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

Author

Listed:
  • Ilker Ersegun Kayhan

    (Operations Team Leader (Economic & Social Infrastructure) Islamic Development Bank)

  • Glenn P. Jenkins

    (Department of Economics, Queen's University, Kingston, Canada and Eastern Mediterranean University, North Cyprus)

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.

Suggested Citation

  • Ilker Ersegun Kayhan & Glenn P. Jenkins, 2017. "Managing the Budgetary Risks Of Public-Private Partnership Projects in Turkey," Development Discussion Papers 2017-20, JDI Executive Programs.
    • Handle: RePEc:qed:dpaper:4559
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    More about this item

    Keywords

    Public-private partnerships; infrastructure; contingent liabilities; cost-benefit analysis; risk analysis; Turkey;
    All these keywords.

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets

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