Determination of Socially Equitable Guarantees for PPPs: A Toll-Road Case from Turkey

Ilker Ersegun Kayhan () and Glenn Jenkins ()
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Ilker Ersegun Kayhan: Department of Banking and Finance,Eastern Mediterranean University, Gazimagusa, Mersin 10, Turkey

No 2016-06, Development Discussion Papers from JDI Executive Programs

Abstract: In toll-road projects there is exogenous demand risk. Thus, the government may be required to provide a minimum-traffic guarantee to induce potential private partners to participate. The government must offer the most appropriate level of guarantee while also justifying this controversial fiscal policy tool to society. This study demonstrates the use of financial modeling, risk analysis, and economic evaluation in a toll-road project in Turkey, contributing to the narrowing of a capacity gap in the field. One criterion is proposed to produce a socially equitable guarantee level. This case study exemplifies the policy implications discussed in the conclusions.

Keywords: Toll-road project; financial modelling; economic evaluation; risk analysis; fiscal policy; Turkey (search for similar items in EconPapers)
JEL-codes: D61 H54 L91 O52 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2016-06
New Economics Papers: this item is included in nep-ara, nep-cwa, nep-ppm and nep-tre
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Persistent link: https://EconPapers.repec.org/RePEc:qed:dpaper:288

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