Abstract:

Build–operate–transfer contracts or public–private partnerships have recently emerged as common investment tools to fund infrastructure projects, such as airports, motorways, and bridges, and the health industry. Government user/ passenger guarantees, however, have been subject to fierce public dispute. In the case of some projects, inaccurate demand projections have heavily burdened taxpayers. A sharp decline in the number of passengers and vehicles due to COVID-19 control measures for travel and quarantine requirements have increased the burden on the public. For example while the passenger guarantee given for Zafer Airport for 2021 was 1,317,733, the number of passengers in the first 6 months of 2021 has been only 1164. To increase the number of users, some of the investment prices are kept low. Further, if the number of passengers is below the guaranteed rate, the difference is paid to private actors as a contribution share. Build–operate–transfer contracts were initially designed as public service concessions. The amendment to the Article 47 of the Constitution has provided that such investments and services can be performed by or delegated to persons or corporate bodies through private law contracts. In public service concessions, damages and risks along with profits are transferred from the public sector to the private sector, whereas in private law contracts, no such transfer is possible because of the government passenger guarantees. In Turkish law, epidemics are accepted as a force majeure condition; the COVID-19 pandemic must be considered as one such event. Partners should equally share the increased liabilities of the public sector to restore the financial balance of the contracts. In such cases, extending the contract may even prove more profitable for investors.

Keywords: