Managing the Budgetary Risks Of Public-Private Partnership Projects in Turkey

Ilker Ersegun Kayhan () and Glenn Jenkins ()
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Ilker Ersegun Kayhan: Operations Team Leader (Economic & Social Infrastructure) Islamic Development Bank

No 2017-20, Development Discussion Papers from JDI Executive Programs

Abstract: Turkey actively promotes public-private partnership models in infrastructure projects. The risks embedded in public-private partnership agreements can inflict a heavy fiscal burden on the government through contingent liabilities. It is therefore important to distribute these risks among the contract parties, according to the risk-management capacities of each. In the context of Build-Operate-Transfer projects, government is expected to cover political risks, as well as to guarantee demand for the goods and/or services produced. In Turkey, however, the government also takes responsibility for financial 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 their evaluation, monitoring, and management in keeping with international best practice.

Keywords: Public-private partnerships; infrastructure; contingent liabilities; cost-benefit analysis; risk analysis; Turkey (search for similar items in EconPapers)
JEL-codes: A14 H41 H42 H44 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:qed:dpaper:4559

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