The privatization of roads: An overview of the Turkish case

Abstract

There has been a global drastic policy shift from the public provision of major infrastructure services to privatization, and Turkey is no exception to this tendency. Following the slow-down of privatization efforts in the 90s, the last decade has witnessed a jump in Turkish infrastructure privatizations. Despite this recovery, however, Turkish road privatizations still fail to significantly outperform other transport modes unlike global trends and especially lagged behind airport privatizations. In a country like Turkey, which is in need of substantial road investments and expresses its policy priority of enlarging its road network, this relatively lower performance needs elaborate evaluation. The aim of this paper is to fill in this gap by analyzing Turkish road privatizations, discussing implemented privatization schemes and their characteristics, and providing some policy lessons. The findings reveal that the lack of pre-bid studies such as accurate origin–destination matrices and surveys on the willingness to pay behavior prevent the effective risk management of road privatizations. In addition, the analyses also suggest that Turkish public authorities might overuse traffic and revenue guarantees to stimulate greenfield road privatizations through the Build-Operate-Transfer scheme.