Risk Management in Transport PPP Projects
In the Islamic Countries
231
and other similar investments and services. Law 3996 has set the basis for PPP
development in Turkey over the recent past decades. Most of the PPP transport
projects in Turkey are subject to this Law;
o Decree NO. 1807, General BOT Law Implementation Decree, representing the by-law
of Law No. 3996;
o Law No. 3465, on building, maintenance and operation of the Highways. This Law
authorizes entities other than the General Directorate of Highways to construct,
manage and operation of Access Controlled Highways (BOT Highways Law).
 Transfer of Operation Rights (and Long-Term Lease):
o Law No. 5335, amending other laws including provisions related to the lease and/or
transfer of operating rights of Airports and privatization (including transfer of
operation rights) of assets owned by Turkish Railroads (including ports). This law also
extends the use of the transfer of operation rights model to the Highways Law;
o Law No. 4046 (Privatization Law), introducing relevant provisions for the
privatization of public services, also defining Transfer of Operating Rights as the
transfer of operating rights of an entity as a whole or the production units of the goods
and services of its assets without transferring the ownership rights of the assets of
such entity, in return for a consideration and under certain conditions and time limits;
Further to the above main legislation, Law No. 4749 (Public Finance Law) is also worth
mentioning, which set the terms and conditions for the applicability of treasury debt
assumption. In case of early termination of the implementation agreement in a BOT project, the
Treasury may take over the project company's outstanding financial obligations, either partially
or in full, including derivative instruments. Debt assumption may cover 85% of the financing in
case of termination due to the project company's fault and 100% of the financing in case of
termination for any other reason, together with 100% of the financing costs in each case;
The legal system that is currently in place in the Republic of Turkey for the implementation of
PPP contracts in the transport sector has clearly allowed for the participation of the private
sector in the financing and implementation of transport infrastructure. In line with the reports
by the European PPP Expertise Centre (2019) and by the World Bank (2018), Turkey is indeed
ranking among the first countries in the PPP European and Global Markets. Nonetheless, the
legislation in place has been criticized as being too fragmented (EBRD, 2011; WB, 2014; Emek,
2015; IMF, 2018). According to the Turkish Authorities consulted as part of the development of
this study, a draft PPP Framework Law has been already elaborated, which is currently
under discussion. One of the targets of the Tenth Development Plan of Turkey (2013) as well
as of the recently published Eleventh Development Plan of Turkey (2019) is that of addressing
this issue by developing a holistic framework for the planning, regulation and monitoring of
the PPPs to ensure they are managed in line with macroeconomic policies.