Proceedings of 7th Annual American Business Research Conference
23 - 24 July 2015, Sheraton LaGuardia East Hotel, New York, USA, ISBN: 978-1-922069-79-5
PPP For Financing Infrastructural Investments: PPP in
Turkey’s Health Sector
Yaşar Bülbül
Public-private partnership (PPP) has been a popular financing method for
infrastructural investments. This model is generally used in financing projects
requiring huge amount of capital, mostly in energy, health, education, and
transportation etc… investments.
PPP has a variety of applications including BOT (Build-Operate-Transfer), DB
(Design- Build), BTO (Build-Transfer-Operate), BOOT (Build-Own-Operate-Transfer),
BOO (Build-Own-Operate), DBFO(Design-Build-Finance-Operate), BLTM (BuildLease-Transfer-Maintain), LROT (Lease-Renovate- Operate-Transfer).
Turkey is one of the pioneering countries in PPP. 3096 numbered law dated 1984
together with the enactment of 4046 numbered privatization law and 3996 numbered
Build-Operate-Transfer law allowed private sector to invest in different infrastructure
projects in energy, transportation, and water supply.
In 2005, Turkish Ministry of Health has allowed private sector to build and operate
new hospitals under Build-Lease-Transfer model. A PPP department is established
within the Ministry of Health to manage PPP projects, to utilize from private sector’s
financing capabilities, to minimize building period which takes 8 to 10 years due to
budget insufficiencies, to share risks, and to utilize from the experience of private
sector.
In this model, investors will build the hospital with all equipments on public land within
3 years, and then will hire this facility to the ministry of health for 25 years. 30
hospitals with a total capacity of 40.000 beds will be built with this model. The ministry
has delegated 18 such projects with a total investment of 10 billion USD.
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Dr. Yaşar Bülbül, Professor of Economics, Istanbul University, Faculty of Economics,
E-mail: ybulbul@istanbul.edu.tr