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Determination of Socially Equitable Guarantees for PPPs: A Toll-Road Case from Turkey

Author

Listed:
  • Ilker Ersegun Kayhan

    (Department of Banking and Finance,Eastern Mediterranean University, Gazimagusa, Mersin 10, Turkey)

  • Glenn P. Jenkins

    (Queen’s University, Canada and Eastern Mediterranean University, North Cyprus)

Abstract

In toll-road projects there is exogenous demand risk. Thus, the government may be required to provide a minimum-traffic guarantee to induce potential private partners to participate. The government must offer the most appropriate level of guarantee while also justifying this controversial fiscal policy tool to society. This study demonstrates the use of financial modeling, risk analysis, and economic evaluation in a toll-road project in Turkey, contributing to the narrowing of a capacity gap in the field. One criterion is proposed to produce a socially equitable guarantee level. This case study exemplifies the policy implications discussed in the conclusions.

Suggested Citation

  • Ilker Ersegun Kayhan & Glenn P. Jenkins, 2016. "Determination of Socially Equitable Guarantees for PPPs: A Toll-Road Case from Turkey," Development Discussion Papers 2016-06, JDI Executive Programs.
    • Handle: RePEc:qed:dpaper:288
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    References listed on IDEAS

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    More about this item

    Keywords

    Toll-road project; financial modelling; economic evaluation; risk analysis; fiscal policy; Turkey;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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