Turkey: Motorway Privatizations In Turkey And Its Strategic Importance

Last Updated: 22 November 2013
Article by Engin Düzgün

As a consequence of its geologic location, Turkey can be named as a bridge that links Asia, Middle East and Caucasus to Europe. That is why the significance of highways is rising in Turkey because of the intercontinental transportation and commerce.

With its young population and fast growing economy, Turkey's development continues in every area. The growing number of vehicles pushed the necessity for safer and high standard transportation needs for both the use of existing highways and the building for new ones.

Turkey became a member state of ESCAP in 18 July 1996. ESCAP was founded by United Nations Economic and Social Council under the name of Asia and Far East Council and its secretariat is in Bangkok. Its work area includes a geography stretching from Iran to Cook Islands.

In 2001, by United Nations ESCAP Secretariat, A-Road connection was added to Black Sea Coast Road destination and Ankara – İstanbul Highway connecting to Asian Road Network. Since, our A-Roads reached to 5247 kilometers.

The development of an international and environment-friendly Asian Highway Network is aimed to provide to ensure warm relationship, between the members of Asia-Pacific Economic and Social Commission, and to enhance international trade and education between these countries.

Prepared by the bodies of United Nations and Asia and Pacific Economic and Social Commission, The Intergovernmental Agreement on Asian Highway Network was signed in 14 September 2009 by the cabinet and promulgated in 7 October 2009.

Since then, Turkey has become the most important part of the chain of highway which is stretching from Europe to Cook Islands in Pacific.

Turkey is going to make these roads, which have strategic and economic value, available for the private entrepreneurs by privatization.

Especially in Europe, the share of private sector is rising in the building, finance and management of the highways regarding the last ten years.

38% of the European roads are managed by franchises, and 75% of the roads attained are managed by private sector. The developments and private sector share in Mediterranean countries like Spain, Italy, France and Portugal are remarkable.

Privatizations hold an important place in the countries whose rate of private sector is high. 60% in Italy, 80% in France and Spain and Portugal 90% is managed by private sectors. There have been highways Belgium, Germany, Denmark, Sweden, Austria, Hungary and Norway, too.

In Europe, the franchise rights for 30-40 years as well as roads' maintenance and other services are granted to private sector. With this method, the building, management and supply of other services of highways and bridges are conducted by the companies who hold franchises. With this method, franchise rights are granted for a season.

Ownership of the bridges and highways belongs to state and transfer of title is not possible.

In the frame of transportation policies, to meet demands of rising freight and passengers use, the building of the new highways, reformation of the present ones and rise of service standards are targeted in Turkey. This is why; there is a need for highway management and enabling private sector to build highways. The progress is expected in the manners of reliability, service quality, infrastructure/superfrastructure after the completion of the privatization process.

With these highway privatizations, Turkey expects:

  • Cost savings and increasing in productivities
  • Creating new funds for the building of new roads
  • To provide higher standard of service quality
  • Expertise in some areas (technical, financial, etc)
  • Decrease of accidents
  • Fuel and time saves
  • Decrease in pollution (decreases in carbon emission)

By means of these targets, as a part of privatization of the highways, with the decision High Board of Privatization number 2003/4 in 24.02.2003:

Edirne-İstanbul-Ankara

Pozantı – Tarsus – Mersin

Tarsus – Adana – Gaziantep

Toprakkale – İskenderun highways and Boğaziçi and Fatih Bridges

Gaziantep – Şanlıurfa

İzmir – Çeşme

İzmir – Aydın highways

Ringroads of Ankara, İzmir and Fatih Sultan Mehmet Bridge in privatization project

the highways mentioned above, ringroads, bridges, facilities, maintenance-management and tolling stations and other services,

are decided to be privatized by granting 25 years of franchise as a pack.

With the Approval (no. 764) of the Presidency of High Board of Privatization dated 28.04.2011

With the decision of High Board of Privatization 2010/88 dated 15.10.2010, the roads included in the privatization scope are under the management of General Directorate of Highways in the manners of building, management and maintenance.

The privatization of 'Edirne – İstanbul – Ankara Highway', 'Pozantı – Tarsus – Mersin Highway', 'Tarsus – Adana – Gaziantep Highway' 'Toprakkale – İskenderun Highway', 'Gaziantep – Şanlıurfa Highway', 'İzmir – Çeşme Highway' 'İzmir – Aydın Highway' 'İzmir – Ankara Ringroads' 'Boğaziçi Bridge' 'Fatih Sultan Mehmet Bridge and its Ringroad' its premises, and other services facilities as a pack for 25 years promulgated No. 28036 by the law number 4046 in 25.08.2011.

For the tender mentioned above,

Deadline for preliminary qualification: 05 April 2012

Deadline of tendering: 17 May 2012

Especially in a period of 5 years, Turkey has proved its regional power; by opening itself to privatizations, it is in the work of continuing its growth. In these days, it is clearly seen that European countries are in serious economic troubles.

As we mentioned in our articles earlier, Turkey is the country of today and future. Strategic importance of Turkey comes into importance as economic power, too. Turkey's young and fast growing population also will be an exit from turmoil for the economy of Europe.

Recently, international special funds and investment funds have special interests to investment funds. These funds see European economies as risky and come to Turkey who provides a future. While Turkish government is making the judicial preparing to enable these funds for privatizations, these funds are seeking for investors in a joint venture.

If we were to be visionary, it's easy to see that 2012 and 2013 will be significant. When the pending funds come to Turkey, it will make a great development and leap forward. In this case, Turkey will be a great investment and commerce center as well as being a significant finance center of Europe and Middle East.

In addition, considering the energy privatizations that are aimed to be completed in 2012 and 2013, Turkey will be a great importance to the region as a team mate in the next 5 years.

So what we mention is that the companies that think about investing in Turkey should make their SWOT (Strengths Weaknesses Opportunities Threats) Analyses perfect. And while analyzing, they should think about the geopolitical and geostrategic assessments.

Turkey continues to drag attention of the entire world. We should not forget that the sun rises in the east. Turkey is the window opening to east."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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