform, and culminated in DYB being converted into an export credit bank in 1987. 16. Summaries of DYB's financial statements for 1977 through 1987 are provided in Annex 3, Tables 2 and 3, Part III of the PCR. These are diffi- cult to interpret as DYB's operations were in both local and foreign currencies, and each year's inflows and outflows were of funds bearing different purchasing powers and exchange values. However, DYB was clearly in a declining phase, particularly after 1979, and the general structural adjustment measures, instead of stemming the decline, seem to have accelerated it. The PCR notes: "At the end of 1987, DYB was no longer solvent. ... While the PCR mission could not obtain any written information on the performance of the portfolio, unofficial estimates are that as much as 70% of the existing DYB portfolio is non-performing -- more than twice DYB's capital" (para. 5.06); and "By mid-1987, the Government was faced with a dying DFC and a problem portfolio" (para. 5.08). Subsequently, DYB was given a different role with its old functions being performed on a caretaker basis. The PCR provides further data on the operations and financial position of DYB during the period before its conversion (Part I, paras. 5.01-5.06 (including Tables 1 and 2) and Part III, Annex 3, Tables 2-4). Utilization of Bank FUnds 17. The PCR provides fairly complete data on the use of funds from the Bank loans (paras. 6.01-6.06 and 7.01-7.02 of Part I). The performance under DYB II was affected by the economic difficulties in Turkey after its approval, and under DYB III, by problems arising from the corrective economic measures taken by the Government -- both of which created considerable uncer- tainties, particularly for State organizations like DYB and the SEEs which derive their mandate, their role (and their problems) from the Government. 18. The free limit for subprojects under DYB II was US$2 million. In all, 20 subprojects were financed under the loan, twelve of them above the free limit; the size distribution of the use of funds was skewed by a single subloan (US$20 million) to finance an overrun in a SEE project financed directly by the Bank (para. 6.02, Part I of the PCR). The commitment date under the loan had to be extended by 21 months, an amount of US$6.5 million was cancelled, and the disbursement of the balance took four years longer than projected. 19. As mentioned earlier, DYB was only a channel for Bank funds under DYB III, with the subprojects under it having been initiated earlier and pre- appraised by the Bank. DYB performed its limited role of providing detailed appraisal and effective supervision well; disbursements under the loan, however, took longer than projected, the final disbursement being made only in July 1989, eight years after loan approval, and an amount of US$3.47 mil- lion was cancelled. 20. The subprojects under both loans showed high economic and financial rates of return (70% and more) at the time of appraisal by DYB, which raises issues of the accuracy of the assumptions made; for DYB III subprojects, such high returns reflected the marginal returns on projects which were already -7- under implementation and were being financed towards completion. Given the delays in completion, increases in capital and operating costs, and weakened markets following the stabilization policies of the 1980s, actual financial rates of return calculated for 15 subprojects were much lower but still acceptable in 14 cases. A subjective assessment of subprojects financed under DYB II and III is given in the PCR (Table 3 in Part I). The overall performance of these subprojects, in terms of implementation and operations, was quite similar, despite the difference in their appraisal process, as the environment was affected by economic difficulties and structural adjustment measures which, given their ownership and the nature of industries, particu- larly affected the SEEs. The Bank supervision of the two loans (and of subprojects under DYB III) was frequent and detailed. The supervision reports pointed out weak points in DYB's appraisal and project monitoring practices. However, they do not make a mention of the weak position of DYB within the Turkish organizational structure which prevented it from acting as an effective DFC, an aspect more related to project design than of super- vision by Bank missions. 21. The major objective under DYB III, namely identification of a future role for DYB through a study, was not achieved, the study being postponed initially to allow structural adjustment measures to take hold, and then later given up, leading to the ad hoc transformation of DYB in 1987 (paras. 5.08-5.09, 6.06, 8.02, Part I, PCR). The Bank and the Government are currently in discussion about the future of the successor organization (para. 5.10, Part I, PCR). IV. FINDINGS AND LESSONS Overall Assessment 22. The Bank's initiative in extending its DFC operations in Turkey to DYB must be considered a failure due both to exogenous circumstances and to internal inadequacies. The external events are easier to enumerate and describe, mainly the economic crisis in Turkey after 1978, leading to struc- tural adjustment measures after 1980 which seem to have left DYB on the sideline. 23. However, the Bank's adventure with DYB does reflect deficiencies in the quality of the Bank's background work and its game plan in relation to the Government and DYB - - deficiencies which were brought out early in 1980 in the OED Sector Operations Review; by that time it was too late for the Bank to take corrective action. DYB III was essentially a holding operation, which, besides financing high-return subprojects already under implementa- tion, was intended to buy time to re-think the future role of DYB in the new environment in Turkey. Despite its initiatives in financing general and financial sector adjustments, the Bank appears to have failed to help Turkey define a new role for DYB. Lessons 24. The major lesson that the Bank loans to DYB bring out relates to the strategy to be adopted for such operations in the future. The rationale for -8- the Bank's initial decision to undertake financing of DYB was legitimate. To reach the broad Bank objective of making DYB a DFC within the Bank definition of a financial intermediary, however, would have required the Bank to obtain the Government's agreement in principle to fundamental organizational and legal changes which would shift SPO and Treasury responsibilities to DYB, and to devise an evolutionary long-term strategy to ensure their phased implemen- tation; the Bank failed to do either. 25. The Bank's assistance to a DFC generally involves a series of opera- tions over a number of years - - as an extreme, TSKB has received 13 loans over 30 years. Assuming that the Bank expected to follow its normal repetitive DFC-lending pattern with DYB, it should have laid out, at the time of the first loan, a long-term strategy for DYB covering a number of opera- tions. Further, it should have provided guideposts for objectives sought and achievements expected under successive phases (preferably each succeeding operation). However informally framed and flexibly implemented, such a strategy and guideposts would have provided more defined norms for subsequent loans, allowing for a more informed judgment of DYB's performance, rather than the vague and optimistic assessment which led to the approval of the second loan. 26. Further, especially in the case of an experimental operation like this one, it is desirable that an in-depth analysis be made between the first and second operation, to review the experience in the light of the Bank's initial expectations, rather than mounting a second loan appraisal based only on past operations, as was done for DYB II. Such an assessment would need to focus on whether the changes in the environment necessary for the continua- tion of the experiment had been carried out, and to reach a judgment on whether the progress under the first operation justified continuing with the experiment, and, if so, with which objectives and under what conditionali- ties. Such a review would be feasible and appropriate even if there existed no predetermined strategy as suggested in the previous paragraph. 27. The arrangement prior to 1964 when DYB was formed -- and which continued after the formation of DYB - - was that SEEs approached SPO foi their financial needs and, on obtaining SPO approval, received their allo- cation of funds from the Treasury as part of its budgetary operations. The formation of DYB in 1964 only provided a channel through which the funds were to be moved to the SEEs thereafter, although DYB was expected to review the projects before doing so. This role, however, was undermined by the fact that a SEE, aware that SPO had appraised its project and the Treasury had allocated the requisite funds, treated DYB's review as a procedural formality to be gone through, rather than as a process capable of improving project design, assisting in project appraisal, and so on. DYB lacked independent financial resources and only allocated predetermined funds to SEEs. The SEEs themselves were large and, predating the establishment of DYB, wielded strong leverage within the Government establishment. DYB's ability to refuse funds to projects had little impact, having the effect of only reducing the scale of its own operations and antagonizing the SEEs, without actually preventing the project from being financed anyway directly from the Treasury. 28. In addition to having a right to take an independent financing decision on the basis of its appraisal of a project, a financing intermediary should also have the right to seek corrective action from management (or to -9- change management) and to exercise foreclosure under the loan, if a project is not implemented or operated satisfactorily. In the context of the system in Turkey, and given its own position within the SEE system as only one of competing SEEs dependent upon SPO and the Treasury, DYB could not do this. With SEEs being responsible and loyal to their parent ministries and SPO, DYB had little say in ensuring effective SEE performance or in having them take corrective action when needed. These shortcomings were evident in the existing process of approving, financing, and implementing SEE projects in Turkey, which the Bank failed to take into account when it initiated the financing of DYB. 29. . Thus, when the Bank first undertook the financing of DYB, it should have examined in more depth the inter-institutional relationships surrounding DYB. This would have involved a more detailed examination of the character of DYB as an institution as set up under Law 441, of DYB's relationships with SPO (in regard to project approval) and the Treasury (in regard to access to financial resources), and of the leverage it had in relation to its client group. The DYB projects failed partly because of the Bank's lack of appreci- ation of the true nature of DYB as an institution and its place in the Government set-up; the fact that DYB itself was a SEE, formed under its own Act, was only a wrinkle in this relationship. 30. It is clear that the only way DYB could have become a DFC with the capacity to make independent financing decisions (and, thereby, foster viable projects and efficient management, prevent funding of non-viable projects and remove incompetent managements) would have been if SPO abdicated -- or at least delegated -- its SEE project approval function to DYB, and the Treasury did the same with its SEE financing function, with both agreeing to live by DYB decisions. This would also have required DYB's chief executive to have a sufficiently high status in relation to those of other SEEs to make DYB's deciAions effective in relation to such SEEs. The SPO and Treasury roles in relation to DYB would then be an audit role, as for any other SEE. In the context existing in Turkey before 1980, this goal was not likely to be easily achieved. The Bank's strategy of trying to reach it through persuasion and provision of finance was not effective. 31. Even after the first loan, DYB remained only an agent of the Govern- ment, not even an advisor to it, let alone an independent authority making its decisions effective, if necessary, by sanctions, as a financial institu- tion is expected to do. The Bank failed to observe, at the time of its appraisal of DYB II, the major issue of relationships essential to the suc- cess of the DYB experiment. Instead, it specified a number of requirements for subprojects. The Bank appears to have made an optimistic assessment of progress under DYB I and, on that basis, reflecting partly the triumph of hope over experience, it approved the second loan to DYB, expecting that the measures it had proposed would change the relationships among the SEEs and governmental organizations within the country. These, however, did not strengthen the position of DYB within the prevailing institutional structure as SEEs could bypass DYB by resorting to alternative sources or appealing to SPO. Without workable organizational principles, the Bank's attempts to tinker with the trivia of formalities had little practical significance or operational relevance. - 10 * 32. In sum, the following lessons emerge from this experience: (a) When the Bank initiates with an institution an operation which is likely to be repeated over a period of time, it needs to have laid out a clear strategy, extending over a number of operations, to reach its objectives. (b) It is necessary to have a detailed analysis, between the first and the second operation, of the progress made under the first in achieving its objectives, and a clear decision made whether the progress justifies continuing with a subsequent operation. (c) The Bank also appears to have overestimated in the case of DYB the leverage its loans provided. As they represented only 4% to 6% of DYB's total commitments between 1974 and 1980, they gave the Bank little influence over DYB's activities. - 11 - PROJECT COMPLETION REPORT TURKEY DEVLET YATIRIM BANKASI (DYB) II AND III (LOANS 1379-TU AND 1998-TU) July 28, 1989 Industry, Trade, and Finance Division Country Department I Europe, Middle East and North Africa Region - 13 - PROJECT COMPLETION REPORT TURKEY DEVLET YATIR11 BANKASI (DYB) 11 AND III (LOANS 1379-TU and 1998-TU) PART I : PROJECT REVIEW FRO BANK'S FERSPECTIVE 1. PROJECT IDENTITY Name : Second and Third Industrial Finance Projects (DYB II and III) Loan Numbers: 1379-TU and 1998-TU RVP Unit : EMENA Region Country : Turkey Sector : Industry (Industrial State Economic Enterprises - SEEs) 2. BACKGROUND State Economic Enterprises (SEEs) 2.01 Up to 1980, Turkey followed an import-substitution development strategy based on principles of a mixed economy. The Turkish economy grew rapidly during the 1970s at about 6% per year in real terms. Industry was the leading sector, whose growth at 7% per year was significantly above the average of other middle-income developing countries. A substantial degree of import substitution was achieved, even if at high cost. 2.02 A dominant feature of the Turkish industrial sector was the prominent role of the public sector. Since the early 1930s, some 400 SEEs had been gradually established in a range of activities to fulfill needs, which, the Government viewed, were not adequately met by the vrivate sector. In 1977, SEEs accounted for 50% of total manufacturing investment, over 40% of manufacturing value added, and 10% of non-agricultural employment. SEEs generated about 9% of the GDP and absorbed about 25% of gross fixed investment and 40% of public sector investment. Within the SEE system, the manufacturing sector accounted for the largest share (45%), followed by mining and energy (36%), transport and communications (11%) and agriculture (SA). SEEs had virtual monopolies in petroleum refining, steel, alcoholic beverages and basic metals and a large share of fertilizers, pulp and paper, cement, coal, sugar, machinery and chemicals. 