Criticism of the late Erbakan’s Build Operate Transfer model has become a social media agenda

The 1915 Canakkale Bridge, opened by President Erdogan yesterday, was the last structure to be built in a construction-operation-relocation model, also known as public-private cooperation. The criticisms brought to the build-operation-relocation model by the late chairman of the Welfare Party, Necmettin Erbakan, have been on the agenda of social media. In his speech in the video in question, Erbakan criticizes the Build-Operate-Transfer model for “the future is mortgaged.”

After the opening of the Canakkale Bridge, a video that spread rapidly on social media became the agenda for Turkey. In the video, Necmettin Erbakan, the late chairman of the Welfare Party. Build-Operate-Transfer ModelIt contains criticisms of what he brought. In his speech in the video, Erbakan said, “My dear friends, neither privatization nor this new tax law, nor the build-operation-relocation model seems to be the case. Build-Operate-Transfer means selling the future. In the future, 1200 lira will get 200 lira of electricity and sell it to others, and 40 years later everyone will pay 200 lira of electricity at 1200 lirakWh. In this way, we have already sold the future and divided it into pieces. Why should we take this budget seriously and speak for God when it doesn’t look like this?‘He criticizes.

ERDOĞAN: Build-Operation-Transfer model continues

President Erdogan was proud of the work that emerged in his speech at the opening ceremony of the Canakkale Bridge. In his speech, Prime Minister Erdogan said, “The 1915 Canakkale Bridge is the last work built on a build-operated transfer model, also known as public-private partnership. I hope the rest of this model doesn’t stay here. We have 30 years of history in our country, and the most successful example of our time has emerged. 134 countries around the world are using this model in different fields. In public-private partnership Europe 3rd in the world and 13th in the world. Model performance. In this way, Turkey has made an investment of $ 37.5 billion in the transport sector alone over the last 20 years, which means it is external, not from our own cash. They achieved this by bringing in from. They contributed to 395. What if they made the same investment with $ 1 billion in national income, $ 838 billion in production, 1 million in employment, and budget resources alone? You’ll have to wait ten years. “

How much does the Canakkale Bridge cost to the citizens?

The 1915 Canakkale Bridge, built with the Build-Operate-Transfer model, was guaranteed to pass 45,000 vehicles per day. Under the guarantee given, the price per vehicle was € 15 + VAT. This contracted rate is renewed in response to inflation in the euro area, so if you calculate the inflation at the end of 2021, the transition guarantee for 2022 will be 17.7 euros (290 TL).

Therefore, the annual guarantee fee for the bridge was about 380 million euros and the total state guarantee given during the operation period was about 6 billion euros.

The annual number of vehicles operated by GESTAŞ, which operates ferries, is approximately 10,000 per day. In 2019, before the pandemic, an average of 12,000 vehicles were shipped. In other words, the number of vehicles carried by ferry is well below the 45,000 warranty.

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Delays earn millions of euros

Construction of the 4.5-kilometer-long bridge was completed 1.5 years before the time promised in the bid. The bridge was scheduled to open on February 26, the birthday of President Erdogan. However, the opening was postponed to March 18th, Canakkale’s Victory and Martyrs’ Day. Prime Minister Erdogan announced the postponement on his Twitter account, saying, “At the request of the citizens, we have decided to realize the postponement on March 18, the anniversary of the victory of Canakkale.”

According to spokesman Çiğdem Toker, the state left € 15 million in the pocket of a 21-day delay. Therefore, taking into account the daily guarantee of the contract, this postponement brought about € 15 million to the Treasury.

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What is Build Operation Transfer?

Limak Holding, one of the project’s contractors, is known as one of the five companies with the highest bids from the Turkish state. The name of this company is often associated with companies such as Cengiz, Kalyon, and Kolin. The build-operate-transfer model comes to the fore in the bids these construction companies receive from the government.

The Build-Operate-Transfer (BOT) model assumes that public infrastructure investments or services are funded by private companies. In this model, the company that bears the cost of the investment also undertakes the operation of the cost-bearing project within a period determined by the general public.

The company sells the services produced during this period to public institutions at a rate mutually determined by the parties. At the end of the specified period, the company will transfer the facilities it operates to the relevant public authorities in a complete and functional manner.

Frequently used in recent investments in Turkey, companies typically receive a user guarantee on a contract with the government. For example, a company that builds an airport receives a passenger guarantee, and a company that builds a highway or bridge receives a transit guarantee. In addition, if the toll is high, the state will pay the company the rest of the guaranteed toll.

Government pays billions of dollars each year

According to Professor Dr. Uğur EmekThe guaranteed payment for Osmangazi Bridge is 688TL in 2022. However, no passengers can meet this high number, so the toll for bridges determined by the state is currently 184.5 TL. The difference of 503.5 TL is covered by the Treasury.

Prime Minister Erdogan announces the price of the Canakkale Bridge in 1915. The bridge will open today and will give a speech at 16:00. If the bridge fee is less than the guaranteed € 17.7, the fee will be collected by the Treasury. In addition to this, 45,000 vehicles must cross the bridge daily to prevent the Treasury from suffering losses. However, it is unclear if this number will be reached.

Target failed in EURASIA TUNNEL

High-pass guarantees on many bridges and highways cost the Treasury millions of dollars each year. For example, according to the warranty given, more than 120 million vehicles had to pass through the Eurasian tunnel in the five years from 2017 to 2021.

However, according to the information of Minister Karaismailoğlu, the number of intersections was only 79 million. In other words, only 65 percent of the transit guarantee target was achieved. The fare for vehicles that were guaranteed but did not pass was paid to the company from the Treasury’s financial resources.