The economics of PPP regulation in Turkey: incentives for private investment and fiscal risks control

Introduction. The study presents the formation and evolution of the institutional and legal framework for public-private partnership (PPP) in Turkey from the early concession practices during the republican period to a multi-level system of generally accepted BOT, BOO, BLT and ToR models, used in the infrastructure projects implementation in a wide range of industries. The article also discusses the main directions of the support system for the development of the PPP in the Republic of Turkey. The existing elements of promoting PPP projects make it possible to reduce transaction costs and manage project uncertainty.

Materials and methods. The authors of the article analyzed specific laws and by-laws, which made it possible to determine the sequence of eliminating the legal uncertainty of the 1990s and the transition to the conclusion of contracts based on private law with arbitration clauses and risk allocation in accordance with international standards. Methods of synthesis, generalization and description, based on the study of regulatory features and the existing management system of the PPP sector in the Republic of Turkey, were used as the methodological basis of the study.

Results of the study. During the research process, the authors managed to identify the priority infrastructure sectors that formed the basis of the PPP project portfolio, individual measures and areas of support for projects, as well as institutional elements of the PPP management system, including the role of the Presidential Investment Office and the Strategic Budget Department. The study allows to conclude that the lack of unified PPP-law is compensated by a stable set of laws and procedures that ensure the reproducibility of transactions and their fiscal controllability. And the maturity of the PPP mechanisms itself in Turkey is also reflected in its adaptability to the challenges of the 2010-2020s while maintaining competition for private capital.

Discussion and conclusion. To date, a multilevel organizational system has been formed in the Republic of Turkey to ensure the development of the Public-Private Partnership. The country has a largely comprehensive toolkit for implementing projects under various PPP models. Each individual PPP project in the process of its structuring may fall under the influence of one or several laws at once, depending on the its PPP contract model. At the same time, the general principles of implementation are more often provided by by-laws. And the accumulated experience and the formed system of support from the government of the Republic of Turkey compensates for the actual absence of unified PPP-law.

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