Proposal preparation process for highway projects to be tendered by build operate transfer model

Investments made in the field of infrastructure in a country provide comprehensive information about the development level of that country. A large part of these infrastructure works in the world and in Turkey consists of investments made in the highway area. Investments of our country in the field of highways have gained momentum in the last 20 years. The fact that the double-lane roads could not adequately meet the demand for the increasing road traffic volume across the country caused the construction of highway projects to be planned. The fact that highway projects are comprehensive, costly and risky projects has led the public to seek economic models in order not to consume their own resources to realize these projects and to share the risks and economic liabilities that will arise during the construction of the projects with the private sector. The Build-Operate-Transfer model has been preferred as the most appropriate method to be used in the joint undertaking of highway projects by the public and private sectors in our country. The most important stage before the implementation of the highway projects to be made with this model is the process of determining the proposal. In BOT projects, the valuation of the project and the correct determination of the concession period have a vital importance on the profitability of the public and private sectors. In the financial model chosen among the methods found in the literature, the annual construction costs, maintenance-operation expenses, interest rates of the loans, inflation, annual traffic volume and box office fees are taken into consideration. Among these parameters, the ones showing uncertainty were defined by the probability distribution method by using historical data of the parameter. With the help of all the determined parameters, the net present values on the Monte Carlo Simulation were calculated and the concession period calculation was made. In the continuation of the model, bargaining-game theory was used in order to reach the most profitable agreement between the public-private sector. The financial model created within the scope of the study was run on the Northern Marmara (Asian Section) Highway project and the winning bid was evaluated and its profitability was examined under different scenarios.