Akademik Veri Yönetim Sistemi
38. International Public Finance Conference/Turkey, Antalya, Türkiye, 17 - 20 Ekim 2024, sa.2456, ss.230-235, (Tam Metin Bildiri)
EXAMINATION OF
PUBLIC PRIVATE COOPERATION PROJECTS WITHIN THE SCOPE OF SAVINGS MEASURES TAKEN
IN TURKEY
Aykut SÖNMEZ[1] Çağrı KARAKOÇ [2]
Keywords : Public Private Partnership (PPP), Public Private
Partnership in Turkey, Public Guarantees, Budget.
JEL Classifications : H11, H81.
Importance of the
study : The contingent liabilities and demand guarantees of
Public Private Partnership projects, which burden the budget and are not
transparently disclosed, are examined within the scope of the austerity
measures currently in practice and the consequences of including these projects
within the scope of austerity are discussed. In particular, the fact that mega
projects in Turkey are carried out within the scope of Public Private Partnership
projects makes it necessary to address the issue in terms of its legal and
economic effects. The study analyses the projects that Turkey has implemented
since the 1980s, the guarantees given as far as they are publicly disclosed and
the actual demands, focuses on the negative effects of these projects on the
budget and proposes solutions.
Purpose of the
study : Minimising the
financial risks of the projects implemented with PPP models and solving the
financial transparency problems is an important issue in terms of alleviating
the burden on the budget. When the issue is analysed in Turkey, especially the
conversion of contingent liabilities into TL rather than foreign currency,
avoiding long-term guarantees, and providing demand guarantees to projects
after feasibility studies are carried out in accordance with the reality will
reduce the financial risks of the treasury and may contribute to the reduction
of the burden on the budget. In this study, Turkey's situation will be analysed
and recommendations will be presented.
Literature : PPP projects are important in terms of realising infrastructure projects
and utilising the capabilities of the private sector. However, there are
different studies in the literature on the complexity of these models in
practice and the importance and presentation of public infrastructure assets.
For example, in Diéguez and Alfanso's (2012:605) study, the problem of budget
constraint faced by public authorities is emphasised and it is discussed that
the public sector can realise service delivery by cooperating with the private
sector in order to solve this problem by taking advantage of the financing
power, project execution professionalism and relative efficiency of this sector
compared to the public sector. Again, there are studies by the
World Bank, IMF and many authors on PPP projects related to this issue, and
many aspects have been the subject of research. In the studies conducted by
Parlak et al. (2020: 9-39), it was determined that the projects were selected
in violation of the legislation according to the faulty feasibility reports
prepared by the companies. It has been observed that project contracts related
to the energy sector have been constantly changed and investment amounts, sales
tariffs and production prices have been changed with the changes. Civanoğlu
(2022: 357-392) stated in his study that 75% of PPPs are foreign-originated and
75% of them are given treasury guarantees and foreign currency-indexed profit
guarantees during the operation period, and that this situation has turned into
an economic security threat.
Design and Method : The Public-Private Partnership
model applied in Turkey will be examined whether it contributes to the
effective and efficient use of public resources without an extra burden on the
state budget in order to achieve the targeted goal. In this context, completed and ongoing
projects will be analysed. While analysing, project sizes, costs, PPP model,
guarantees given, etc. will be classified in the light of indicators and their
results will be examined. In addition, what kind of results were encountered
when the guarantees given were reached, and what kind of liabilities arose when
they were not reached, these issues will be revealed. In addition, the method
of implementation of PPPs in European countries and PPPs implemented in Turkey
will be compared and recommendations will be presented. The impact on the
budget in the budget composition will be analysed in the light of budget data.
When the determined factors are analysed, an evaluation can be made on whether
they should be included in the austerity measures in the current practice.
Thus, answers to the following questions will be sought for the research?
·
Are PPPs being implemented
effectively without harming the composition of the state budget?
·
Should PPPs be included in the
current austerity measures?
·
Should PPPs be evaluated within
the scope of austerity measures in line with the transparency principle of the
budget?
·
How should the guarantees given
within the scope of PPPs be included in austerity measures?
·
How do the theoretical benefits
of PPPs lead to what kind of results in practice?
By making evaluations on the research questions
determined, a suggestion can be made on whether PPPs should be included in the
current austerity measures.
Findings
and Discussion : The PPP projects
that have started to be implemented in Turkey, especially with the inclusion of
mega projects, have become one of the most frequently discussed topics by both
social scientists and ordinary citizens. The benefits of this co-operation mentioned
in theory are not fully realised in practice. When the issue is analysed from
the perspective of Turkey, it is observed that projects are implemented in
Turkey without any legislation or infrastructural work for these projects,
using the learn-by-doing model. The details of the projects are not shared with
the public in a transparent manner. The information provided remains at a
minimum level, and there are great uncertainties as to what these projects will
bring or take away for the country's economy in the future. Due to the fact
that the guarantees given to the private sector are not based on a feasibility
study, when the number of guarantees given in the realised projects cannot be
reached, an extra burden is placed on the treasury.
Conclusion and
Recommendations :
·
The legal basis of the projects to be realised should be
firmly established, project preparations should be carried out in detail,
analyses and financial statements of the projects should be well prepared.
·
Cost-benefit analyses should be carried out correctly
before the projects are put into practice.
·
An institution where these projects are monitored and
where experts in their fields are present should be established and this
institution should ensure that information is shared with the public and
relevant institutions in a transparent manner.
·
In addition, while these projects are still in the
project phase, Environmental Impact Assessment should be carried out and projects
should be implemented with the least damage to nature.
·
The guarantees given to the projects and the contract
terms accepted during the tender process should not be revised later in favour
of the private sector.