Risk Management in Transport PPP Projects

In the Islamic Countries

230

model the

benefit to accelerate the completion of the construction works and improve the

quality, effectiveness and efficiency of public services and their infrastructure

. By

attracting foreign investments, PPPs also reduce the financial burden of infrastructure

investments on the state budget and facilitate the transfer of know-how and technology

(Presidency of Strategy and Budget of the Republic of Turkey Investment Office, 2019).

Through PPP solutions, under the scope of the Ninth and Tenth Development Plans Turkey has

developed and implemented

several mega-projects

in the transport sector, including the

Istanbul Airport, the Eurasian Tunnel, the Yavuz Sultan SelimBridge, the Osmangazi Bridge. The

Eleventh Development Plan of Turkey (2019) confirms the strategic relevance of PPPs in general

and for the transport sector. Several additional priority projects are foreseen to be implemented

as PPPs in the period 2019-2023, which include: the Kanal Istanbul, the 3-storey Greater

Istanbul Tunnel, the Filyos and Candarli Ports Superstructure and Operation. In the same period,

the completion of the following PPP transport projects is foreseen according to the plan: Gebze-

Orhangazi-İzmir Motorway,(completed on 4

August 2019), Kurtköy-Akyazı and Kınalı-Odayeri

sections of the North Marmara Motorway, Malkara Çanakkale section of the Kınalı-Tekirdağ-

Çanakkale-Balıkesir Highway, Menemen-Aliağa -Candarlı Motorway, Ankara-Niğde Motorway,

Aydın-Denizli Motorway, Second phase of the Istanbul Airport, Salıpazarı Cruise Port, Haliç

Marina.

Legal provisions

The

Build-Operate-Transfer

(BOT) and Transfer of Operating Rights

Lease-Operate-

Transfer

(LOT) contractual schemes are the most frequently used for PPP projects in the

transport sector in Turkey. The BOT scheme is applied to all transport modes for the

implementation of infrastructure works. The TOR model is in use in the airport sector for the

operation of the existing airports and/or terminals. Expansion of the existing airport and

terminal infrastructure may also fall under the scope of TOR concessions.

Legal provisions have been adopted in the Turkish legislation over the past decades to allow the

private sector participating in the financing, construction, operation and management of the

public transport infrastructure and services. These include a specific set of rules for the use of

BOT and TOR contractual schemes in the transport sector:



Build-Operate-Transfer

Law No. 3996, regarding the realization of certain infrastructure and public services

with the BOT model (BOT Law), whereas BOT is defined as a special financing model

to be used in projects requiring high technology or high financial resources in which

the investment costs including the profit to be earned are recovered with the proceeds

of the sale of goods or services obtained from the administration or the beneficiaries

of these services during the operation period. This Law represents the most relevant

piece of legislation for the building operation and transfer of bridges, tunnels,

highways, railways, underground and ground auto parks, sea and airports for civil use,

The first BOT law in Turkey was actually Law No. 3096, introduced in 1984 to regulate PPPP projects in the

electricity/power sector. The first legislative provision regulating BOT projects in the transport sector was

Law No. 3696.