2.03 In addition, SEEs were also to fulfill social objectives, such as regional development, income distribution, and employment creation. During the rapid growth of the 1970s, SEEs' sales more than doubled between 1973 and 1975 and their fixed investment increased from US$800 million (in 1973) to US$2.1 billion (in 1975). However, while some SEEs were well run, the majority showed losses because of price controls, rising labor costs, loss of qualified staff to the private sector and perhaps most importantly a multitude - 14 - of operational inefficiencies, possible only in a highly protected and monopolistic environment where enterprises had little business autonomy and accountability. The Government as well as the Bank were looking for means to improve the workings of the SEE system, which could eventually build up momentum for much wider administrative and legislative reforms. Role -f DYB in Financing SEEs 2.04 DYB was established in 1964 under the Special Law 441 to provide long-term credits, guarantees and other services to SEEs established under law 440.' DYB was a 100% Government-owned institution under the control of the Ministry of Finance. Its statutes and lending strategy, basically laid down in laws 440 and 441, were indicative and vague. Under administrative procedures governing investments in SEEs, the enterprises submitted their projects and financial requirements to the State Planning Organization (SPO) in July of every year. SPO, together with the Planning Council and the Ministry of Finance, reviewed the proposals, and based on budgetary allocations, approved the projects under the Annual Investment Program (AIP). DYB's participation, if any at all, was on an advisory basis. After acceptance of their investment proposals, the SEEs would approach DYB for funds--within the allocation made under the AIP--and submit their feasibility studies for appraisal. DYB was empowered to reject or request modifications of projects that it found unacceptable. More often than not, however, such projects could still be implemented by the Treasury from the budget. 2.05 This direct access to the Treasury by the SEEs, and possibility of bypassing DYB if necessary, coupled with the fact that DYB did not have the resources to finance any other than a small proportion of SEEs' needs, prevented DYB from exercising real influence over its borrowers.' Dependent on the Government for both project selection and funding, DYB could be better characterized as a channel of the Treasury rather than a bank. Its role in the system was ineffective and overshadowed by SPO in project approval and by the Treasury in their funding. DYB was also subject to the same regulatory regime as SEEs (under Law 440) and was allocated resources by the Government on the basis of the financial requirements of the SEEs. It had no independent resources. ' The SEEs in Turkey were divided into two groups. One was co-ered-by law 440 (mostly SEEs in manufacturing and other productive sector) and one under law 468 (mostly services and utilities). Under its Articles of Association, DYB received the mandate to finance SEEs under law 440. But occasionally other SEEs received financing through DYB. a SEEs viewed DYB as one more formality of the project cycle. DYB confined its appraisal to the specific investment project and did not attempt an evaluation of the managerial, operational and financial performance and position of the sponsor SEEs. - 15 - Bank Strateo= 2.06 Up to the 1970s, Bank lending to the industrial sector in Turkey consisted of ten loans to Turkiye Sinai Kalkinma Bankasi (TSKB), a private development finance corporation (DFC), for onlending to large scale private enterprises. This approach was based on the Bank's general strategy in DFC lending which aimed at strengthening the institutional capacity of private financial intermediaries in order to promote viable private industrial projects. Two factors contributed to the change in Bank's leading strategy to Turkey. The first was a change in the Bank's general policy, in 1968, to provide loans also to Government-owned DFCs. The second was the realization that with the public sector controlling more than half of the manufacturing capacity, investment decisions of the SEEs had an important impact on the country's industrialization. It was, therefore, recognized that an overview of the investment decisions in the SEEs was necessary and that SEE management had to be improved to ensure efficient use of resources. 2.07 This shift resulted in a number of direct investments in large scale SEEs in key subsectors (steel, fertilizer, pulp and paper). Between 1972 and 1978, the Bank financed six large scale SEE projects for. a_total amount of US$209.5 million in loans. However, the Bank had no direct access to the small and medium scale SEEs which made up the bulk of the sector To reach this group and to improve the investment process within the public sector, it was considered desirable to channel funds through DYB. 2.08 The Bank's operations in the industrial sector up to 1980, including the first two loans to DYB, were reviewed by OED in its report entitled "Sector Operations Review: Industries and DFCs Program in Turkey" (Report No. 3077). The report concluded that the Bank's progress in pursuing its strategy of lending to DYB was limited. This strategy was basically constrained by the "characteristics of the institutional situation, environment and practices prevailing in Turkey". DYB did not develop into an independent financial institution and the subprojects financed by DYB continued to follow the past pattern prevailing in the SEE sector. It also seemed that the rigidity of the SEE system and the difficulties to make any significant changes were underestimated. These issues needed to be addressed at the macro-economic level, rather than through a loan to an institution which was itself only a small part of the system. 3. PROJECT OBJECTIVES AND DESCRIPTION 3.01 The objective of DYB II (Loan 1379-TU) was to provide financing to small and medium scale SEEs in Turkey and to develop DYB gradually into an independent financial institution. It essentially continued actions which had - 16 - been initiated under DYB I (Loan 1025-TU).3 The project consisted of three components: (L) a US$70 million line of credit for onlending to SEEs, (ii) a continuation of DYB's institution-building efforts predominantly in the areas of project appraisal/supervision, and above all (iii) a more concerted effort of including DYB as a formal participant in the selection process of SEE projects. The loan was equivalent to roughly six percent of DYB's project commitment over the 1977-78 period and financed only the subproject component of the loan. 3.02 The subprojects were to be selected by DYB and submitted to the Bank for review. The free limit was set at US$2 million. Subprojects had to have financial and economic rates of return above 20%. To address the criticism that the capital intensity of the SEEs was excessive, the per job cost of the subprojects was not to exceed US$50,000. Regarding the second component, the Bank ascertained that DYB would apply Bank appraisal and supervision standard to all its loans and increase its appraisal staff. For the third component, agreements were reached with the Government to include DYB at a much earlier stage of the public investment review process and give DYB a greater say in the final approval of these projects into the AIP. To this end, the Government was to ensure that DYB receive summaries of all investment proposals submitted by SEEs at the same time as SPO. 3.03 DYB III (Loan 1998-TU) was prepared under a much changed policy regime and macro-economic circumstances. In January 1980, the Government introduced a package of reforms with the objective to establish an outward- oriented economy based on market principles. SEEs were granted the authority to set prices and appoint management, but they were not to expect budgetary financing to cover cost overruns and investments. The reforms were intended to expose SEEs to market forces and induce more efficient resource allocation. DYB was also given a more prominent role. It was to channel alI financing to SEEs based on its own assessment of project viability. 3 DYB I had two objectives: (i) to finance viable small and medium scale SEE projects; and (ii) to strengthen DYB's institutional capacity by increasing the quality and the size of the appraisal/supervision staff. It was believed that DYB could gradually become an independent financier if it became a strong institution. Progress in achieving project objectives was considered modest but satisfactory at that time. DYB had gradually built up its professional capacity; the loan was fully committed within two years of effectiveness; disbursements were on schedule; and DYB gained some inroads into the pre-selection of SEE projects in the AIP cycle. While appraisal and supervision work had improved, there were reasons to conclude, however, that the project appraisal procedures and standards along Bank guidelines were not being applied to DYB projects not financed by the Bank. (For more detail, see PCR on Loan 1024-TU, March 21, 1986) - 17 - 3.04 In this context, the Government requested a third DYB loan for the purpose of completing a number of SEE projects that had remained unfinished due to lack of foreign exchange. The project had three interrelated objectives: (a) completion of six high priority ongoing rationalization/ modernization industrial projects of three beneficiary SEEs; (b) improvement in the operation and productivity of the beneficiary SEEs; and (c) the further strengthening and broadening of DYB's capacity to serve the SEP. sector. 3.05 The loan consisted of US$67 million financing for installation and equipments in: (a) SEKER to complete the expansion of its Ankara Susurluk sugar factories and the construction of a new factory at Ilgin; (b) Karaburuk to improve raw material handling and preparation, and the replacement of equipment and refractors to increase iron production for the foundry t.;ustry; (c) Black Sea Copper Corporation to remove bottlenecks and complete the modernization and expansion program of its copper mining and concentration complex at Murgul; and (d) technical assistance (US$3 million) to the beneficiaries for project implementation and improvement in plant operation and maintenance, development of appropriate workers' incentive systems, and budget control and cost accounting system. 3.06 For the third component, (a) DYB was to employ consultants to assist in project supervision and (b) the Government was to undertake a study of the future role of DYB in the SEE system. The objective of the study was to define and delineate DYB's responsibilities and functions in liaht of the reforms introduced. It was to be undertaken by the Government and carried out in two phases. Tne first phase was to concentrate on (i) DYB's role in the selection of SEE projects for implementation; (ii) its relationship with the Treasury and SPO; (iii) its relationship with its SEE borrowers; and (iv) its financial structure, resources and lending rates. It was proposed to be carried out by a committee set up by the Government, the concerned ministries and representative SEEs. DYB was not formally included in this committee. Based on the finding in the first phase, the second phase would propose (i) DYB's organizational structure, (ii) staffing needs, (iii) salary structure, and (iv) operational policy. 4. PROJECT DESIGN AND ORGANIZATION 4.01 While the Bank's lending policy changed considerably in Turkey, "the quality and breadth of the analysis underlying this operational shift was somewhat limited, and there is evidence of insufficient policy understanding between the Bank and the Government for Bank-supported operations to have achieved major objectives." (OED Report No. 3077). Perhaps due to the lack of alternative lending instruments, the Bank's lending to the public sector followed essentially the same strategy pursued in its lending to the private sector. The Bank was hoping that the projects would have a catalytic role, and that by upgrading the institutional capability of the DYB it would be able to create a quality control unit and thus alter the pattern of SEE investments. - 18 - 4.02 The objective of building DYB into a full-fledged DFC similar to TSKB failed because the design of the loan ignored fundamental differences between the objective, policy and regulatory environment, and behavior of a public and private DFC. First, DYB was a public entity vested with overriding social objectives and little commercial ones. Second, DYB's clients were state enterprises which, in turn, had little financial discipline. Third, DYB played a very small role in the financing of SEEs and thus did not have the required leverage to bring about major changes. Above all, the Bank highly underestimated potential difficulties in coordinating and getting consensus of various public sector entities for change, particularly in light of well established procedures.' 4.03 In DYB II, the timing of the project was right as the Government was seeking ways to improve the SEE investment procedures. However, the project as a whole was inadequately prepared. According to the project files, the earliest reference to a possible second loan to DYB was made in March of 1976, the appraisal mission was sent out in July and the project was negotiated by December 1976. It appears that not sufficient thought was given to the lack of leverage of this loan (due to the loan size and its design) in influencing established procedures and in following through on changes agreed with the Government. The Bank's loan accounted for approximately 1% of SEE investments during 1977-78. 