The Law Amending some Provisions of the Labor Code and other Decree Laws (''the New Law'') published in the Official Gazette dated September 11, 2014, and numbered 29116 has gone into effect on the day of its publication in the Official Gazette. As per Article 88 of the New Law, Additional Article 6 has been added to the Law on Organization and Duties of General Directorate of State Hydraulic Works numbered 6200. The purpose of this Additional Article 6 is to determine which water constructions will be subject to mandatory audit and examination obligation, and also to set forth the general terms of such audit and examination works. Pursuant to the Additional Article 6, the following water constructions will be subject to mandatory audit and examination by the General Directorate of State Hydraulic Works (''DSI'') or audit companies designated by the DSI:
- Dam, regulator, head pond, tunnel, canal, water distribution pipeline and other relevant water constructions of Hydroelectric Power Plants ("HPP") that are constructed for electricity generation purposes in accordance with the Electricity Market Law numbered 6446 and water utilization agreements; and
- Construction of barrage, pond, regulator and other relevant water constructions by the real persons and legal entities.
As per the New Law, ongoing water constructions are also subject to the same mandatory audit and examination process. The investors of such projects shall notify DSI for a mandatory audit and examination within 60 (sixty) days starting from 11 September 2014.
The legal consequences of non-compliance with the mandatory audit and examination process are also regulated under Additional Article 6 of the Law on Organization and Duties of General Directorate of State Hydraulic Works numbered 6200. Accordingly, legal entities holding a generation license in accordance with the Electricity Market Law numbered 6446 that are not audited by DSI will be subject to an administrative fine in an amount of TRY 5,000 (five thousand Turkish Liras) per Mw of the HPP depending on its capacity. Moreover, the water utilization agreement of the investor may also be terminated by DSI in case the investor refrains from applying to DSI for the audit following the written notification served by DSI.
If the water constructions are not in compliance with the relevant regulations and their approved projects, then DSI will grant to the investors 30 (thirty) days to remedy such deficiencies. DSI may also suspend a part of the construction or the construction in its entirety in case these deficiencies are not remedied by the investor within 30 (thirty) days following the DSI's notification.
The administrative fines applied in accordance with the New Law shall be paid within 30 (thirty) days as of their notification date to the relevant investor. The administrative fines applied for non-compliance with the mandatory audit and examination requirement will be subject to appeal to the administrative courts within 1 (one) month starting from their notification to the relevant investors.