Turkey is spending billions of dollars for guaranteed payments in PPP projects

İstanbul Airport in the construction phase. (Photo: AA/file)

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Turkey will pay 140 billion lira (~20.4 billion USD) for public-private partnership projects (PPP) in 25 years, according to a report by daily Sözcü.

"We will all pay this," Erdoğan Toprak, the chief advisor of main opposition Republican People's Party (CHP) Chair Kemal Kılıçdaroğlu, told the newspaper.

"Twenty-five years of the country has been hypothecated with public-private partnership and build-operate-transfer projects," he said.

Recently, it has been revealed that the Ministry of Health agreed to guarantee two hours of daily flight for two ambulance planes it leased from Qatar.

Here is the situation about the main PPP projects in Turkey:

Osmangazi bridge

Photo: Wikimedia Commons

Linking Kocaeli's Gebze to Yalova over the Sea of Marmara, the bridge opened on July 1, 2016. The cost of the bridge was 1.2 billion dollars and the total cost, including highways, was 6.5 billion dollars.

It was guaranteed that 40,000 vehicles would pass from the bridge daily. The toll for a car was 31 dollars and would increase every year as much as the inflation rate in the US.

The guaranteed payment for the bridge for 15 years and seven months will be 7.8 billion dollars. In the last year, 8 million 486 thousand vehicles passed through the bridge, which was 5 million 754 thousand lower than what the government guaranteed.

It cost 2.035 billion dollars to the Treasury.

Eurasia tunnel

Linking İstanbul's European and Asian sides under the Sea of Marmara, the tunnel opened in December 2016.

The government guaranteed 70,000 daily vehicle passes and 4 dollars per vehicle. The firm that built the bridge will receive 2.6 billion dollars in 25 years of operating time. The construction cost of the bridge was 1.4 billion dollars.

While the government guaranteed 25 million 125 thousand vehicle passes per year, 17 million 514 thousand vehicles passed the tunnel in 2019. The cost to the Treasury was 244 million dollars.

The third Bosphorus bridge

Photo: Wikimedia Commons

Officially named as the Yavuz Sultan Selim Bridge, the third bridge on İstanbul's Bosphorus opened in August 2016.

For the bridge that cost 2.5 billion dollars and for the 115-kilometer long highway, it was guaranteed that 135,000 vehicles would pass daily. The guaranteed payment was 3 dollars per vehicle for the bridge and 0.08 dollars per kilometer for the highway.

For seven years, eight months and 20 days, the amount of guaranteed payment is 1.2 billion dollars for the bridge and 8.1 billion dollars for the highway.

Ankara railway station

Photo: Wikimedia Commons

106 million passengers are guaranteed for the station until 2037. One-and-a-half dollars will be paid for each of the 106 million passengers and 0.5 dollars will be paid for passengers over that. The payment for 106 million passengers will be 159 million dollars. For both arriving passengers and passengers above the guarantee, the government has paid 14 million 996 thousand dollars in 3 years.

İstanbul Airport

Constructed with a build-operate-transfer model, the contract amount for the airport is 22.15 billion Euro plus value-added tax (VAT) for 25 years. The government gave a 61-percent guarantee and provided VAT and customs exclusions. The state pays 20 Euro for every international passenger and 5 Euro for every domestic passenger.

Başakşehir City Hospital

The "city hospitals" are large health complexes built with the PPP model. For 10 city hospitals, the government agreed to pay 31.45 billion lira (1 dollar=6.85 lira) in three years. It allocated 5.679 billion lira for city hospitals for 2020.

For city hospitals built and to be built between 2017 and 2022, 30 billion 530 million lira will be paid for rent and service.

Zafer Airport

The firm that built the airport was guaranteed that 1.6 million passengers would use the airport in a year. The total populations of Kütahya, where the airport is built, Afyon and Uşak province are slightly over that. Only 5 percent of the guaranteed number of passengers use the airport. (TP/VK)