4.04 More importantly, DYB was not institutionally in a position to carry out the role envisaged for it in the project. Chronic staff shortages and high staff turn-over (it was even without a General Manager for one year) as well as insufficient project appraisal capacity plagued DYB's own operations, let alone its new function to review and evaluate all SEE investment proposals. Moreover, the loan did not properly formulate a role for SPO to have part ownership in the reforms, and overestimated its willingness to loosen its grip over the investment procedure and delegate its authority to DYB. Without adequate internal capacity and a conducive external environment for DYB, the project was bound to fail in this objective. 4.05 In July 1979, the Government requested the Bank to consider DYB III to complete a number of unfinished but high-priority SEE investments. The Bank allocated considerably more resources to its preparation compared to DYB II, in a perceived environment of improved policy dialogue as a SAL was being I In this respect, the President's Report for Loan 1379-TU states: "... the proposed project will enhance DYB's role in the SEE system. (It] takes modest but significant steps, to give DYB gradually more of a voice in the Government's decision making process on SEE investments, to promote DYB as the institution sensitizing the Government and SEEs to the need to evaluate fully economic benefits and costs of projects before embarking on investments, and thereby to increase DYB's influence in screening out and modifying questionable projects." (p. 7) - 19 - prepared. The introduction of 1980 reforms did create the impression that the problem of the SEEs and DYB were now going to be rectified. 4.06 In DYB III, two possible project designs were probed: (i) a conventional DFC type project and (ii) a special operation whereby DYB would merely serve as a channel primarily to transfer foreign exchange resources to selected SEEs. Perhaps disappointed with the previous performance under the past two loans and their failure to bring about any change in the SEE sector, the Bank selected the second option, and in doing so the Bank ended up usin3 DYB as a "cashier". While under a normal DFC operation, DYB would decide on the eligibility of investments for its financing, under DYB III, these investments were set forth in the Loan Agreement. 4.07 The study on DYB's future role in the SEE system was supposed to address important issues and essentially call for a much needed restructuring plan to prepare DYB for the new policy environment. It was, however, never carried out due largely to two deficiencies. First, it failed to designate DYB as a full partner in the study despite the fact that it had the most to gain from such a participatiin and DYB management expressed keen interest to work on the study.s Second, it provided no funds under the project to cover its cost.* 4.08 The design of DYB II basically followed the usual DFC project design, consisting of a line of credit for on-lending, an institution-building component and Government policy changes that affected the efficient implementation of the project (para 3.01). DYB was to select and appraise sub-projects and submit them to the Bank for authorization. At appraisal, the Bank ascertained the appraisal capacity and procedures and recommended measures to rectify any deficiencies. DYB III, on the other hand, did not follow the standard DFC lending, primarily because the Bank pre-selected the subprojects and allocated the loan accordingly (para 3.04). Effectively, DYE * There are references in the project file regarding DYB management's interest in the proposed study. The PCR on the first DYB loan also states that " DYB management displayed considerable initiative and interest in reviewing DYB's role [with the help of the study]. In 1981-82, an in-depth study of charters of public sector DFCs was made [by DYB and changes in DYB's law were proposed for consideration by the Government... .The proposed changes 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" (p. 7). The PCR mission for DYB II and III was unable to find this report in DYB or at the Bank, and as such cannot confirm this statement. I Currently, the Bank has been asked to assist in the restructuring of the Turkish Export Credit Bank, the successor of DYB. The foreign cost of carrying out the study for the restructuring plan is estimated at US$300,000 (see para 5.10). - 20 - was used as a channel to transfer foreign exchange to targeted subprojects as these were too small to be financed by individual Bank loans. 4.09 Despite this difference in approach, both projects failed to achieve their institution-building goals of improving the SEE system because of the following inadequacies in the design of the institution-building components and the scale necessary to bring about the needed changes: (i) the projects did not pay due attention to the intricacies regarding the workings of the SEE sector; (ii) the objectives were not equally shared between the Bank and the Government; (iii) the projects was based on an established formula that did not adequately address the specific issues of DYB within the SEE sector; (iv) the roles and responsibilities of institutions necessary for the projects'execution were not properly delineated; and (v) the size of the loans were too small in relation to the total investments in the sector to make a major impact in existing practices and pattern of investments. 5. FINANCIAL INTERNEDIARY 5.01 As discussed above (para 2.04), DYB occupied a weak position in the Turkish SEE system and was overshadowed by other Government agencies in making decisions regarding the SEEs. Being a SEE itself, it benefitted from and was constrained by the same factors as its borrowers, e.g. it received resources from the Government but could not determine the pricing of its loans. In the light of this situation, in the preparation of the loans, DYB should not have been appraised like a typical DFC. 5.02 The introduction of the 1980 reforms were expected to have an important impact on DYB's portfolio and lending operations. On the contrary, the reforms placed DYB in a position of facing real lending risk, particularly on its local currency loan portfolio, without the autonomy to select projects and manage risks. Since the Treasury stopped financing the deficits of the SEEs, as part of the reform program, SEE arrears to DYB grew rapidly. DYB's local currency lending rates were fixed and negative in real terms and had no relationship to the cost of resources. As the SEEs were recuired to raise funds from commercial sources, whose interest rates were substantially higher, they, as expected, defaulted on their loans to DYB which carried lower interest rates. Instead of resolving these basic problems, DYB III emphasized only the importance of supervision of the existing loan portfolio. 5.03 In 1980, DYB's total loan portfolio was about US$1.17 billion. Its long-term debt and equity were US$1.05 billion and US$109 million, respectively. Loan arrears at the end of 1980 affected 19% of loan portfolio. While this level was not unacceptably high, provisions for doubtful debts were only 1.6% of the long-term portfolio which were inadequate in view of the portfolio infection level. 5.04 DYB's level of operations as measured by the number of annual commitments for new and ongoing projects gradually declined from 45 in 1983 to - 21 - 9 in 1987 (Table 1). Similarly, DYB's share in the financing of SEEs fluctuated from year to year and gradually declined to reach only 1% of total SEE investments in 1987 (Table 2). Much of this fluctuation was due to the Government's uneven contributions owing to its own budget problem and to its policy to reduce SEE funding. After 1980, many SEEs were forced to postpone new investments and/or secure financing through commercial sources. DYB's resources were almost entirely provided through budgetary allocation either by the Government directly or through the Social Security Funds (which had to buy DYB bonds). DYB was only moderately successful in raising alternative resources. (It did secure some funding from the European Investment Bank, and German and Japanese credits.) DYB was also constrained in generating internal funds as on-lending rates were fixed by the Government at levels frequently negative in real terms. This condition resulted in losses and barred DYB from generating any sizable profits as a basis for a capital build-up. 5.05 DYB's income statement and balance sheets for 1977-87 are given in Annex 3 of Part III. While profitability remained high up to 1981-82, it declined sharply between 1983 and 1986. The income statement, however, is based on accounting practices which overstate income (particularly interest income) and understate expenses, especially in loan losses. On the basis of internationally accepted accounting practices, DYB may have already had losses in its pre-1983 lending operations. Net profits before taxes as a share of average assets and average equity declined from 2.36% to 0.057% and from 45% to 19% respectively. Administrative expenses, which had been kept low, doubled between 1981 and 1986, from 0.7% to 1.4%, mostly due to extensive recruitment of staff on a contract basis as a means to bypass the rigid and low public sector salary structure. 5.06 At the end of 1987, DYB was no longer solvent. As of December 31, 1987, DYB's total equity was TL 224 billion consisting of paid-in capital, retained earnings, and reserves. Its liability to equity ratio was 3:1. As DYB had no debt/equity ceiling, this ratio may appear to be conservative. Perhaps due to capitalized interest, non-fixed assets (mostly loans to SEEs) were at TL 806 billion, which had grown at about 40 per cent per year. While the PCR mission could not obtain any written information on the performance of the portfolio, unofficial estimates are that as much as 70% of the existing DYB portfolio is non-performing--more than twice DYB's capital. The poor loan- portfolio is mostly the result of rapid changes in the policy environment in which both DYB and SEEs operated; lack of working capital; and above all, the debt service burden which only increased with each successive devaluation of the TL.' ' DYB's sub-loans are pre-FERIS (Foreign Exchange Risk Insurance Scheme) and its sub-borrowers are producing predominantly for the local market. Few are exporters. Assuming the foreign exchange risk of the loans while having no export earnings has made it impossible for these firms to hedge against devaluation. Extensive delays caused by lack of counterpart funds further weakened the financial profitability of many SEEs. - 22 - Table 1 - Projects Evaluated and Revised by DYS No. of No. of No. of Ongoing New Total Projects Projects Projects 1977 53 23 76 1978 59 18 77 1979 51 9 60 1980 43 12 55 1981 55 10 65 1982 39 6 45 1983 39 6 45 1984 39 4 43 1985 24 1 25 1986 22 1 23 1987 9 0 9 Source: DYB Table 2 - DYB's Financina of SEE Proiects Investment in SEEs DYB's Financing as as % of Total % of Total SEE Investment Financing 1977 23.3 27.6 1978 23.1 13.8 1979 30.9 10.7 1980 32.8 5.9 1981 54.1 12.8 1982 32.5 12.5 1983 35.5 8.6 1984 34.9 5.5 1985 29.7 2.3 1986 26.6 3.7 1987 23.6 1.0 Source: DYB - 23 - 5.07 The concept of a DFC along the lines of DYB is clearly unsustainable in the long run. From the very beginning, DYB should have had both a greater say in the matters concerning SEEs and a clear mandate to diversify its business as a bank, rather than being a cash window of the Treasury. With the introduction of the 1980 reforms, whereby SEEs were to become market-oriented and raise their resources in a commercial environment, it should not have been surprising that DYB,without restructuring its business, would eventually have no function. In addition, the narrow specialization of DYB, with concentration of its portfolio in the public sector, made it particularly vulnerable to the economic shocks of the adjustments. The Bank could have played a role in identifying these problems by seeing to the completion of the study under DYB III. The cost to the Government for restructuring DYB would certainly have been significantly less than what it would be today if the DYB portfolio (now residing in Turkish Export Credit Bank, TECB) is to be restructured. 5.08 By mid-1987, the Government was faced with a dying DFC and a problem portfolio. One possible solution might have been to merge DYB with a commercial bank, which could thereby gain expertise in long-term financing. Without a clear strategy, the Government instead converted DYB into TECB in August of 1987. While its charter still allows TECB to provide long term funds to SEEs, it is clear that TECB, as Turkey's export-import bank, has altogether a different role from its predecessor. Under the present system, SEEs can obtain budgetary allocation directly from the Government,' but in most cases must either obtain funds from commercial sources or through the rediscount facility of the Central Bank. No other financial institution has been assigned to specifically deal with the financing of SEEs, which in itself is the main lesson that the Government has learned from the DYB experience. 5.09 The conversion of DYB into the TECB may in itself be a mistake. The non-performing portfolio and the large staff of the old DYB have seriously impeded the operations of the new bank.' It would have been more efficient for the Government to take over the portfolio of DYB or to merge it with a commercial bank, and allow TECB to start unburdened by DYB's portfolio. TECB has severe debt service problems, as it is taking de facto the exchange risk for its non-performing portfolio. The effectiveness of TECB will be hampered as it is overburdened by past operations that will absorb resources needed to achieve its new goal. B SEE deficit still accounts for half of public sector borrowing requirement. 