Public–Private Partnership Practices in the World and Türkiye: A Numerical Analysis
Recep Emre EriçokNowadays, there is a growing consensus on the importance of infrastructure investments in terms of economic and social development. In this context, public-private partnerships are recognized as one of the most important instruments for supporting infrastructure investments. In Türkiye, public-private partnership practices have been utilized extensively in the execution of numerous projects for more than three decades. This study was designed to evaluate and analyze with numerical data the public-private partnership practices in the world and Türkiye within thecontext of global developments in the field of public-private partnership. First, the conceptual framework of publicprivate partnership was examined, and then numerical data on public-private partnership practices in the world andTürkiye were analyzed in light of the increasing infrastructure investment need. The study’s results show that Türkiye’spublic-private partnership practices differ from those of other countries, and that the public-private partnership governance framework, particularly the management and reporting of fiscal risks and fiscal transparency should be improved. Furthermore, the fiscal risks incurred due to contingent liabilities provided within the scope of publicprivate partnership projects have increased. To reduce fiscal risks and improve fiscal transparency in the field of publicprivate partnership, stakeholders must provide contingent liabilities in Turkish Lira rather than foreign currency and avoid long-term guarantees. Moreover, information on guarantees given by institutions that implement public-private partnership projects other than the Treasury should be shared with the public transparently and regularly. Alternatively,all guarantees should be gathered under a single institution and resources should be used effectively and converted into efficient investments and directed to priority sectors. If these objectives are met, it is anticipated that discussions on public-private partnerships in Türkiye will decrease, the potential contributions of these projects will be enhanced, and their positive contribution to Türkiye’s economic performance will increase.
Dünyada ve Türkiye’de Kamu-Özel İşbirliği Uygulamaları: Rakamsal Verilerle Bir Analiz
Recep Emre EriçokGünümüzde ekonomik ve sosyal kalkınma açısından altyapı yatırımlarının önemi konusunda giderek artan bir fikir birliği bulunmaktadır. Bu bağlamda kamu-özel işbirliği, altyapı yatırımlarını desteklemenin temel araçlarından biri olarak kabul edilmektedir. Kamu-özel işbirliği uygulamaları, Türkiye’de de 30 yılı aşkın bir süredir çeşitli projelerin gerçekleştirilmesinde yoğun şekilde kullanılmaktadır. Kamu-özel işbirliği alanındaki küresel gelişmeler çerçevesinde dünyada ve Türkiye’de kamu-özel işbirliği uygulamalarını incelemek ve rakamsal verilerle analiz etmek amacıyla hazırlanan bu çalışmada, öncelikle kamu-özel işbirliğinin kavramsal çerçevesine değinilmiş, daha sonra artan altyapı yatırım ihtiyacı doğrultusunda dünyada ve
Türkiye’deki kamu-özel işbirliği uygulamalarına ilişkin rakamsal veriler analiz edilmiştir. Çalışmadan elde edilen sonuçlar, Türkiye’de kamu-özel işbirliği uygulamalarının diğer ülke örneklerine göre bazı hususlarda farklılaştığını ve mali risklerin yönetimi ve raporlanması ile mali şeffaflık başta olmak üzere kamu-özel işbirliği yönetişim çerçevesinin iyileştirilmesi gerektiğini ortaya koymaktadır. Ayrıca, kamu-özel işbirliği projeleri kapsamında sağlanan koşullu yükümlülükler nedeniyle üstlenilen mali risklerin arttığına işaret etmektedir. Kamu-özel işbirliği alanında mali risklerin azaltılması ve mali şeffaflık sorunlarının çözümü için, koşullu yükümlülüklerin döviz yerine TL cinsinden verilmesi, uzun süreli garantilerden kaçınılması, Hazine dışındaki kamu-özel işbirliği projelerini uygulayan kurumlar tarafından verilen garantilere ilişkin bilgilerin kamuoyu ile şeffaf ve düzenli bir şekilde paylaşılması veya tüm garantilerin tek bir kurum çatısı altında toplanması, kaynakların etkin şekilde kullanılarak verimli yatırımlara dönüştürülmesi ve öncelikli sektörlere yönlendirilmesi gerekmektedir. Bunların başarılması durumunda, Türkiye’de kamu-özel işbirliğine ilişkin tartışmaların azalması, bu projelerin potansiyel katkılarından daha fazla faydalanılması ve Türkiye’nin ekonomik performansına olumlu katkılarının artması öngörülmektedir.
