Identification and Evaluation of Risks Encountered in BOT Type Transportation Projects in Turkey: Case Studies

Abstract

In Turkey, which is one of those countries that favor the use of the Build-Operate-Transfer (BOT) model, there is a growing demand for transportation investments due to the increasing urban population. BOT model contains several risk factors that directly affect projects’ success. The identification of these risks is essential to develop the best responses and the most proper risk-sharing mechanisms. This study aims to identify and discuss risks encountered in BOT transportation projects in Turkey. In this sense, case studies were conducted on three currently realized transportation projects. Results indicate that financing difficulties and problems due to inadequate feasibility studies were encountered in all three projects. Thus, several alterations had to be made to the projects' scope and the risk sharing between parties. Despite the financing problems and the no-bid situations, the realization of the projects reveals there is strong political support for the BOT projects in the country. However, failure to meet expected market demand, which is the most critical risk factor for BOT projects, was also the case in these projects. The high toll fees and the availability of different alternatives for users have affected the traffic volume for road projects. Also, nationwide closures due to Covid-19 could be the main reason for the demand shortages. Comprehensive feasibility analyses of BOT projects in terms of environmental, technical, and economic aspects are critical for minimizing problems encountered during construction and operation.