9 While DYB did develop a good cadre of qualified staff, its expertise was above all in long-term project finance. Staff would need to be retrained to become familiar with skills needed in export financing. The current bank could function more efficiently with less staff. Organizationally, the operations of DYB are under the supervision of a TECB Assistant General Manager today. This unit is responsible mainly for loan recovery. - 24 - 5.10 The Government appears to have finally recognized that a more permanent solution is needed. It has initiated discussions with the Bank on a restructuring of TECB to be carried out within the next fiscal year. The Bank has been asked to assist in this work on an advisory basis. It has recently been agreed that TECB would finalize a thorough portfolio review and quantify the size of the non-performing loans before further steps are considered. The restructuring would be conducted jointly by TECB, the Treasury, and the Bank. 6. PRO_JECT IMPLEMENTATION 6.01 Appraisal for DYB II took place in July 1976, and negotiations were completed by November 29, 1976. The Board approved the loan on March 15, 1977 and signing followed eight days later. The effectiveness date was extended from July 21, 1977 to September 21, 1977 to complete arrangements to employ uniform Bank appraisal and supervision standards in all DYB lending operations, and to ensure the adequacy of the measures taken by the Government to enable DYB's more explicit involvement in the Government's investment approval process. The Bank received a letter from the Government stating the intent to include DYB in the subsequent project evaluation cycles. 6.02 Commitments were slow and had to be extended by 21 months. The delay was due to the fact that projects contained in the 1977 AIP were not well prepared. At the time of the original commitment deadline, almost 90% of the loan amount had been committed. However, more than one-third of this commitment was the US$20 million loan that the Bank agreed to allocate for the completion of Akdeniz Forest Utilization project, a project the Bank had financed earlier and which had severe cost overruns.10 Twelve A-subprojents and eight B-subprojects were authorized, and the loan was fully committed. Disbursements started two years later than estimated and remained behind schedule, mostly due to slower commitments and to lack of counterpart funds which delayed subproject implementation. The Closing Date was twice extended from March 31, 1981 to December 31, 1982. US$6.5 million was unutilized and was subsequently cancelled. 6.03 Procurement procedures were to follow ICB according to the regulations of related ministries which basically set the ICB limits. No irregularities were reported. The on-lending rate was set at 12.5% in TL, but the sub-borrowers were to take the exchange risk. Therefore, while local currency loans might have had a negative real rate due to inflation, with sub- borrowers taking the exchange risk, the foreign currency loans carried a positive rate over the life of the loan. During implementation, a number of loan conditions were not complied with. These concerned DYB's role in the project cycle, DYB's staffing, audit requirements, and supervision activities. Successive supervision mission flagged these issues, but none were rectified satisfactorily. 6.04 Appraisal for DYB III took place in November 1980, and negotiations were completed by May 1981. The Board approved the loan in June 1981 and it became effective in August 1981. Disbursements began on time but 10 See Akdeniz PCR (Loan 957-TU) dated March 21, 1986. - 25 - fell behind schedule because of delays in subcroject implementation. The Closing Date was twice extended to December 31, 1988. Approximately US$3.5 million was cancelled from the loan due to foreign exchange saving from the project. 6.05 As subprojects had been pre-selected, the loan was fully committed from the beginning. However, despite pre-allocation, the subloan component of DYB III was implemented at a slower than expected rate. The delays were not considered excessive in view of the complexity of the subprojects and the application of international competitive bidding (ICB) procedures to most equipment procurement and recruitment of consultants. As any contract above US$1 million was subject to ICB, almost 80% of contracts used ICB procedures. The delays resulting from procurement were mostly due to the Borrower's inexperience with the preparation of bid documents and their ex-ante review by the Bank, both of which took longer than had originally been estimated. The on-lending rate of this project was raised to 21.5% for both local and foreign currency and was fixed by the Government. As in DYB II, the local currency loans were highly subsidized, but the foreign currency loans were in general positive because the sub-borrower was assuming the foreign exchange risk. 6.06 As indicated earlier, the study concerning DYB's role was never undertaken. It was to begin by September 30, 1981 and be completed by December 31, 1982. But the Government asked for a two-year extension to complete a package of major SEE policy reforms to be included under SAL III. It was argued that since the legal and administrative restructuring of the SEEs were not completed, the principles of DYB's role and its relation with the SEEs could not be specified. The Bank should have redesigned the study then and allocated some funds for its execution. This component remained the main loan covenant that was not complied with. 7. SUBPROJECT RESULTS 7.01 With the two loans, DYB financed 27 subprojects in textiles, footwear, chemicals, bricks, sugar, paper, copper, iron and steel. Attachment I of Part I summarizes the objectives and the achievements of individual subprojects financed under the two loans. A rating of the subprojects is shown in Table 3 below. The overall performance of the subprojects is mixed. Four subprojects face inadequate demand; two have difficulties competing with the private sector; three have serious raw material shortages that had originally justified their construction: one has insufficient working capital; and one has environmental problems. On the other hand, seven out of 27 have performed above targets set at appraisal, and six additional ones are producing at target or at least at the capacity utilization rate of respective sectors. Two projects are still under implementation and will be completed toward the end of this year. Based on current performance, the pattern of subprojects financed under DYB II is not different from those identified by the Bank in DYB III.U " In DYB III, subprojects A-6 and A-7 were combined; however, DYB separated the two. - 26 - Table 3 - RATING OF SUBPROJECTS FINANCED UNDER LOANS Subpro Sub-borrower's Rating as a Number Name Function of .----------------------------------- Current Capacity ------------------ 1379-TU Utilization Cause A-1 TAPKOPRU HEMP MILL Very Successful A-2 BOZOYUK CERAMICS Very Successful A-3 KAHRAMANMARAP TEXTILE Very Successful A-4 BOU DECORATING PAPER PRINTING Minor Problems Competition A-5 FILYOS FIRE BRICK Problems Competition A-6 DIYARBAKIR CARPET AND WOOL IND. Successful A-7 BUNYAN BLANKET FACTORY Very Successful A-8 MERINOS TOPS. ENTERPRISE Minor Problems Market A-9 SEKA AKDENIZ Major Problems Raw Materials A-10 IZMIR COTTON TEXTILE PROJECT Successful A-11 CIRCUIT BREAKER FACTORY Problems Working Capital A-12 IZMIT CORRUGATED CARDBOARD Successful B-1 ANKARA MACHINERY FACTORY Successful B-2 VAN SHOE FACTORY Major Problems Market B-3 KARS SHOE FACTORY Major Problems Market B-4 SINOP SHOE FACTORY Major Problems Market B-5 IZMIR COTTON TEXTILE PRINTING Very Successful B-6 KECIBORLU SULPHUR Very Successful B-7 SEKA PAPER MILL Major Problems Raw Materials B-9 KONYA CHROMIUM-MAGNESITE Successful 1998-TU A-1 ANKARA SUGAR FACTORY Problems Raw Material A-2 ILGIN SUGAR FACTORY Very Successful A-3 SUSURLUK SUGAR FACTORY Successful A-4 KARABIK BLAST FURNACE FEED Under Implementation A-5 KARABIK BLAST FURNACE STOVE Under Implementation A-6 MURGUL MINE.DEV.CONS.MOD. Problems Environment A-7 SAMSUN COPPER SMELTER Under Implementation Note: Very Successful - project reached target; operation at full capacity Successful - reached target; CUR at least about avg of sector criteria Minor Problems - capacity utilization uneven Problems - capacity utilization substantially under target Major Problems - project unlikely to be profitable during its life Source: DYB data and Bank staff judgement - 27 - 7.02 Actual financial rates of return could not be calculated for all subprojects as they were mostly expansion projects and it has been difficult to collect incremental data (Annex 4, Part III). Ex-post financial rates of return were calculated for 15 subprojects. Except for one subproject (Ankara Sugar Factory under DYB III), the others which are the better performing projects show acceptable rates of return.32 The projects have created to date 6800 jobs. 8. BAK PERFORMANCE 8.01 The implementation problems under DYB II, particularly concerning DYB's role in the system, were perhaps a result of a rapid loan processing, whereby the Bank underestimated the size of the problem and proposed inappropriate remedies to cure it. Since the Bank had already an ongoing operation with DYB in the SEE sector, the problems regarding the SEEs and DYB were not new. More time should have been spent in preparation to allow assessment of problems encountered in the past and an estimate of reforms that could realistically be achieved in the future. Supervision missions were undertaken regularly and correctly identified problems and recommended actions. The Bank regularly received assurances from the Government that DYB would be fully participating in the next SEE project evaluation cycle. But DYB's role remained negligible. The dialogue, however, may have helped in prompting some internal discussions on the role and future of DYB. The actions of the supervision missions were effective only in proposing solutions to other problems, such as staffing and subproject commitments, but could not resolve the centrol problem concerning DYB's role. 8.02 In DYB III, as mentioned earlier, loan preparation coincided with extensive sector work and policy dialogue on the functioning of the SEE sector and specific reforms. Despite its previous involvement with DYB, the Bank used DYB as a channel to transfer foreign exchange resources to the subprojects. The issues concerning the execution of the study on DYB's role were flagged in supervision reports but not rectified, when it became apparent that the Government was unlikely to carry out the study. But the Bank did not design alternative means to carry out the study on the role of DYB in the system. In more than one way, the Bank essentially lost hope in the possibility of transforming DYB into an effective Development Finance Institution. 9. BORROWER'S PERFORMANCE 9.01 The quality of appraisal and supervision during the first two loans was uneven because of severe staff shortages and frequent turnover. The poor performance of DYB's portfolio, however, may not necessarily be related 1 Apparently DYB selected the better performing projects in calculating ex-post rates of return, except for one. The reason for the poor performance of Ankara Sugar Factory is that the comparative advantage of the sugar factory was in the production of beet nearby. The appraisal mission specifically investigated the adequacy of beet supply for the purposes of operation and found it satisfactory. However, due to changes in agricultural incentives, beet production has declined sharply, leading to increased raw material cost for Ankara Sugar Factory. - 28 - only to the quality of its appraisal work. During the last phase of the second loan and the beginning of the third, DYB did gradually build up an acceptable professional capacity in appraisal. DYB staff participated in the appraisal of the six subprojects identified in the third loan. DYB staff also conducted seminars on the techniques of project appraisal for SEEs and other institutions, a topic that was not widely taught in most Turkish universities. DYB acquired, under UNDP and OECD technical assistance grants, adequate training materials and seminar facilities, which it used in training SEE and its own staff. This function of DYB, while difficult to quantify, may have generated significant long-term externalities to the economy. 10. FROJECT DOCUMENTATION AND pATA 10.01 Due to the conversion of DYB into TECB, the focus of operations has shifted completely. The new bank is no longer involved with providing long-term resources to SEEs. The past portfolio of DYB continues to trouble the new bank. DYB related operations have been isolated from other operations and concentrated under one assistant general manager. As these loans date back to more than 12 years, much of administrative data concerning supervision mission dates, etc. are not available and had to be painstakingly reconstructed as much as possible. Documentation within the Bank related to the projects and other supporting reports were essential in the preparation of this report. However, there is some inconsistency between computerized data and those in the files, particularly in the area of staff resources and mission dates. The author of this PCR attempted to reconcile these two sources as far as possible. - 29 - Part I Attachment 1 SUBPROJECT PERFORMANCE LOAN 1379-TU TAPKOERU HEMP MILL .(A-1) was an expansion/modernization to produce high quality yarn. The project has been performing well. The ex-post FRR of 80% is 30% above estimates at appraisal. The subloan size was roughly US$3 million. It created 40 jobs and was completed in 1980 after 2 years delay. It was located in a rural area. BOZOYUK CERAMICS (A-2) was sponsored by Sumerbank to produce products for the construction sector. It was a new project and completed in 1980 after a 2-year delay. It has been performing well. Ex-post FER is 11% higher than the 33% estimate at appraisal. The subloan size was US$326,000, and it created 734 jobs. KAIRAMANMARAF TEXTILE (A-3) project was a modernization project. Subloan size was only US$57,000 which is very small. It created no new jobs. It has been operating near 100% utilization. BOLU DECORATING PAPER PRINTING (A-4) produces decorating and wall paper and faces stiff competition from the private sector. Subloan size was US$2.8 million. Ex-post FRR compares well, however, at 24% to 31% at appraisal estimates. The project created 54 jobs and was completed almost 4 years after schedule, in 1983. FILYOS FIRE BRICK (A-5) was to expand production of bricks and mortars. However, the plant faces severe competition with the private sector. The plant was completed with 5 years delay. The subloan size was US$2.2 million. DIYARBAKIR CARPET AND WOOL IND. (A-6) project was to expand the production of carpets by installing the production of yarns. It has been performing well. Ex-ante FRR was at 57%. Subloan size was US$3.3 million. BUNYAN BLANKET FACTORY (A-7) replaced old machinery to produce blankets. The plant has been performing well and shows a 35% ex-post FRR. Subloan size was US$2.6 million. SEKA AKDENIZ (A-9) was also supported under Loan 957-TU (see PCR). The project produces craft liners and bag papers but has had energy problems and insufficient raw materials. However, despite shortfall in capacity utilization, output quality is the best in Turkey. This was by far the largest subloan in the amount of US$19.3 million. Ex-post FRR is 5.92, far - 30 - below the 12.8% estimated at appraisal. The plant created 1,091 positions. The project was completed in 1984, almost 6.5 years after schedule. 