Build-Operate-Transfer Projects in Turkey: Contingent Liabilities and Associated Risks

Ilker Ersegun Kayhan () and Glenn Jenkins ()
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Ilker Ersegun Kayhan: Chevening/Abdullah Gül Research Fellow, Oxford Center for Islamic Studies, University of Oxford

No 2016-01, Development Discussion Papers from JDI Executive Programs

Abstract: The government of Turkey actively promotes public-private partnership models in infrastructure projects. Public-private partnership implementation contracts risk incurring a heavy fiscal burden on the state through contingent liabilities. It is therefore important to distribute risk among contract parties, according to the risk-management capacities of each. In the context of Build-Operate-Transfer projects, governments are expected to cover political and force majeure risks, as well as to guarantee demand for the goods and/or services produced. In Turkey, however, the government also assumes responsibility for finance risk, construction risk, and availability risk, which are usually assumed by the private sector. This study presents an overview of the legal and institutional frameworks relevant to Build-Operate-Transfer projects in Turkey, assessing the explicit contingent liabilities and associated risks to formulate policy recommendations on the evaluation, monitoring, and management of such contingent liabilities and risks in line with international best practice.

Keywords: Public-private partnerships; infrastructure; contingent liabilities; Turkey (search for similar items in EconPapers)
JEL-codes: G13 H54 L33 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2016-01
New Economics Papers: this item is included in nep-ara, nep-cwa and nep-ppm
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Citations: View citations in EconPapers (1)

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