Turkish gov’t to pay $4.7B to private sector for build-operate-transfer projects

The Turkish government in 2024 will pay the private sector 162.4 billion Turkish liras for bridges, highways and hospitals built under the build-operate-transfer model. An amount of 4.9 billion liras is allocated for the Eurasia Tunnel, 73.8 billion liras for bridges and highways, and 83.6 billion liras for city hospitals.

Friday October 20 2023 12:32 pm

Duvar English

The Turkish government in 2024 will pay a total of 162.4 billion Turkish liras for Public Private Partnership (KOİ) projects, according to reporting of the daily BirGün.

Bridges, highways and the Eurasia Tunnel built within the build-operate-transfer (YİD) model and city hospitals built with the build-lease-transfer model will be paid 4.7 billion dollars according to the average dollar exchange rate based on the Medium Term Programme (OVP) in the 2024 budget proposal.

Between 2017 and 2023, a total of 221 billion liras, approximately 16.84 billion dollars, was spent from the budget for YİD projects.

According to YİD model of the government, private sectors undertake the construction of public infrastructure projects and operate in for a certain period. Under this model, the Turkish Treasury guarantees to make up any shortfalls in income for the companies involved in the construction of the bridges.

As per the proposal, 4.9 billion liras will be allocated for the Eurasia Tunnel in 2024, equivalent to $133 million based on the average exchange rate calculation. By the end of 2023, 2.75 billion liras will have already been disbursed for the tunnel, with a total of $5.1 billion payments being made during the 2018-2023 period.

A significant portion of these payments was necessitated by the government falling short of the guaranteed number of vehicle passages provided to private companies.

Former Transport Minister Adil Karaismailoğlu had stated that no payment would be made for the tunnel as of 2026 and that the public would take back all payments made by 2039. However, it is stated in the budget proposal that payments will be made in 2016.

In 2023, payments for bridges and highways with guarantees reached 53.6 billion liras, equivalent to 2.25 billion dollars based on the average dollar exchange rate.

The 2024 budget plan outlines payments of 83.7 billion liras for city hospital rents. From 2017 to 2023, a total of 102.2 billion liras were already paid for these hospitals, often touted as "five-star hotel comfort." The proposal anticipates payments to reach 97.9 billion liras in 2025 and 99.4 billion liras in 2026.

Most of the projects were undertook by the business circles around the ruling Justice and Development Party (AKP).