12IR COMTON TEXTILE PROJECT(A-10) expanded the production of garments. Despite high quality, demand fluctuates. Subloan size was US$1.9 million. The project was completed 3 years behind schedule. Ex-ante FRR was 30.2%. CIRCUIT BREAKER FACTORY (A-11) project was sponsored by Iller Bankasi to create new capacity in the production of circuit breakers for the domestic market. Due to lack of funds, the project was completed in 1984 some 5 years behind schedule. It has had start-up problems. The subloan size was US$5.6 million. It created 150 jobs. 1ZMIT CORRUGATED CARDBOARD (A-12) increased production of cardboard boxes. It was completed in 1980, five months after schedule. The subloan size was US$2.7 million. Despite some minor operating difficulties, the plant has been operating close to the capacity utilization ratio of the sector. Its ex-post FRR of 35% is favorable, compared to 40% at appraisal. The plant created 153 jobs. ANKARA MACHINERY FACTORY (B-1) aimed at substituting the import of waterwheel tubes and boilers for sugar factories and other industrial uses. The project was completed in 1979 after a 12-month delay. It created 110 jobs. The subloan amounted to US$1.7 million. Ex-ante and ex-post FRR were 35%. The project's performance has been satisfactory. VAN SHOE FACTORY (B-2) was expected to create capacity for the production of men's shoes. The subloan amount was US$1.2 million. Ex-ante FRR and ERR were 24.2% and 23.4%, respectively. The project has not performed as expected due to market problems. The project created 432 jobs and was completed 26 months after schedule. KARS SHOE FACTORY (B-3) aimed at installing new capacity for the production of shoes for the military, but has been suffering from insufficient demand. The subloan size was US$2.3 million. Ex-ante FRR was 37% but an ex- post FRR could not be calculated. The project was completed in 1982, 29 months after schedule. It created 351 jobs. SINOP SHOE FACTORY (B-4) was to expand production of men's shoes. It has had marketing problem and shortage of demand. The subloan was US$1.1 million. Ex-ante ERR was 31.6%. The project was completed in 1982, 33 months after schedule. It created 351 jobs. IZMIR COTTON TEXTILE PRINTING (B-5) was sponsored by Sumerbank to modernize 19 cotton establishments. The project was completed in 1981, 22 months after schedule. Since start-up, project has been performing well. Ex- post FRR is 26.2%, compared to 45% at appraisal. The project created 67 jobs. The subloan was US$1.86 million. KECIBORLU SULPHUR (B-6) was sponsored by Etibank to increase production of sulphur for the use in the fertilizer and pulp & paper industries. It was completed in 1980 but suffered a set-back due to a fire in sulphur mines soon after. It has resumed production and is performing wel.. There was a 13-month implementation delay. The project did not create new positions - 31 - despite its projected 136 jobs. Ex-post FRR was 39.8%, 6% above projection. The subloan was roughly US$1 million. SEKA PAPER KILL (B.7) was expected to utilize scrap paper as input. However, capacity utilization has been recorded low because of recurrent problems in organizing the collection of scrap paper. The project also faces strong competition from the prtvate sector. The project was also financed under Loan 957-TU to Akdeniz (see PCR). Subloan size under this loan was US$1.4 million. Ex-ante FRR was estimated at 68%. Project was completed in 1979, almost 3 years after schedule. It did not create the 57 positions estimated at appraisal. KQNYA CHROMUM-MAGNESITE (B-9) was sponsored by Sumerbank to produce bricks and mortar. The project was completed on time and has been performing well. Ex-post FRR is 72% and compares favorably with the 77% estimated at appraisal. The subloan amounted to US$1.04 million. LOAN 1998-TU ANKARA SUGAR FACTORY (A-1) was completed in 1988. The first year production was less than expected. The plant has raw material problems because of a decrease in beet production which is the plant's main input. The ex-post FRR of the project is 5.4%-- more than 12% below estimates. However, the FRR is based on a very short operating period. The subloan was US$3.6 million. ILGIN SUGAR EACTORY-(A-2) appears to be producing as planned. Although ex-post FRR is only 7.4%, it is based on a short production span. The plant faces no specific problems. The subloan was US$6.1 million. SUSURLUK SUGAR FACTORY (A-3) was implemented five years behind schedule (before Bank loan). It has been performing well. Ex-post FRR has been 40%. The subloan size was US$6.1 million. KARABIK BLAST FURNACE FEED (A-4) was to increase capacity in steel production. The project is still under implementation. The size of the subloan was US$15 million. KARABIK BLAST FURNACE STOVE (A5) was planned together with subproject A-4 and was to expand the production of steel. Equipment that was ordered in 1977 but could not be delivered due to foreign exchange shortages was delivered in 1984. The implementation of the remainder of the project is expected to be finalized by mid-1990. The subloan size was US$9.3 million. MRGUL MINE DEV. CONS. MOD (A-6) has a high rate of return (47%), though not the 100% estimated at appraisal. Its objective was to provide raw material for the Samsun copper ore factory. The project has recently faced - 32 - some environmental problems related to the erosion of nearby mines which has endangered a village nearby. Work was temporarily stopped to relocate the village. SAMSUN COPPER SMELTER (A-7) was originally included in subproject A-6 and was part of the smelter complex. The purpose of the plant was to produce sulfur dioxide. The subloan size was US$11.1 million. The project is still under implementation and is expected to be completed toward the end of this year. The rates of return of this project were expected to be above 100%. - 33 - PART II - PROJECT REVIEW FROM BORROWER'S PERSPECTIVE 1. THE ROLE OF SEES IN THE TURKISH ECONOMY 1.01 To facilitate the achievement of its broad objective of developing through industrialization, the State Economic Enterprises (SEEs) were established since the 1930s. The SEEs have provided and continue to provide invaluable services in the fields of production, employment, establishment of basic industries, formation of capital, efficient utilization of advanced technology, balanced distribution of investments, maintenance of price stability and generation of the necessary skilled labor force for the country's economic enterprises. 1.02 The foreign currency requirement which was one of the main bottlenecks of the Turkish economy increased severely with the effect of the oil crisis of the 1970s. Despite this, Turkey maintained its growth and reached almost the highest growth rate among OECD countries. Since 1976, the decrease in the revenues of Turkish workers working abroad and the issues of energy and foreign currency affected industrial production in 1977 and 1978, while the increasing imbalance of payments caused external payments to slow down in 1977. The continuous problems of the economic environment which were still unsolved in 1978, had an increasing effect on the foreign debt problems of Turkey. On the other hand world economic stagnation has also influenced Turkish exports while imports were accelerated with increasing demand. Consequently, the balance of payments was in disarray, and the foreign debt and inflation sky-rocketed. Under these severe economic conditions, the intensive investment tasks entrusted to SEEs continued. To supply the domestic demand expansion, modernization, rehabilitation and debottlenecking investments were started. The share of SEEs capital investments in total capital investments between 1976 and 1980 increased from 20% to 302 while their share in public investments increased from 46.5% to 54% in 1976-1979 with the exception of a slight decrease in 1980. The loans were provided to implement these investments and their increasing interest burden caused the imbalance of capital liabilities. On the other hand, their ongoing tasks such as providing the balanced distribution of investments, maintaining price stability, contribution to employment, etc. resulted in some of the SEEs not achieving the efficiency and the profitability aimed at in the annual plan and programs and their formation of capital was far behind the target. 1.03 In 1980, the Turkish Government saw fit to change its economic policy and significant decisions were made. Key changes in the Decree of rates and tax laws were pursued and the tight money policy was -34 - applied aiming to slow down the inflation rate in a short term by reducing the demand. The determination of prices was left to free market conditions and price controls were stopped with the exception of a few principal goods, trying to avoid the formation of double prices. Furthermore, the prices of the goods and services produced by SE-s were increased to minimize their burden on the Treasury. Interest rates on deposits and loans were left free to encourage the savings while reducing the consumption. The measures facilitating importation required by the economy led to an increase in production eliminating the bottlenecks of supply in goods. By starting a flexible exchange rate policy, increasing incentives for exportation, limiting public investments and taking measures to support the efficiency and productivity, the Turkish Government has dropped the import substitution policy and has become export-oriented. 1.04 The Law No. 440 dated March 12, 1964, on SEEs which had been in effect for 19 years, needed promulgation within the framework of recent economic policy. The Law Empowered Decree No. 60 dated April 11, 1984 which has negated the above mentioned Law was promulgated as Law No. 2929. As a second step, the Law Empowered Decree No. 233 dated June 8, 1984 was put into effect, being the main text related to SEEs aimed to conduct the functions of SEEs more effectively by reorganizing the issues related to the structure, management, control and financial aspects of those enterprises in the light of profitability and productivity. 1.05 Again in accordance with the new economic policy, the "Privatization Program" of SEEs was started in 1984. Between the years 1983-1986 the share of SEEs investments in public investments gradually decreased while their exports increased from US$103 million to US$225 million in the agriculture sector, from US$127 million to US$238 million in the mining sector and from US$853 million to US$1.4 billion in industrial products; 68% of the 80% increase in SEEs exports was in industrial goods. 2. THE ROLE OF DYB 2.01 The DYB was established in 1964 with Law No. 441 with the objective of financing public sector investments with local and foreign long term loans. DYB, being a SEE itself, was to function in accordance with the regulations of Law No. 440; it was also assigned with the task of owing an approach beyond the criteria of a private finance institute or a commercial bank in evaluating the projects to be financed. 2.02 The approval of the SPO has been a prerequisite for the application of DYB Loans. In other words, all the candidate projects for DYB loans were approved by SPO, which is one of the most authorized organizations of the Government. The investment projects accepted in the Annual Program have been evaluated not only in terms of their financial rate of return but also in terms of their socio-economical returns such as the balanced distribution of investments, providing employment, establishment of basic industries, in addition to their profitability and productivity. DYB has also considered the social benefits in evaluating the projects. 2.03 The DYB loans have been to some extent incentives for SEE investments. For this reason the interest rates of DYB loans have always been much below the inflation rate. - 35- 2.04 The change in economic policy in 1980 led to the slowdown of investments. As a result of this, the number of loan applications has decreased. The decrease parallel to the state investments is shown in Part III, Annex 3, Table 1. 2.05 The DYB, which has successfully supported SEE investments during import substitute policies, was reorganized with the Decree of the Council of Ministers No. 87/11914 issued in the official Gazette in August 21, 1987. Its new undertaking was to support Turkish exporters. Within the framework of the above mentioned Decree, Turk EXIM Bank was organized to contribute to the improvement of exports, the enrichment of goods and services to be exported, to provide new markets for conventional export goods, to increase the share of exporters in international trade, to provide the necessary support in their enterprises, to empowering the competitiveness of contractors and investors werking abroad and to provide guarantees for them, and to encourage the production and sale of export investment goods or other investment goods which would help foreign currency savings. 3. THE OBJECTIVES AND THE ACHIEVEMENTS 3.01 To discuss the appropriateness of DYB as an intermediary to the World Bank loans, and to judge its achievements, requires a deeper approach than evaluating the numeric indicators only. 3.02 It is obligatory for the state investments to be accepted in the AIP with the approval of SPO and the Treasury. Therefore, the investment projects which were technically, economically and financially appraised by DYB, had already been evaluated by the Government. The cause of delays in the investment periods of these projects is much beyond the mistakes in evaluation techniques. As mentioned before, these two loans were used in a period in which the economic issues were at their climax with the impact of world economy as well as their indigenous problems, especially for non-oil producing countries. 3.05 DYB has followed-up these projects which have been financed throughout their implementation. DYB's technical and financial experts have visited these plants twice a year and reported the physical improvements, the potential delays in schedule, technical and financial bottlenecks and administrative problems. The most common and significant bottlenecks encountered in these follow-up inspections were inadequate sources of finance. The comments of DYB, related to the measures to reduce the technical and administrative problems, have been reported to the borrowers at an advisory level. 3.06 Furthermore, DYB has followed-up the borrowers during their period of operation, from different points of view such as financial status, capacity utilization ratio, efficiency and profitability. 4. CONCLUSION 4.01 Up to 1980, Turkey had started expansion, modernization and rehabilitation investments to supply domestic demand in the light of its industrialization strategy based on the import substitute policy. The loans 1379-TU and 1998*TU were utilized for the implementation of the above- mentioned investments. Under the economic conditions explained in detail, these two loans were realistic and helpful in the achievement of the planned - 36 - targets. The projects financed by these two loans in foreign currency and with DYB loans in domestic currency, continue to contribute to the Turkish economy, as shown in Part III, Annex 2. 4.02 The DYB has completed two significant tasks through the utilization of its loans. The first task was to contribute to the implementation of SEEs' investments under severe economic conditions. The second and equally important task was to establish a new understanding in the country about the indispensability of project appraisals in decisior-making. The Project Evaluation Seminars started by DYB are no longer carried out by new organizations. The continuing demand for seminars carried out by other institutes is evidence of the importance given to Project Evaluation. 4.03 The actual production data of the plants financed by the loans 1379-TU and 1998-TU is shown in Part III, Annex 4. Some of these projects have not fully achieved their targets. However, as will be seen from the Annex, this is not due to the non-feasibility of project but for external economic effects. 4.04 Loans 1379-TU and 1998-TU have had a great deal of positive effects on the DYB. The increase in foreign credit amounts led to the increases in DYB's capital from TL 2 billion to TL 6 billion in 1979; to TL 50 billion in 1982; to TL 250 billion in 1983. Furthermore, these loans have contributed to improving DYB's foreign contacts, and its cooperatlon with international institutes such as OECD, UNIDO, ADFIAP. The DYB has collaborated with such institutes for mutual exchange of knowledge and experience. Furthermore, the European Investment Bank, German KFW and Japanese credits were obtained as a result of the above mentioned international contacts. 4.05 The World Bank loans, given through DYB, have indirectly contributed both to the success of Turkey's economic polices and its industrialization. Since 1980, within the framework of export oriented economic policy, the SEEs have been reorganized. The DYB also has been reorganized as an Exim Bank to give export credits. The Turkish Exim Bank which was built on the accumulated knowledge and experience of the DYB, has also been designated to give export guaranteed investment credits. - 37 - Annex.1 Table 1 PART II I STATISTICAL INFORMATION TABLE 1 - Related Bank Loans Project Name, Loan Number Year and Amount P ose Annroved Qmmnts Akdeniz Antalya Forest 1974 The project had cost (957-TU) Utilization over-runs which were US$40 million Project in which financed under DYB DYB was the II Loan. financial inter- mediary. DYB I Focus on DYB's 1974 Completed in 1981 (1024-TU) role in the with modest success. US$40 million system of financing of public sector entities. Annex 1 -38 - Table 2 Table 2 - PROJECT TIMETABLE Loan 1379-TU Original Loan Actual or Date Re-estimated Board Approval -- 03/15/77 Loan Agreement -- 03/23/77 Effectiveness 04/30/77 09/21/77 Loan Closing 03/31/81 12/31/82 Borrower DYB Executing Agency DYB Fiscal Year of Borrower Mar. 1 - Feb. 28 Loan 1998-TU Original Loan Actual or Date Re-estimated Board Approval -- 05/21/81 Loan Agreement -- 06/03/81 Effectiveness 08/27/81 08/27/81 Loan Closing 12/31/86 12/31/88 Borrower DYB Executing Agency DYB Fiscal Year of Borrower Mar. 1 - Feb. 28 Annex 1 -39 - Table 3 Table 3 - LOAN DISBURSEMENTS AND RELATED INFORMATION (In US$ million) Loan 1379-TU As of Oct. 31, 1989 Original Disbutsed Cancelled Repaid Outstanding Loan 1379-TU 70.00 63.51 6.49 31.16 32.35 CUMULATIVE LOAN DISBURSEMENTS FY77 FY76 FY79 FY00 FY61 FY62 FY68 FY64 FY6S (1) Planed (X of loan) 1.4 20.0 65.7 94.8 100.0 100.0 100.0 100.0 100.0 (il) Actual (3) 0.0 0.0 6.9 39.2 78.2 86.2 90.4 90.7 90.7 (iii) (11) as U of (1) 0.0 0.0 10.0 41.0 76.2 66.2 90.4 90.7 90.7 Loan 1998-TU As of Oct. 31. 1989 Original Disbursed Cancelled Repaid Outstanding Loan 1998-TU 70.00 66.53 3.47 32.07 34.47 CUMULATIVE LOAN DISSURSEMENTS FY62 FYa FY64 FY65 FY66 FY6 FY66 FG (1) Planed (% of loan) 7.0 38.8 72.6 90.0 100.0 100.0 100.0 100.0 (11) Actual (U) 4.2 6.4 17.8 41.7 07.5 88.8 92.1 95.0 (ti ) (II) as of (1) 60.0 21.8 24.2 40.8 67.8 88.8 92.1 95.0 40 - Annex 1 Table 4 Table 4 - USE OF BASIC RESOURCES Loan 1379-TU No. of No. of Date of Missions Month/Year Weeks Persons Man/Weeks Report Appraisal 07/76 2 3 6 12/10/76 Supervision I 11/77 1.3 1 1.3 12/05/77 Supervision II 05/78 L.5 1 1.5 05/26/78 Supervision III 02/79 1.7 1 1.7 02/26/79 Supervision IV 10/79 0.5 1 0.5 10/19/79 Supervision V 03/80 3.5 L 3.5 04/10/80 Supervision VI 07/81 2.7 2 5.4 08/03/81 Supervision VII 08/82 2.8 2 5.6 10/15/82 Supervision VIII 05/84 1.7 2 3.4 06/08/84 PCR Mission 06/89 0.2 1 0.2 06/30/89 Loan 1998-TU No. of Mo of Date of Month/Year Weeks Persons Man/Weeks Report Appraisal 11/80 Supervision 1 10/81 3 2 6 11/05/81 Supervision II 02/82 1.5 2 3 03/05/82 Supervision III 08/82 0.8 2 1.6 08/19/82 Supervision IV 11/82 0.8 1 0.8 12/13/82 Supervision V 03/83 0.5 1 0.5 04/04/83 PCR Mission 06/89 0.2 1 0.2 06/30/89 Note: Supervision of projects and DYB took place within other related lending operations. Aniox 1 - 41 - Table 5 Table 5 - STAFF INPUTS (staffweeks) Loan. 137F-TU P , MI7 I F f Y Yn81 FTf, WI gf fl ii Preappealeel 13.9 7.0 - - - - - - - - 20.9 Appraissi - 40.0 - - - - - - - 40.6 Nego61.6I.ne 0.3 12. - - - - 12 SupervIslon - 0.4 16.6 9.8 3.0 8.6 '.8 0.2 0. 7.1 40.2 06her __ .5 __ ,- - ,_ - .. -- _ ± Mer-- U - - - - - ---l Tota$ 14.2 80.7 16.6 9.6 8.0 8.6 0.8 0.2 0.1 7.1 114.7 Loan 19.-Tu F¥0 F(f Mfg FYg FY84 FYGS, RI6 fII T49.gi ProappreslsaI 0.1 6.8 - - - - - - 6.9 Appralsal - 85.4 fl - - - - .4 Negltia6tone - 8.4 - - - - - - - 8.4 Supervialon • 0.4 14.8 13.8 3.1 1.6 0.1 0.1 - 88.9 - - -U - - - 0.1_Ja 0the. .. .... .. ..- ... 0:1 - --- .._..: Total 0.1 72.7 14.8 13.8 8.1 1.7 0.1 0.1 106.4 Notas For Loau 1879-TU, there we no aff Inputa reordd doring FY85-FY87. GROSS NATIONAL PRODUCT GROWTN RATE ( At fixed Prices ) RATE OF INCREASE PER CENT SECTOR 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 Agriculture (1.3) 2.7 2.8 1.7 0.1 6.4 (0.1) 3.5 2.4 7.9 2.1 Industry 10.2 6.6 (5.6) (6.0) 7.4 4.9 8.0 10.1 6.3 8.7 9.6 -Nining 39.2 26.7 (16.3) (4.1) (7.3) (5.5) 7.5 7.9 11.9 (6.3) 4.0 -Nanifacturing 7.3 3.6 (5.3) (6.4) 9.5 5.4 8.7 10.2 5.5 9.6 9.9 -Energy 10.6 12.4 8.0 (4.5) 7.0 11.6 2.2 11.1 7.8 15.5 10.9 Services 5.6 4.1 0.2 0.8 3.7 3.5 3.9 5.3 4.0 6.4 6.8 -Construction 5.5 4.1 4.2 0.8 0.4 0.5 0.6 1.9 2.9 8.3 6.7 -Trade 4.9 3.9 (2.3) (2.4) 7.4 4.6 6.9 8.0 4.6 9.4 9.8 :Transport & Coaunication 6.7 2.5 (4.4) (0.6) 0.9 2.2 3.2 7.7 4.8 4.5 6.4 *Pubtic Services 6.0 6.2 4.2 5.8 4.0 5.4 4.2 2.6 3.3 3.7 4.8 -Other Services 5.2 3.8 1.7 1.6 3.2 3.3 2.6 4.5 3.7 5.7 5.1 GDP at factor cost 4.9 4.3 (0.6) (0.5) 3.6 4.5 3.9 6.0 4.2 7.3 6.5 Net factor Income from Abroad (30.0) 4.9 52.8 (24.2) (15.4) (47.4) (87.4) 401.2 2.7 (92.9) 231.1 Indbrect Taxes-Subsidies (1.1) (11.6) (4.2) (3.4) 13.4 10.4 1.7 2.7 15.3 18.5 15.8 GNP at market prices 3.9 2.9 (0.4) (1.1) 4.1 4.5 3.3 5.9 5.1 8.1 7.4 .................................................................... .............. ............................. SOURCES : SIS-SPO Main Economic Indicators, October - 1988 SECTORIAL SNARES IN GROSS NATIONAL PRODUCT ( Per Cent ) SECTOR 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 Afhicutture ZT.6 25. 2M 226 220 20.5 19.6 19.6 18 15.5 1B.0 Industry 19.8 23.0 23.8 25.0 26.1 27.1 28.6 29.4 31.6 31.9 31.6 *Mining 1.8 1.? 1.5 1.6 2.2 2.1 2.3 2.2 2.5 2.1 2.0 -Nanifacturing 16.3 19.5 20.7 21.1 21.7 22.4 23.9 24.2 25.1 25.3 25.7 *Energy 1.8 1.8 1.6 2.1 2.1 2.6 2.4 3.0 3.9 4.5 4.1 Services 52.5 51.7 53.1 52.4 51.9 52.1 51.8 51.0 49.6 49.7 50.2 -Construction 5.3 5.4 5.2 S.2 4.7 4.4 4.1 4.0 3.? 4.0 4.1 *Trade 1.4 13.9 15.0 15.9 16.8 17.0 17.6 18.1 17.2 17.1 17.6 *Transport & Communication 9.1 9.2 9.9 10.3 10.4 10.4 10.5 10.3 10.6 10.3 10.1 *Pubtic Services 12.7 11.2 11.7 9.2 8.0 8.5 8.0 6.1 5.6 5.8 6.1 -Other Services 12.0 12.0 11.4 11.9 12.0 11.8 11.6 12.5 12.4 12.5 12.3 GDP at factor cost 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 ................................................................................................................. S5.RCES SIS-SPO HaGt Economic Indcators October - 1988 m x " t8 UMCTMIAL a~MES IN FIXED CAPITAL 11TEiMTS t At currt pries, In mition YL. > 1977 1978 i luE ma l .--..................--............................................................................. lI PIVATE I n Ulc 5 TOTAL M TOTAL PRIVATE ULIC | TOTAL I TOTAL. IEEIUU OTØERS IL. % SEEIOTERS| TL. 5K I ------------------------- ----- ------ ----- ------ - -I --- ..... ----- ---- lAgriculture 1 12,981 1 464 1 11,906 1 25,351 1 12.7 | 15.100 1 642 1 13.329 1 29,071 1 11.1 1 IRining | 3701 5.454 1.858 7,62 l 3.8 1 500 | 8,508 2,3521 11,360| 4.41 imanifacturing 1 25,470 1 21,883 1 2,151 1 49.504 1 24.8 1 33,850 1 25,087 1 2.813 1 61,750 1 23.7 1 Energy 250 1 9.444 1 6.363 1 16,057 1 8.0 1 240 1 16,139 1 9,024 1 25,403 1 9.7 Tranhportation 5 19,989 1 8.721 1 17.895 i 46,605 1 23.3 1 29.800 | 9,119 1 23.113 1 62.032 1 23.8 1 iTouism I 625 1 111 1 792 1 1.528 1 0.81 1,2605 1291 1,0625 2,4315 0.91 ousing 129,400 1 0 1 2,522 1 31.922 1 16.01 41,5005 0l 3,M 45.292 17.35 EUcsation 5 220 1 15 5,370 1 5.591 1 2.8 1 250 | 1| 6,525 1 6.776 1 2.6 1 Ineatth 80 9 l 1,927 1 2.016 1 1.0 l 100 1 11 1 2.935 1 3,046 1 1.2 1 lOther vIces 2,600 1 451 1 10,417 1 13,468 6 4.7 1 3,500 1 671 1 9.729 1 13.900 1 5.3 1 (Ttot i 91.985 5 46.538 | 61.201 1199.724 | 100.0 |126,100 60.307 74,654 261,061 I 100.0 i .----.-------------l------------.-----.-----.------------.........I. . .. . .. . .. . .. ..----------------- iPrcetag 1 46.15 23.35 30.6| 100.0 5 48.3 100.0 l5.......................5l.........................--------.-------------------------.-------------.----- S~CES : State Ptaning Organsation,1977-1987 Annul Progrs. (' MaIin Emnome Indlcators, February 1989 o 1" 露，O ”細 IO e纏l馴乍I 11。領 闕101 中舊州嗡屆中 C 1.0跑七口 例州勰 l I···……l·····……！···……I···……l···……I···……I···……I···……I···……l··，……！······，···········－····……！ l!0·卹‘12·總二，·龍！o·”!!o·000 IC·館I二侃I乙·才，I“•”“州！ I···……I·····……I···……I···……！···……I···……I···……I···……I···……I－·，……I········－·－············……I 10·00亂l”唱”。館日d韶劬亂l友蘇，胡el餐0．醒江100·卹鳥f t96.，亂乍l‘臼‘闐藝l餐奮．龍‘！奮玆他‘e。•韋。，I •···……！········一l···……I······一I···……！·，·……l···……I······一―···……！···……！······················，……I !Z·嘔19的，鈴I以0．父l心亂之．鳥I弱C.，亂l鳥〔·5 16亂0．視l弱9．江亂l醒S!O以‘Ll”。整。”“啊神l 曆必．0！掬亂’9曆以e .d 19，曆卹91卹，亂曆神擊，tf斗6L&C日亂才煙以91嚇華•叫曆 也露‘·之I乙26〞必‘l忙‘．乙‘I以I戴！”·之籐膩‘．•！遞叩．•I&1 005!．整”講•a! 騙9．祝權卹遞，96亂I觀6．必1 01以』，卯籐I辟．6亂16的‘亂發l以魷，9藝0日O弱，魷l黝整••開I 1 5.01，卯，勿騷奮幼．el號之畢認奮．2屆9L.0騙觔5亂’奮•之荔，鳥口乙9亂I的怔．亂I&！〞勵11 I‘·S奉！Z亂，，玆亂離祝U．乙‘―頃．麗I之望．鈐100·911切d．魷I佻唱．龍I以•．Co 10．必．鰓！.1專．，』劇細口』必I !‘·‘。I。幫，.‘。蘿辦鸞l＇神．&10蘿．。！o。·，。Ie。‘,&I,t,．之‘！膩，.0,1劍坤I&a掬ual I&，勰！‘卹．鉉之，&,.01&“。t&l黛，.&I開·究I&&．的。l祝．&I&&.&l奮”.1,I加‘戒”參‘“•“I I‘·，I‘膩，誠l闐，,,10&．勰I“心，el“·，I‘的一開Iu&.,I&I&,&l馴驢a&―加．u鳥。I 讓‘望―‘葬．&l心館．。雲I弱9．鳥19物‘鳥奮！亂，．遞I亂亂，〞龍I，沁〞9籐15衫I卹怔，令鳥l•J闖方．藝J,I· •·····－…l···•－···，二I···……I，··……I···……！···……I···，·，…I···……I···……！···……！·················，·····……l I寫I·，波！s•頸幼I,asl-xl·，11。劉膽la&1 11 I―織―I-!--l-l―一I-! 糁”•么I&lol！。l，劇”l•二鸚：&1 Ivlo二Iw以l。•1•“Ia，絲I&l! 閱幼aS權 •叩6&！配‘&11 18ECTOR ........................................................................................ . ................ PRIVATE m ic TOTAL TOTAL PRIVAT£ Katc MAL TOTAL SEE I OTEn TL. % SEE i otom Tt. ----------------------------- ......... --------- i --------- ----------- --------- --------- ......... l ......... ----------- --------- JAgricutture 58,600 1 2,= I 69.ffl6 1 131.274 1 10.5 1 92.132 1 2,802 1 102,359 1 197.293 1 12.0 1 Intning 3.500 1 65.367 1 7.792 1 76,659 1 6.1 1 4,750 1 67,490 1 10.282 1 82.522 1 5.0 1 Igmffacturlfig 141,960 1 168,675 1 16.574 1 327,209 1 26.2 1 183,100 1 192.224 1 13.067 1 388.391 1 23.6 1 lEnergy 3.350 1 124.960 1 55.973 1 184,263 1 14.7 1 4.650 1 183.718 1 75.327 1 M3.6% 1 16.0 1 ITra~ tatfan 109.000 1 47.160 1 87.392 1 243,552 1 19.5 1 119.126 1 86,413 1 111,351 1 316.m 1 19.2 1 ITOWIM 3.750 f 397 1 3.344 1 7.491 1 0.6 1 5.500 1 682 1 3,485 1 9,667 1 0.6 1 iftwing 145.269 1 0 1 17,284 1 162,473 1 13.0 1 195,332 1 0 1 15.8U 1 211,154 1 12.8 1 lEducation 1.100 1 n 1 29.984 1 31.156 1 2.5 1 1,470 1 42 1 46.347 1 47.059 1 2.9 1 j~ th 1.200 1 756 13,427 1 15,383 1 1.2 1 1,580 1 1,414 1 18,233 1 21.227 1 1.3 1 lotber SeMces 22,000 1 1,238 48.199 1 71.427 1 5.7 1 33,800 1 1.181 1 73,274 1 108.255 1 6.6 l ----------------------------- l --------- l --------- l ......... i ----------- l --------- l --------- l --------- l --------- l ----------- l --------- ITotet 489.729 1411.463 1 349.715 1 1.250,907 1 100.0 1 641.440 1 535,966 1469,547 1 1,646,953 1 100.0 1 l ----------------------------- --------- l --------- l --------- l ----------- l --------- l --------- l --------- l --------- l ----------- l --------- l jperettme 39.1 f 54.1 1 28.0 1 100.0 1 38.9 1 32.5 1 28.5 1 100.0 1 l l ----------------------------- --------- --------- l --------- l ----------- l --------- --------- l ......... l --------- ----------- l --------- l > 0 0 0 m 1983 1984 ISECTM------.---------------..-- - ---------. ..---.-. .-.-------~. ..-.- PRIVATE PUBLIC TOTAL 5 TOTAL 5 PRIVATE 5 PUBLIC 5 TOTAL 5 TOTAL I $EE lOT%ERS IL. T. SEE O1NERS TL. i 1 | .---....................... ......... ....... ...... --------- ------I------- ------ ------- -- Agricultur 5 126.845 | 2,763 5 115.095 I 244,703 I 11.2 { 178.700 5,400 172,300 5 356,400 { 10.6 mining 6,375 1 102,712 | 12,194 1 121,281 I 5.6 | 9,600 1 156,700 i 16,800 1 183,100 | 5.4 | IManifacturing 237.900 1 251,671 1 11,429 1 501,000 23.0 1 372,800 i 368,800 1 9,200 1 750,800 1 22.3 I JEnergy 5 6,350 1 272,426 1 90,689 1 369,465 1 16.9 1 10,600 1 399,400 1 123.900 1 533.900 1 15.8 l Tr~nsportation j 169.000 1 138,512 I 130,752 1 438,264 | 20.1 1 270,700 1 239.200 1 217.300 1 727.200 1 21.6 I iTourt. 5 7,475 5 1,637 5 4.828 13,940 5 0.6 5 15,700 5 1,700 5 12,700 I 30,100 5 0.9 1 lnouing |262,500| 0| 20,4361 282,936| 13.0| 415,0001 05 46.200 461,200 13.7r Education 5 1,935 1 417 1 52,459 1 54,811 1 2.5 1 3.000 1 600 1 65,900 69,500 2.1 i inestth | 2,0651 1,848| 16,176| 20,089| 0.9| 3,3005 400 1 25,600| 29,300| 0.9| lother services 5 44.600 2,320 5 87,397 | 134,317 5 6.2 | 68,700 5 4,100 5 155,500 | 228,300 5 6.8 5 l -----------------.l------l.