In addition to the infrastructure needs caused by developments, population growth, rapid urbanization, pandemics, climate change, and digitalization, among others, an increasing number of countries are utilizing public-private partnerships to provide public services more effectively and quickly. By combining the public and private sector’s dynamism in terms of
production speed, quality, technology, and financing, well-designed and implemented public-private partnership projects can yield significant efficiency gains. However, poorly designed and managed public-private partnership projects can result in significant fiscal risks and increased costs due to their complex risk structure and long-term structure. In recent years, public-private partnerships have become more controversial as a result of these features, the necessity of projects, social and economic benefits, and risks and liabilities assumed by the public sector.
Within the scope of these discussions, the conceptual framework of public-private partnership was first examined in this study, which was designed to evaluate and analyze the public-private partnership practices in the world and Türkiye using numerical data. In accordance with the increasing need for infrastructure investment, quantitative data on public-private partnership in developing countries and EU countries were subsequently examined, and public-private partnership practices worldwide were analyzed. Moreover, an attempt has been conducted to determine the differences between Türkiye and other countries. Finally, the data on public-private partnership practices in Türkiye were examined, along with the difficulties encountered during the process and the findings related to these difficulties.
The study’s findings show that Turkish public-private partnership practices differ from those of other countries. Larger megaprojects are attempted to be realized through publicprivate
partnerships, and the average project size is the first among developing countries, whereas the proportion of projects supported by multinational development banks remains extremely low. The other differences include the fact that all direct supports are of the minimum income support nature despite the share of projects with direct and indirect support being the same as the average; Türkiye is a country where income guarantees are used the most among direct supports; the guarantees given are in foreign currency; and these guarantees are concentrated in the health sector as opposed to the transportation sector.
Although a legal framework for public-private partnerships has been established in Türkiye, it is difficult to speak of a clear and well-designed governance framework that encompasses all phases of the process. Nonetheless, the management and reporting of fiscal risks and fiscal transparency issues stand out as the most significant problems in Türkiye’s public-private partnership sector. In reality, there is no publicly accessible information on the fiscal risks of public-private partnerships, neither in Türkiye nor on a global scale. This situation makes it difficult to accurately evaluate and analyze the costs of public-private partnership projects and necessitates the use of estimates and limited data in order to conduct studies. However, these estimates vary considerably from one another. These studies have emphasized that a rise in exchange rates or a potential economic recession can significantly increase the cost of foreign currency guarantees.
According to the calculations made in the studies, between 2021 and 2045, a cumulative total of 152.8 billion dollars in income guarantees were provided, and their proportion to the
2020 GDP was 22%. According to another study based on Turkish Lira (TL) calculations, public-private partnership guarantee payments in the 2022 budget represent 2% of the central government budget and 0.4% of the GDP. Considering the recent depreciation of the TL, the World Bank estimates that the burden of public-private partnership on the budget will double between 2019 and 2022 (from 1.2% to 2.4%) due to payments made for predetermined guarantees, exchange differences provided to project contractors, and rent payments.
To take advantage of the potential benefits of public-private partnership, Türkiye must first address the problems within its governance framework and take the necessary steps to address one of its weakest areas, namely, the management and reporting of fiscal risks, and solve fiscal transparency issues. Therefore, contingent liabilities should be given in TL rather than foreign currency, long-term guarantees should be avoided, and information on guarantees given by institutions that implement public-private partnership projects other than the Treasury should be shared with the public transparently and regularly. Moreover, all guarantees should be consolidated under a single institution, and resources should be used
effectively, converted into efficient investments, and directed to priority sectors. If these objectives are met, the discussions on public-private partnerships in Türkiye will decrease, the potential contributions of these projects will be enhanced, and their positive contribution to Türkiye’s economic performance will increase.
