Public private partnership application in Turkey: Value for money analysis in the case of city hospitals

The concept of Public Private Partnership – PPP has been one of the popular phenomena of the last three decades. The states have put this method into service for their citizens by taking various forms according to their financial and political structures in the transport, energy, telecommunications and finally health sectors. It is evident that the supporters of the ruling political party or president will be happy to make an investment that will be carried out in a few years with the PPP method but which will last for years with traditional public procurement means. The contracts of these projects, from 25 to 49 years life span, which will lend the citizens of the country, even their unborn children, is closed to audit of Court of Auditors and public scrutiny as the contracts are covered by trade secrets. This situation increases the importance of this study. Turkey began Health Transformation Program with the support of the World Bank after 2002. The aim of this program is to transform the healthcare infrastructure established through the City Hospital Campuses, which will be interpreted as the second phase, in a revolutionary manner. It will be easier to analyze the implementation of PPP in a logistically complex area such as the health sector will yield successful results through meaningful statistics in the coming years while there are project experiences previously made in the energy and transport sectors whose all contractual rights have passed to the public authority. Value for Money – VfM analysis is a virtual measurement method for analyzing PPP projects financially on a Net Present Value – NPV account. Authorities fully familiar with contractual terms covered by trade secrets are expected to provide a more consistent VfM analysis. This study is expected to be a pioneer for such kind of analysis. It is a hard decision for public authority to take the responsibility of borrowing with foreign currency and gaining TL income and making indexed payments again in foreign currency in the current world where negative interest rates are discussed and TR 10-year interests are 10-15 percent. In this study, as a result of the VfM analysis made by estimating close to the official estimates, positive VfM has been obtained and the idea that the health sector could be invested with PPP method even in today's conditions is reached.