-----..-------l------- -----I. . .--- l-------- l-I.....-.....-------------I----- ---------I 1Totet 1 865,045 1 774,306 1 541,455 2.180,806 100.0 1.348,100 1 1,176,300 845,400 1 3,369.800 5 100.0 I .-........................... . ..... ..-----------.i.......-- . . ...... ------------------- ------- ---- lpercetage 1 39.7 1 35.5 1 24.8 1 100.0 1 40.0 1 34.9 1 25.1 1 100.0 | l----------------------------------l--l---------- -------l------ ------- ------ <m cI ø & 4- ( 19 85 1986 ISECTOR ••.---......-.-.--..-------------------------.•.-..------------.-------------.--------------------.----.-------.-.. PRIVATE PUBLIC | TOTAL | TOTAL IPRIVATE i PUBLIC TOTAL | TOTAL SEE | OTHERS TL. I SEE IOTKERS tL. x I ---------------- - -------- -------.----- --------- ------- - ------ -------- ---... ---------.....I.......------.....--- lAgriculture 209.800 9,600 196,700 416,100 | 7.6 234.100 | 11,500 I 343,300 I 588.900 4.1 Minin 15,000 255,600 I 22,100 292,700 | 5.4 51,400 I 322,700 I 26,500 | 400,600 I 2.8 iManifacturing I 766,500 | 360,600 I 11,400 | 1,138,500 20.9 1,271,400 504,500 | 11,300 | 1.787,200 I 12.3 jEnergy 13,600 I 458,400 276,200 I 748,200 I 13.8 48,000 683,200 572,400 1,303,600 | 9.0 Iransportation | 415,300 I 517,500 407,900 | 1,340,700 | 24.6 548,200 875,000 j 744,200 I 2,167,400 j 15.0 ilourisa I 44,900 I 3,800 I 19.000 I 67,700 1.2 | 115.000 I 5,100 I 126,700 I 246,800 j 1.7 iiousing 744,500 | 200 | 69.600 j 814.300 15.0 | 1,355,600 600 97,700 | 1,453,900 I 10.0 Edcation | 8,700 800 123,100 f 132,600 | 2.4 I 16,400 | 300 I 182,000 I 198,700 | 1.4 Health I 11,400| 1,000| 38,1001 50.500 j 0.9| 23,400| 1.000| 71,200| 95,6001 0.7 æO lother Services 104,000 9,109 327,000 440,100 I 8.1 I 157,800 19,700 j 700,500 I 878,000 | 6.1 lTotal 2,333,700 1,616,600 1,491,100 5,441,400 100.0 3,821,300 2,423,600 2,875,800 9,120,700 63.0 lPercetage 42.9 29.7 27.4 100.0 41.9 26.6 31.5 100.0 OQ O1 ID , I ID ISEcTO ...-......-...-......-........... - -...-.-..- PRIVATE I PL=c TOTAL ITOMAL I SE jOTMERS I IL. I x I Agritutture 444,6fi 68,8M 616.400 I 1,129.s0 8.0 I iNining 9.500 257,600 i 41,9 399.000 I 2.8 I i tanfacturing I 1,721,700 I 463,400 i12000 i 2,197.1o I 15.6 i jEnergy I 63,200 I 1,170,5O I 668.600 I 1.902.300 I 13.5 I iTrnsportation 831,500 I 1,342,900 j 1,129,300 I 3,303,700 I 23.4 i laurisø I 244,300 I 6,200 128,OM I 378,500 j 2.7 I iusins 2,857,0M 500 96,900 I 2,954,400 I 20.9 I lEducation 29,600 I 1.000 I 345.000 I 375,600 j 2.7 I ineatth 37,700 2,900 103,900 144,500 j 1.0 lother srvices I 241,600 I 27,300 I 1,07,400 i 1,343,300 I 9.5 I i ................... ............ --------I........ .......I.....I--- yotai 6,570,700 3,341,100 4,216,400 14.128,200 I 100.0 l.--.-------------------------.---------.^.-----.......--- ....-- IPercetage 46.5 23.6 29.8 100.0 I I------------------------------.--------------. -----' SEE's INVESTMENT AND THE SHARE OF DYB ( In Million TL. ) Total Total Disbursments Investments Under DYB Project Year of SEE Loans (a) Percentage (1) (2) (3) (4) 1977 46,538 12,854.0 27.6 1978 60,307 8,318.0 13.8 1979 128,395 13,688.1 10.7 1980 282,522 16,556.2 5.9 1981 411,463 52,778.7 12.8 1982 535,966 66,916.1 12.5 1983 774,306 41,145.0 8.6 1984 1,176,300 64,121.6 5.5 1985 1,616,600 36,656.1 2.3 1986 2,423,600 90,093.7 3.7 o 1987 3,341,100 34,248.0 1.0 ---------------------------------------------------------------------------- ------- (a) The figures in column No. 3 represent the disbursements made for projects which are entered Into contract during the year, as well as those for the projects for which contracts had been made in the previous year including disbursements under the IBRO, EIB and other foreign financial sources. Sources: DYB Annual Reports, 1977-1987. COUNTRY : TURKEY Fl INTERMEDIARY : 0YS LoN NUMBER : 1379-TU,1998-TU PROJECT COMPLETION REPORT Actual Income Statements 1977-1987 INCOME 1977 1978 1979 1980 1981 1982 1983 1984 1985 986 1987 Income from banking srv. * - * * * * - 10.4 82.4 Interests and comissions 7,364.2 7,747.9 9,950.9 11,685.9 16,085.5 27,544.9 40,920.5 54,465.1 64,116.4 111,272.3 142,649.8 Income from port.of stocks and bonds 143.2 442.5 399.7 380.1 1545.1 234.8 224.9 224.9 240.1 124 Profit from fore.exch. transactions 268.2 992.3 2,638.4 S,210.9 5,14.6 6,613.3 11,979.7 16,047.2 397.9 86.8 100.4 Other 24.5 0.6 5.5 0.3 0.5 0.4 0.5 3,381.0 133.6 4.8 5,826.4 TOTAL INCOME 7,800.1 9,183.3 12,994.5 17,277.2 22,775.7 34.393.4 53,125.6 74,118.2 64,888.0 111.498.3 148,659.0 Ln TOTAL EXPENSES Personnel expenditures 18.1 24.5 40.2 66.8 72.4 95.2 132.1 177.8 279.1 567.2 1,468.2 Taxes and duties 0.3 0.2 0.2 0.4 0.4 0.4 0.2 1.5 3.6 5,074.9 122.7 Other expenditures 3.8 5.7 9.3 16.4 20.6 32.1 87.1 121.9 382.4 380.7 5,946.6 Interests and comaisions paid 6,253.3 6,592.3 7,327.4 9,483.4 12,749.7 16,499.3 21,764.0 20,615.2 45,467.2 67,221.3 86,260.4 Losses from fore.exch. transactions 266.3 1,054.0 2,679.1 4,973.1 4,870.1 6,240.2 9,263.8 16,660.2 905.2 19,528.4 Depreciation 0.7 0.7 0.8 0.8 0.8 0.8 3.4 9.6 31.7 62.1 140.2 MiscelI.Losses 1.1 1.2 1,001.0 9.5 3.2 0.5 0.6 524.5 749.1 6.4 TOTAL EXPENSES 6,543.6 7,678.6 11,058.0 14,S50.4 17,717.2 22,868.5 31,251.2 38,110.7 46,913.1 74,217.8 113,466.5 PROFIT BEFORE TAXES 1,256.5 1,504.7 1,936.5 2,726.8 5,058.5 11,524.9 21,874.4 36,007.5 17,974.9 37,280.5 35,192.5 M Source : DYS Annual Reports, 1977-1987' MatalIA nowMI F2 IMIMEDAR : SYS3 P LOMN MIIA s 1379-tu,U1958-Ta PADECT PLEIN SE50RI Actual "etene Sheets 1977-1987 (in local curency ) ASSETS 1977 1978 1979 1960 1981 1962 1985 1984 ASSETS 1965 1986 198? CUEUT ASSETS Avatable assets 15,470.3 19,723.2 20,76.4 20,815.7 15,416.6 31,567.3 48443.? 97,758.2 Available assets 8,651.6 27,307.0 56,830.8 Loans from fore.sources 2,507.? 2,316.1 1,874.9 1,677.3 5,546.2 9,50.8 7,250.9 9,96.4 Placements 406,544.4 574,243.7 749,332.3 Inventories 0.2 0.6 0.8 0.5 0.7 0.8 0.5 2.2 Flied assets 979.7 1,253.1 1,949.5 other assets 42,314.8 50,721.0 44,291.4 17,978.2 22,039.9 22,662.1 22,493.5 20,965.5 41.148.9 5,695.1 107,656.8 TOTAL ASSETS 460,490.5 653,524.8 652,404.0 FIXED ASSETS 35 295.7 39,125.9 49.448.3 65,134.8 112,642.3 168,028.4 209,363.7 252,324.2 TOTAL ASSETS 53,273.9 61,165.8 72,110.4 87,628.3 133,607.8 209,177.3 265,058.8 359,981.0 LIABILITIES LIASILI TIES EXTERMAL SOURCES 288,758.6 440.515.2 628,523.4 EQUITY 162,906.8 196,614.5 206,333.6 CURRENT LIA8ILITIES Paid in capital 131,628.8 141.210.3 142,165.1 Loans obtained 872.2 1,383.7 1,238.7 1,636.0 1,698.8 2,725.1 6 343.2 8.067.8 Reserves 31,278.0 55,604.2 64,168.8 Other s-t debt 5,981.6 6,952.6 7,167.6 8,629.1 9,733.4 29,297.1 21,255.0 56,760.2 PROFIT 8,825.1 16,195.1 17,546.8 6,853.8 6,336.3 8,406.3 10,267.1 11,432.2 32,022.2 27,596.2 64,828.0 LONG TERN DEBT TOTAL LIABILITIES 460,490.5 653,524.8 852,404.0 Outstanding bonds 36,910.9 42,161.1 48,351.0 54,953.0 61,974.0 60.214.0 58,075.0 44,154.0 I Loans obtained 240.7 184.9 126.2 64.6 29,406.5 36 000.0 36,000.0 .. ..... .... . = .................. Deposits 1,289.8 1,289.6 1,289.8 1,289.9 2,074.9 4,902.1 1,284.1 ** IFF taken over 338.7 322.3 302.3 278.7 255.8 231.4 205.5 178.0 foreign sources 3,746.0 4,346.1 6,813.4 12,258.8 17,219.3 17,349.7 21,542.6 23,713.3 Deposits against bond purch.demands -- 49,066.0 41 429.7 Others 226.7 -... 1SU726.0 42,754.8 48,304.2 56,682.7 68,845.0 110,930.5 118,697.2 166,173.2 125,201.0 EQUITY CAPITAL 3,665.3 4,525.3 6,821.3 8,516.2 11,245.1 58,457.9 71,287.4 169,952.0 TOTAL LIABILITIES 53,273.9 61,165.8 72,110.3 87,628.3 133,607.8 209,177.3 265,056.8 359,981.0 8888888889888UUU88UW888 8.sagaUU.ssaessa 2UsUDUUUUUtsUssesaUassasassmassassssasessassanaasasseasass Source: 0Y Annual Reports, 1977-1987 COUNTRY : TURKEY I3 INTERNEDIARY : 0Y8 LOAN NUMBER : 1379-I1,1998-TU PROJECT COPLETION REPORT Actual Financial Ratios 1977-1987 | 1977 1978 1979 1980 1981 1962 1963 1984 1985 1986 1987 IL.T. Debt/Equity Ratio I 11.66 10.67 8.33 8.08 9.86 2.03 2.33 0.73 - - ITotat Liability/Equity Ratio 14.53 13.51 10.57 10.28 11.88 3.57 3.71 2.11 2.83 3.32 4.13 I ~II lCurrent Ratio 2.62 2.64 7.87 2.19 1.83 1.28 2.01 1.66 I ~I I ~I IProfit Before Taxes as % of I Average Total Assets 2.00 2.00 2.00 3.00 2.36 1.41 0.08 0.10 0.039 0.057 (Profit Before Taxes as X of Average Equi ty 34.26 33.25 28.38 32.01 44.98 19.72 30.68 21.18 11.03 18.94 I*)Interests paid as I of I | Average Total Assets I 11.73 10.77 10.16 10.82 9.54 7.88 8.21 5.70 9.87 10.28 10.11 I II jAdainistfrative & General I I Expenses as % of Foreign resources ( lexpenditures 1 0.34 0.39 0.50 0.62 0.73 0.82 0.10 0.11 1.46 1.41 - ( I I I Source: DY6 Annual Reports, 1977-1987 (*) for the years,1985,1986,1987 this ratio is given as profit after taxes as % of average total assets. COUNITR : TURKEY INTERMEDIARY s DYS LOAt NMBER : 1379-TU. 1998-TU PROJECT COMPLETION REPORT LISTING OF SUBPROJECTS FIMANCED UNDER LOANS SP2 Bank total "li on DFC Sub-borrower's Amut Financfng Type *&me Procts (1) (IL.) of S.P. Location Owership 1379-TU A* i TAPtIPRO HEMP MILL Jute Yarn 2 965 103 71 67,534,960 E-H R a A- 2 BO20f CERAMICS Cermic tiles i26.i28.6i 262 421 666 N R G A- 3 KANRANANNARAPt TEXTILE Yarns-Nousehotd Textiles 57 403.73 4 54f 376 E-M U a A- 4 BOLU DECORATING PAPER PRINTING Decorating Paper Printing 20843,68129 93 W'4sl M-N U a A- S FfLTOS FIRE BRICK Fire Brick 2,208,173.98 228,556,7" E-N R a A- 6 DIYARBAKIR CARPET AND WOOL IND Machine-Hade Carpet 3,265,096.31 6S,026,386 E U G A- 7 BONYAN BLANKET FACTORY Blanket 2,662,044.34 17,757,341 N R G A- 8 NERINOS TOPS. ENTERPRISE Taps 8,109,220.86 E U a A- 9 SEKA AKDENIZ Kraft Le*ver -Timer 19.336,682.40 3,689.278,512 N R a A- 10 IZMIR COTTON TEXTILE PROJECT Clothing 1,S55,43.74 134,904,280 E U G A- 11 CIRCUIT BREAKER FACTORY Cur.Breaker 5,599,115.77 N U 6 A- 12 T2NIT CORRUGATED CARDBOARD Cardboard box 2,706,279.77 431,619,072 E-N U 0 B- 1 ANKARA MACHINERY FACTORY Sugar 1,700,581.35 94:000.000 E U a B- 2 VAN SHOE FACTORY Shoe 1,201,263.08 344,603,74 H U G 8- 3 KARS SHOE FACTORY Army Shoe 2,303,572.86 251,714,300 N R G 3- 4 SINOP SHOE FACTORY Shoes 1,106,743.60 332,509,2 N U G 8- 5 IZNTR COTTON TEXTILE PRINTING Cotton Textile printing 1,860 276.06 30,238,594 E U G B- 6 KESORLU SULPHUR Sutwre 912,968.59 170,140,181 N R G B- 7 SEKA PAPER MILL Paper 1.49,788.67 135, E R 6 B- 9 KONYA CHROMIUM-MAGNESITE Fire Brick 1,046,276.6 77,547,7 E-H U G 1998-TU A- i ANKARA SUGAR FACTORY Sugar 3,585,979.14 3,650,194,287 E U G A- 2 ILGIN SUGAR FACTORY Sugar, Metase 6,148,249.29 7,692,728,624 NR 13 A- 3 SUSURLUK SUGAR FACTORY Sugar, Hetese 8,027,516.72 2.843,100,846 E R G A- 4 KARAB(OK BLAST FURNACE FEED Pig Iron 10,794,413.00 1,901,000,000 E-M R G A- 5 KARASOK BLAST FURNACE STOVE Pig Iron 9,273,387.00 -E-N 2 G A- 6 HURGUL HMNE.DEV.CONS.%OD. Copper-Pyrite Cons. 15,174,983.00 2,650,789,640 E-M R G A- 7 SAMSUN COPPER SM4ELTER B.Copper-S.Acid tl,119.553.00 3,317,188,481 E-M R G TECHNICAL AID Sugar 942,354.59 TOTAL 128,602,080.49 28,530,503,277.00 (1) this figures represent the cumulat ile amont of the loans granted by YB. SOURCES 01D8 LOAN REPORTS, 0 PROJECT APPRAISAL AND REVIEW REPORTS. COUNTRY TURKEY FS INTERMEDIARY :DB LON NUBER : 1379-TU, 1998-TU PROJECT COMPLETION REPORT Projected vs Actual Operations 1977-1987 (Omestic Currency in TL, Foreign Currency in US) Year Ending 1977 1978 SubProj. Sub-borrower'a DOMESTIC FOREIGN DOMESTIC FOREIGN Nignso Nw COMNITMENTS DIS8URSEMENTS COIMITMENTS DISBURSENENTS CONINTMENTS DISAURSENENTS COMITMENVTS DISBURSEMENTS 1379-TU 3- 1 ANKARA MCWINERY FACTORY 46,000,000 46,000,000 - - 25,500,000 25,500,000 1,453,894 B- 6 KE'SORLU SULPNUR 30,000,000 24.568,101 * - 38,237.000 26,308,151 912,941 A- 11 CIRCUIT BREAKER FACTORY * * * - * * * * 6* 7 SEKA PAPER MILL SO,000,000 50,000,000 - * 34,000,000 7,254.313 1,959,725 - A- 12 TZNIT CORRUGATED CARDBOARD 33.000,000 33,000,000 - - 1,500,000 * - - A- 9 SEKA AEDENItZ 455,000,000 455,000,000 - * 275.000,000 275,000,000 20,000.000 - 8- 2 VAN SHOE FACTORY 30 584.000 17,317,661 17,453,000 17,43,000 1,005,857 - B- 3 KARS SMOE FACTORY 33:327,000 14 162,843 * * 17,715,000 12,797,05 1,006,112 - 8- 4 SINOP SHOE FACTORY 24,643,000 14 583,411 * * 12,728.000 12,28,000 1,005,657 - 8- S I2NTR COTTON TEXTILE PRINT 2,054,000 2 054,000 * * 2 519000 19000 1,976,118 759,665 A- I TAPtKPRO NEMP MILL - * * - 2f,178,000 1,010 - A- 2 S0200K CERAMICS 36,000,000 36 000 000 - * 66,446,000 6S,f,133 - A- 3 KANRANMARAPt TEXTILE 15,807,000 1,807,000 - - * * * A- 4 O0L DECORATING PAPER PRIM * - M 2.858,000 2,858000 A- 5 FILYOS FIRE BRICK - - - * 7,645,000 1,949,843 * * A- 6 DtYARBAKIR CARPET AND 100L * - - * * * - * A- 7 80AN BLANKET FACTORY - * - - 4,000,000 4,000,000 - * A- 8 NERINOS TOPS. ENTERPRISE - - - - 2,500,000 * - * A- 10 IZMIR COTTON TEXTILE PROJE - - * * 13,563,000 5,081,639 - - 0- 9 KONYA CNROMIU-MAGESITE - - - - * - - 1998-TU ** A- 6 MURGUL NI#E.OEV.CONS.NOD. - - - * A- 7 SAtSUN COPPER SMELTER - - * - * - - A- 5 KARABOK LAST FURNACE STOY - * * * * * * A- 4 KARA8OK BLAST FURNACE FEED - * * * - - A- 3 SUSURLUK SUGAR FACTORY 93,730,000 43 848,214 - 73.000.000 65 150,331 - A- I ANKARA SUGAR FACTORY 70.000,000 54,780,287 * * 63 000 000 63000,000 - A- 2 ILGIN SUGAR FACTORY - * * * 245.000,000 245000,000 - TECNICAL AID * - - * * * TOTAL 920,145,000 807,121,517 0 0 929,842,000 840,743,125 29,320,504 759,665 SOURCES : Dye REPORTS (*) The difference between the figures in Table SP2 are originated from the amount of the loans granted before 1977 . (**) in addition to main commitments sam technical aid have taso been used by these two establsitments , x (USS1,000,000 Technical aid for Turkish Sugar factories and tUS800,000 for Turkish Iran and Steet Works). (***)Disbursement prior to 1982 were from DYB's own resources. COUNTRY : TURKEY FS INTERMEDIARY : DYB LOAN NUMBER : 1379-TU, 1998-TU PROJECT COMPLETION REPORT Projected vs Actual Operations 1977-1987 (Domestic Currency in TL, Foreign Currency in US) Year Ending 1979 1980 SubProj. Sub-borrower*s DOMESTIC FOREIGN DOMESTIC FOREIGN Nmer Name COMMITMENTS DISBURSEMENTS COMMITMENTS DISBURSEMENTS COMMITMENTS DISBURSEMENTS COMMITMENTS DISBURSEMENTS 1379-TU 6- 1 ANKARA MACHINERY FACTORY 16,500,000 16,500,000 1,771,047 1,628,836 - - 1,771,047 B- 6 KE*BORLU SULPHUR 3,308,000 3,308,000 912,941 902.713 115,110,000 115,110,000 912:941 - A- 11 CIRCUIT BREAKER FACTORY * * 7,256,665 419,520 - 7,256,666 2,445,430 B- 7 SEKA PAPER MILL 18,800,000 - 1,959,725 76 342 28,000,000 28,000.000 1,959.725 105,351 A- 12 ZMIT CORRUGATED CARDBOARD 8,000,000 2783,653 366,495 - - 2,783.653 2,016,815 A- 9 SEKA AKDENIZ 347,100,000 347,100,000 20,000,000 6,255,212 414,960,000 414,960,000 20,000,000 8,714,246 B- 2 VAN SHOE FACTORY 43,597,000 28,833,083 1,005,857 123,843 10,000,000 10,000,000 1,198,851 979,557 B- 3 KARS SUOE FACTORY 39,088,000 32,115,510 1,006,112 355,546 17,000,000 17,000,000 2,504,782 1,475,939 B- 4 SINOP SHOE