Constitutional Court annuls regulation on 49-year port operation leases

The Constitutional Court, regarding the privatized Turkish Maritime Enterprises (TDİ) and State Railways of the Republic of Türkiye (TCDD) assets, has decided to annul the legislative provision that allowed for the extension of contract periods to 49 years for certain ports where the original contract duration was less than 49 years.

DECISION PUBLISHED IN THE OFFICIAL GAZETTE

According to the Constitutional Court's reasoned decision dated January 18, which was published in today's issue of the Official Gazette, the court, which evaluated the objection filed by 132 deputies including CHP members Engin Altay, Özgür Özel, and Engin Özkoç, decided to annul the relevant article added to the Privatization Law via the omnibus bill numbered 7429, dated December 22, 2022. The annulled provision allowed for the extension of contract periods—which were originally less than 49 years following the privatization of said ports through the transfer of operating rights—up to 49 years, provided that necessary conditions were met, starting from the inception of the right and on a one-time basis.

The annulled provision allowed for the extension of contract periods—which were originally less than 49 years following the privatization of said ports through the transfer of operating rights—up to 49 years, provided that necessary conditions were met, starting from the inception of the right and on a one-time basis.

EMPHASIS ON FREEDOM OF CONTRACT

In its reasoning, the high court recalled that it had previously decided to annul a similar regulation in the first paragraph of the provisional Article 30 of the Privatization Law with a decision published in 2022. It emphasized that by granting the current parties to privatization contracts the opportunity to sign additional contracts, individuals who are not parties to the existing privatization contracts are deprived of the opportunity to enter into contracts at the end of the current terms, thereby restricting the freedom of contract.

The court noted that this situation leads to a disproportionate restriction, thereby imposing an excessive limitation on the aforementioned freedom, and stated that it concluded the paragraph was contrary to the relevant articles of the Constitution, as it could lead to the ports remaining below their true privatization value.