Assessment of public private partnership (PPP) schemes in Turkish railway industry

Turkey's infrastructure gap have been building up. Government policy for transportation have been shifted to increase rail usage both on urban and national scale thus creating shortage of funds and expertise. In search of finding solution to lack of resources, Public Private Partnerships may be the answer. Turkey have been using it since 1994 with total of $168.5B investments and now detailed legislations have been introduced for rail PPP projects. As all changes, introduction of new laws requires to rail sector to be ready for it. This thesis aims to understand what, why and how questions of PPP. Further the main motive is to reply how question in relation to Turkey. In order to comprehend, reasons for using PPP applications have been investigated. General framework and differences to traditional procurements have been investigated. Main reasons for PPP applications is found to be investments costs, risks and expertise. Furthermore critical success factors (CSFs) have been investigated. "Well organized project" lies on top of the list. Global examples of rail PPP projects are also investigated. It is understood that rail projects may have many success factors common with other infrastructure PPP projects e.g strong private consortium and legal framework. However, it is also noted that many different CSFs were present on studies based on project specific conditions such as effective communication and poor workmanship. Understanding what is needed for successful projects, Turkey's experience with PPPs, share of transportation sector and current situation of railway have been considered. Turkish experience of PPPs shown that while transportation nearly accounts for 35% percent of investments, it was mainly governed by BOT projects. Law 3996 since its introduction in 1994 have been extensively used ergo is inspected to understand. For railways, although there is not any PPP project investments made for rail spiked in the last 7-8 years To bring all of this together, additional laws 655 and 6461 are analyzed. Outcomes show that many issues as availability of access, guarantees, tendering process, expropriation, safety, contracts and alternative financing show that differences with existing regulations and lack of availability of these issues within regulations or framework are aligned with previously inspected failure reasons/factors from global rail PPP applications. Overall, it is found that current framework for PPP have shown great development but it possess challenges to overcome.