FACTORY 6,500,000 5,802,058 1,005.857 127.278 30,000,000 30,000,000 1,295,618 929,081 B- 5 VZMIR COTTON TEXTILE PRINT 18 632 000 10 4434 1 976,118 1 065918 15000 000 15,000,000 1 976,118 - A- 1 TAPtKOPRO HEMP MILL 46 4,000 ,970 ,906,109 ,075 19,6000 19,000,000 2,964,487 311,121 A- 2 BOZYOK CERAMICS 67,000,000 65,958,735 208 555 97,637 41,820,000 41,820,000 321 268 228,503 A- 3 KANRAMANMARAPt TEXTILE * - 63,382 57,403 * - 63,382 A- 4 BOLU DECORATING PAPER PRIN - - 3,470,118 247,111 - - 3,470,118 1,032,411 A- 5 FILYOS FIRE BRICK - - 3,438,824 - 25,000,000 25,000,000 3,438,824 1,639,733 A- 6 DIVARBAKIR CARPET AND WOOL - - 3,285,000 685,473 - * 3,285,000 2,124,055 "' A- 7 BONYAN BLANKET FACTORY - - 2,629,255 - * 2,629,255 - A- 8 MEros TOPS. ENTERPRISE - - 8,648,784 911,807 - 8,648,784 2,928,597 A- 10 VZMfR COTTON TEXTILE PROJE 28,616,000 14,857,826 1,834,471 55,809 25,000,000 25,-..,000 1,834,471 1,044,697 5- 9 KONYA CHROMIUM-MAGNESITE 9,000,000 9,000,000 1,194,118 63,479 15,000,000 15,000,000 1,194,118 -1,462 1998-TU *** A- 6 MURGUL MINE.DEV.CONS.MOD. - - - * - - - - A- 7 SANSUN COPPER SWELTER - - - - - - - - A- 5 KARABOK BLAST FURNACE STOV - * - * - - - - A- 4 KARABOK BLAST FURNACE FEED - - - * - - - - A- 3 SUSURLUK SUGAR FACTORY 75 000,000 75,000,000 - - 120,000,000 120,000,000 - - A- I ANKARA SUGAR FACTORY 100,0000000 100,000,000 - * 132,220,000 132,220,000 - - A- 2 ILGIN SUGAR FACTORY 130 ,000,000 130,000,000 - * 747,000,000 747,000,000 - - TECHNICAL AID - TOTAL 951,276,000 878,373,616 67,356,591 16,008,497 1,755,110,000 1,755,110,000 69.509,108 27,006,998 O ' 0 %J c0w"t : TURKEY FS INTEREDIARY : DYB LOAM tAER : 1379-TU, 1998-TU PROJECT COMPLETION REPORT Projected vs Actual Operations 1977-1987 (Domestic Currency in TL, Foreign Currency in USS) Year Ending 1981 1982 %Woj. Sub-borrower's DOMESTIC FOREIGN DOMESTIC FOREIGN Numr Name CONITNENTS DISGURSEMENTS COMITMENTS DISBURSEMENTS CONMITNENTS DISBURSEMENTS COMNITMENTS DISBURSEMENTS 1379-TU 8- 1 ANKARA MACHINERY FACTORY - * 1,771,047 - 1,771,047 71.745 6- 6 KE*IBORLU SULPHUR - 912941 9,300 - 912,968 954 A- 11 CIRCUIT BREAKER FACTORY - 7,256666 2,073,345 - 7,256666 458,810 3- 7 SEKA PAPER KILL 39,478,000 39,478,000 1 959,725 797.003 - - 1,9 725 491,091 A- 12 U2NIT CORRUGATED CARDBOARD * * 2,783,653 322,968 - - 2,783,653 - A- 9 SEKA AKDENIZ 1,354 000 000 1,354,003,000 20,000,000 2,405.868 680,000,000 395,288,512 20,000,000 1,245,021 a- 2 VAN SMOE FACTORY 123,000.000 123,000,000 1,233,851 94,659 148,000,000 148 000,000 1,233,851 3,203 a- 3 KARS SHOE FACTORY 41.000 000 41,000,000 2,504,782 455,953 158,000,000 134,638,242 2,504.782 14,870 8- 4 SfVOP SNOE FACTORY 129,000.000 121,395,823 1,295,618 48,647 148,000,000 148,000,000 1,295,618 1,735 3- 5 IZMIR COTTON TEXTILE PRINT * 1 976118 26 179 - - 1 976 118 8,523 A- 1 TAPtK0PRO HEMP KILL - .4,448 1,999 - - $,96 ,103 81,907 A- 2 BOZdYOK CERAMICS - 326 528 819 - - 326 528 - A- 3 KANRANANMARAPt TEXTILE B, * 6382 - - 6,382 - A- 4 BOLU OECORATING PAPER PRIN 242 050 000 60,527,451 3,470,18 442,165 30422,000 30,422,000 3,470,118 1.087,740 A- 5 FILYOS FIRE BRICK 239,000:000 89,310,602 2,638,824 513,246 - 2.638,824 55,193 4- 6 DIYARBAKIR CARPET AND LOOL 83 000 000 30,042,386 3,385,000 255,799 25,000,000 25,000,000 3,385,000 161,685 A- 7 BONYAN BLANKET FACTORY 56,840.000 9,312,756 2,965,255 338,692 - * 2,965,255 2,131,120 A- 8 NERINOS TOPS. ENTERPRISE - - 8,658,794 4,145353 * 8,578,784 123,461 A- 10 UZMil COTTON TEXTILE PROJE 78 945 000 70,456,638 1,951,591 373,568 19,508,17 19.508.177 2,021,591 11.368 B- 9 KONYA CHRONIUM-NAGNESVTE 30,000,000 10,405,773 1,194,118 317.040 - * 1,194,118 3,384 1998-TU *** A- 6 MURGUL MINE.DEV.CONS.NW. 4,130,000 . - - - - 16,000,000 - A- 7 SANSUN COPPER SMELTER . - - - 75,000,000 17,556,640 - - A- 5 KARASOK BLAST FURNACE STOV - - - - - 10 600,000 - A- 4 KARAS0K BLAST FURNACE FEED 650 000 000 650,000,000 - - 501,000,000 501,000,000 10.900 000 3,545 418 A- 3 SUSURLUK SUGAR FACTORY 335,000,000 335,000.000 - - 314,850,000 314,850,000 8 100,000 220,845 A- 1 ANKARA SUGAR FACTORY 339 269 000 339,269 000 - - 522 576,000 522.576,000 5 100 000 180,114 A- 2 ILGIN SUGAR FACTORY 1.940.513,000 1,940,513,000 - - 1,485,315,000 1,485,315,000 8,500,000 623,707 TECHNICAL AID *1000,000 - TOTAL 5,685,225.000 5,213,711,429 69,312,459 12,624,603 4,107,671,177 3,742,154,571 129,503, t31 tO,52t,894 SOURCES : DYB REPORTS o (*) The difference between the f le g (*) In addition to main commitment 0 1 COUNTRY TURKEY F5 INTERMEDIARY DYB LOAN NUMBER 1379-TU, 1998-TU PROJECT COMPLETION REPORT Projected vs Actual Operations 1977-1987 (Domestic Currency in TL, Foreign Currency in USS) Year Ending 1983 1984 Subproj. Sub-borrower's DOMESTIC FOREIGN DOMESTIC FOREIGN Nmber #ame CONITMENTS DISBURSENENTS COMMITMENTS DISBURSEMENTS COMMITMENTS DISBURSEMENTS COMMITMENTS DISBURSEMENTS 1379-TU 8- 1 ANKARA MACHINERY FACTORY - * 1.711,047 * - 1,711,047 - B- 6 KE'IBORLU SULPHUR - * 912,968 - * * 912,941 - A- 11 CIRCUIT BREAKER FACTORY - 7,256,666 202,008 - - - - B- 7 SEKA PAPER KILL - - 1,959.725 - - - - - A- 12 IZMT CORRUGATED CARDBOARD * - 2,783,653 - - - A- 9 SEKA AKDENVZ 197,930,000 197,930,000 20,000,000 716,335 - - 20,000,000 - B- 2 VAN SHOE FACTORY * 1,233,851 - * * * - B- 3 KARS SHOE FACTORY * * 2,504,782 1,263 - - - 8- 4 SINOP SHOE FACTORY 1295,618 - - - - - B- 5 IZNIR COTTON TEXTILE PRINT 1976 118 * * - - * A- 1 TAPtK0PRO HEMP KILL - 1 , ,103 * * - - - A- 2 BOZOYOK CERAMICS * - 326 528 - - - - * A- 3 KANRANAMMARAPt TEXTILE - * 63,382 - * * * - A- 4 BOL DECORATING PAPER PRIM * - 3,470,118 33,652 - - - - A- 5 FfLVOS FIRE BRICK 250,000.000 56,688,244 2,638,824 - * * * * A- 6 DIYARBAKIR CARPET AND WOOL - * 3 385 000 38 081 * *o A- 7 BONYAN BLANKET FACTORY 12,000,000 4,444,585 2,965.255 192:231 - - - * A- 8 NERINOS TOPS. ENTERPRISE * * 8,578 794 * * - - - A- 10 IZMIR COTTON TEXTILE PROJE - * 2,051,591 - - - - * B- 9 KONYA CHROMIUM-NAGNESITE - - 1.194,118 909 - - - * 1998-TU *** A- 6 URGUL MINE.DEV.CONS.MOD. 200 000.000 97,261,711 16,000,000 1.299.886 490,000,000 421,539,790 16,000,000 2,790,952 A- 7 SAMSUN COPPER SMELTER 174,360,000 26,949.199 - * 25,000,000 14,907,100 - A- 5 KARABOK BLAST FURNACE STOV * * 10,000,000 - - - 10000,000 - A- 4 KARA8OK BLAST FURNACE FEED 400,000,000 400,000,000 10.900,000 1,711 824 350,000,000 350,000,000 10 900,000 1.952,325 A- 3 SUSURLUK SUGAR FACTORY 246 000,000 246,000,000 8 100,000 304,525 350,000,000 350,000,000 8,100,000 2,345,771 A- 1 ANKARA SUGAR FACTORY 338,349,000 338,349,000 5,100,000 228 273 300,000,000 300,0000000 5 100,000 982,568 A- 2 ILGIN SUGAR FACTORY 1,239.000,000 1,055,916,231 8 500,000 538,069 100,000,000 100,000,000 8,500,000 3,692,425 TECHNICAL AID * * 1,800,000 - * * 1,800,000 316,332 TOTAL 3,057,639,000 2,423,538,970 129,673,141 5,267,056 1,615,000,000 1,536,446,890 83,023,988 12,080,373 O 0 COUNTRY : TURKEY INTERMEDIARY : DY8 LON NUMBER : 1379-TU, 1998-TU PROJECT COMPLETION REPORT F5 Projected vs Actual Operations 1977-1987 (Domestic Currency in TL. Foreign Currency in USS) Year Ending 1985 1986 Sdw*j. Sub*borrower's DOMESTIC FOREIGN DOMESTIC FOREIGN muvb Name COMMITMENTS DISBURSEMENTS COMMITMENTS DISBURSEMENTS COMMITMENTS DISBURSEMENTS COMITMENTS DISBURSEMENTS 1379-TU 8- 1 ANKARA MACHINERY FACTORY * * 1,711,047 B- 6 KE*VBORLU SULPHUR * * 912:941 A- 11 CIRCUIT BREAKER FACTORY * * 7,256,666 8- 7 SEKA PAPER MILL * * - A- 12 TWMIT CORRUGATED CARDBOARD - A- 9 SEKA AKDEN2 - * 20,000.000 3- 2 VAN SHOE FACTORY * 8- 3 CARS SHOE FACTORY * 8- 4 SINOP SHOE FACTORY * B- S fZIR COTTON TEXTILE PRINT * A- 1 TAPtK]PR0 HEMP MILL - A- 2 80CYOK CERAMICS * A- 3 KANRAMANMARAPt TEXTILE - A- 4 BOLU DECORATING PAPER PRIM * A- 5 FILYOS FIRE BRICK * A- 6 DTYARBAKIR CARPET AND UOOL * A- 7 BONYAN BLANKET FACTORY * A- 8 MERINOS TOPS. ENTERPRISE * A- 10 TZNR COTTON TEXTILE PROJE - 6- 9 KONYA CHROMIUM-MAGNESITE * 1998-TU *** A- 6 MURGUL MINE.DEV.CONS.MOD. 1,206,235,000 731,988,139 25,000.000 7,637,513 1,400,000,000 1,400,000,000 16,000,000 2,800,181 A- 7 SANSUN COPPER SMELTER 600,000,000 400,000,000 11,100,000 5,375:627 A- 5 KARABOK BLAST FURNACE STOV 10 000,000 5,227,747 * - 8,457.000 3,590,753 A- 4 KARAB0K BLAST FURNACE FEED 10,900,000 1 814,962 - - 10,943,000 1,186,355 A- 3 SUSURLUK SUGAR FACTORY 50,000000 50,000,000 8.100,000 3,140.776 626,600,000 626,600 000 9,129,597 2,015,206 A- 1 ANKARA SUGAR FACTORY 100,000,000 100,000,000 5,100,000 1,061,652 800,000,000 800,000000 4,200,000 1,133,370 A- 2 ILGIN SUGAE FACTORY 250,000,000 250,000,000 8,500,000 685.928 1,113,400,000 838,984.393 6,111,399 608,119 TECHNICAL AID 1,800,000 526,021 - - 1,800,000 * TOTAL 1,606,235,000 1,131,988,139 99,280,654 20,094,599 * 4,340,000,000 4,065,584,393 67,740,996 16,709,611 00 C 0 COUNTRY TURKEY INTERMEDIARY DY LAN MIBER 1379-TU, i998-TU PROJECT COMPLETION REPORT F5 Projected vs Actual Operations 1977-1967 (Domestic Currency in TL, Foreign Currency in USS) Year Ending 1987 TOTAL Subpro). Sub-borrower's DOMESTIC FOREIGN DOMESTIC FOREIGN Nmber Nam COMMITMENTS DISBURSEMENTS COMMITMENTS DISBURSEMENTS COMMITMENTS DISBURSEMENTS (') COMMITMENTS DISBURSEMENTS 1379-TU 8- 1 ANKARA MACHINERY FACTORY - - - * 88,000,000 88,000,000 1,711,047 1,700,581 B- 6 KE T BORLU SULPHUR - - - 186,655.000 169,294.252 912,968 912 96? A- I1 CIRCUIT BREAKER FACTORY . - - - * - 7,256,666 5,599 113 8- 7 SEKA PAPER MILL - - - * 170,278.000 124,732,313 1.959.725 1,469.787 A- 12 V2NIT CORRUGATED CARDBOARD - - - * 42,500000 33,000,000 2,783,653 2,706,278 A- 9 SEKA AKDEMfZ - - * * 3.723:990,000 3,439,278,512 20 000.000 19,336,682 8- 2 VAN SOE FACTORY - - - - 372.634,000 344.603,744 1,233,851 1,201,262 8- 3 KARS SHOE FACTORY - - - * 306.130.000 251,714,300 2,504.782 2,303,571 8- 4 SINOP SHOE FACTORY - * - * 350.871.000 332,509,292 1,295618 1,106,741 8- 5 IZMIR COTTON TEXTILE PRINT - - - - 38,205 000 29,827,434 1.976 118 1.860 285 A- I TAPtKUPRO HEMP HILL - - - 86,311,000 67,534,980 2 ,103 2,96,.102 A- 2 BOZOYOK CERAMICS - - - - 211 266 000 209 030,868 326 528 326 959 A- 3 KAtlNAMMARAPt TEXTILE - - * - 1$,80,000 1$,807,000 63,382 57,403 A- 4 BOLU DECORATING PAPER PRIN - - - 275,330,000 93.807.451 3.470,118 2.843,09 A- 5 FILYOS FIRE BRICK - - - - 521,645.000 172.948 689 2,638,824 2,208 172 01 A- 6 DIYARBAKIR CARPET AND OOL - - - - 108,000.000 55.042.386 3.385,000 3.265093 0 A- 7 BONYAN BLANKET FACTORY - - - - 72,840.000 17.757.341 2,965255 2,662,043 A- 8 MERINOS TOPS. ENTERPRISE - - * - 2,500,000 - 8,578,794 8,109,218 A- 10 IZMIR COTTON TEXTILE PROJE - - * - 165,632,177 134.904,280 2,021591 1855,442 B- 9 KONYA CHRONIUN-MAGNESITE - - - 54,000,000 34,405,773 1,194.118 1,046,274 1998-TU *** A- 6 MlRGUL MINE.DEV.CONS.1OD. - - 16,000,000 646.451 3.30,365,000 2,650,789 640 16.000,000 15,174 983 A- 7 SAMSUN COPPER SMELTER 5,265,810,000 2,857,775,542 11,100,000 5,743,926 5,940,70000 3,317,188481 11.100,000 11.119553 A- S KARABOK BLAST FURNACE STOV - - 8,457,000 454,887 6 8.457,000 9,273,387 A- 4 KARABOK BLAST FURNACE FEED - * 10 943 000 583,531 1 901 000 000 1 901 000,000 10,943,000 10,794.415 A- 3 SUSURLUK SUGAR FACTORY 600,000,000 600,000,000 9,129,597 - 2,884,180,000 2,826,448,545 9,129 597 8,027,123 A- I ANKARA SUGAR FACTORY 900 000 000 900 000,000 4 200 000 * 3 665 414 000 3 650 194 287 4,200.000 3.,977 A- 2 ILGIN SUGAR FACTORY 900,000,000 900,000.000 6111.399 - 8,150,228,000 7,692.728.624 6.111,399 6,148248 TECHNICAL AID - - 1.800,000 100,000 - * (**1,800,000 942,353 .--.. -..-..........------------------------------------------------------------------------------------------------------------------------------- TOTAL 7,665,810.000 5,257,775,542 67.740,996 7,528.795 32.633,953.177 27,652,548.192 135,184,137 128,602091 0 COUNTRY : TIKEY SP INTERIEDIARY : DYS LON INIMER : 1379-TU, 1998-TU PROJECT COMPLETION REPORT PERFORMANCE OF SUBPROJECTS (1.000 TL.) Vear Ending Financial AR* Economical ROO Investment Cost Project Completion Jobs created Subpro Sub-borcower's ( S ) ( X ) (Currency) Latest (Months) (Nuaber) Overrun Estim. Review Overrun actual Overrun actual underrun Number Name Estim. actual (1) Estim. actual (1) Estim. Year actual (1) Year ( % ) Estim. (1) ( % ) Estim. (1) ( % ) 1379-YU A- I TAPtKOPRO NEMP MILL 51.90 80.10 -116,380 1977 461,055 1980 296 35 60 T 39 40 3 A- 2 BOZOYOK CERAMICS 33.10 44.72 25.70 * 1 8 1976 906913 1980 355 26 55 108 242 734 203 A- 3 KAVRAMMARAPt TEXTILE 99.00 * 60.50 -Ili620 1977 Ili 620 1977 18 1349 A- 4 BOLU DECORATING PAPER PRINTING 31.20 24.67 20.70 -305,6 1978 1,383.165 (t) 1983 352 32 72 125 54 54 A- 5 FILYOS FIRE BRICK 30.20 * 43.90 285390 978 3,358,409 1982 1,0 36 105 192 65 A- 6 OIYARBAKIR CARPET AND L00L IND 57.74 - 52.87 -153897 978 1,010,737 1963 557 36 65 82 190 A- 7 8ONYAN BLANKET FACTORY 37.40 35.00 26.78 -18,000 978 1,198,686 1983 548 57 88 S5 294 4S4 54 A- 9 SEKA AKDENVZ 12.90 5.79 16.50 - 4,192,000 976 48,163,807 ) 1,049 48 118 146 1210 1091 (10) A- 8 HERIMOS TOPS. ENTERPRISE 48.90 67.30 -397,765 97 1,573,826 1981 296 42 55 30 440 401 (9) A- 10 IZMIR COTTON TEXTILE PROJECT 30.20 31.50 221,040 1978 970,926 1981 339 22 52 134 7 86 10 A- 1 CIRCUIT BREAKER FACTORY 38.60 693J75 979 3,820,327 1984 451 31 89 186 414 163 (61) A- 12 121IT CORRUGATED CARDBOARD 40.71 35.00 32.69 -119,07 978 36,411 1980 206 42 48 14 .-3 (7) 8- 1 ANKARA MACNINERY FACTORY 35.40 35.40 51.80 139.205 977 227.605 1979 64 29 41 41 110 110 - 8- 2 VAN SNOE FACTORY 24.20 - 23.40 *241,71S 9 1,052.105 1982 335 49 76 57 432 432 - 8- 3 KARS SlICE FACTORY 37.00 - 268,590 1978 1,371,478 1982 411 76 66 4 312 (34 B- 4 SINOP SHOE FACTORY 31.60 * 22.20 -219,35 1977 714,000 1982 225 37 70 89 45I 351 22) B- S VZIR COTTON TEATILE PRINTING 45.70 26.20 43.90 *S15,08 197 488,830 1980 211 3? 58 57 27 67 148 B- 6 KE'1BORLU SULPHUR 33.50 39.80 -100,753 1976 140145 1979 39 30 43 43 136 B- 7 SEKA PAPER MILL 68.00 * 33.00 -87160 1978 457,062 1979 424 47 84 78 57 - B- 9 KONYA CHROMIUM-MAGNESWTE BRICK 77.20 72.00 142.00 7004 1979 317,511 1986 353 22 9 - 1998-TU A- I ANKARA SUGAR F~ACTORY 18.10 5.32 24.10 - 661,268 1977 12,057,700 1986 ,2 3 45 132 193 981 1 (85) A- 2 ILGIN SUGAR FACTORY 22.60 7.40 26.10 - 3,257,941 1978 27,916,074 1986 757 82 1" t450 1530 6 A- 3 SUSURLUK SUGAR FACTORY 12.00 40.00 19.50 -81D,00 1976 19,829,730 1986 2,345 47 1 203 A- 4 KARA8OSC BLAST FURNACE FEED 20.97 - 33.50 5 5,059,380 1981 30,3207000 1988 499 150 175 16 A- KARAOK BLAST FURNACE STOVE 53.40 58.00 - 3,057,217 1981 19972,000 1988 553 47 102 1 A- 6 MORGUL MI11E.DEV.CO%S.HW 100.00 47.66 - 4,5 67,640 1981 48,833,000 1988 969 77 128 66 A- 7 SAMSUN COPPER SHELTER 152.88 56.00 122.65 - 1,641,437 1982 62,594000 1989 3,713 54 99 83 6 TECHNICAL AID - -- - - - - (1) This figures have been taken from the latest review report. C)These figures have been written according to SEE's own statements. Sources :DYB Project Appraisal and Review Reports, SEE. t- 0 590 178 1371 48 192 41