No calculation errors in Build Operate Transfer projects

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Karaismailoğlu No miscalculation in build-operate-transfer projects

Adil Karaismailoğlu, Minister of Transport and Infrastructure, responded to criticism over ministry account errors of up to 90% in guarantees given in Build Operate Transfer (BOT) projects, saying: “There is no there is no miscalculation here”. Minister İsmailoğlu said that “the deposit payment was made as if he had bought a house with a loan”.

Minister Karaismailoğlu answered questions from Maruf Buzcugil and Gökçe from Dünya newspaper. answered. Karaismailoğlu said:

As the head of the ministry using the BOT and COD model, which is widely discussed in the public, how do you rate the system?

If the state had a mind in the 1970s, the 1st bridge (Istanbul) would have been built entirely by BOT, and it would not have been a burden on the state. The entire state investment budget went to the 1st bridge at that time. At that time, as a feasible project, significant revenue would be derived from tolls and all projects in Anatolia would be funded from this revenue. As all the investments were made in Istanbul at that time, this region developed, Anatolia remained incomplete. Turgut Özal gave prominence to the highway and left the railway in the background.

Large investor organizations should have a master plan. Before starting construction, you definitely need a master plan. So you have to think 5 times and take a step. We have little money, we must make good use of this money. A must for this is planning.

When the AKP Party governments started, the road infrastructure was 6 km and very insufficient. We increased that to 500km. It can be said that the highway has reached a certain stage and has sat down. Likewise for the airline, the number of airports has increased from 28 to 500. Rize, Artvin, Çukurova will be completed this year, and Tokat will be opened at the end of this month. All our infrastructure will be completed.

“In fact, we have invested a lot in rail, but it hasn’t been seen much yet”

In fact, we also invested a lot in the railway, but it hasn’t seen much yet because we first renewed the old 10,000 km line and then added it. The railway has exceeded 1,300,000 km, including 13 km of high-speed rail. Hopefully we will focus on the railroad from now on. Due to the lack of road infrastructure, 65% of investments were based on highways. Since this year, the railway has approached 50%. We’re going to pull the highway a little lower, but of course it’s not over. The weight of the railways in investments will increase by up to 60%.

Ankara-İzmir, Halkalı-There are Kapikule lines. There are very few gaps in Ankara-Sivas, we will open this line until the end of the year. We sleep in Karaman, from here we will go to Niğde and from there to Mersin. Adana, Osmaniye, Gaziantep are important.

“We will start transporting passengers on the Ankara-İzmir high-speed train line by the end of 2024”

We will start transporting passengers towards the end of 2024 on the Ankara-İzmir high-speed train line. It continues between Manisa, Salihli and Eşme Uyak. Afyon-Polatlı was tendered, we re-called all defects, we delivered the site. It will be finished quickly, and it will be finished in 2024 in Gaziantep. Halkalı to Kapikule Çerkezköy- Kapikule 2024, Çerkezköy-Halkalı It ends in 2025. On the other hand, our work on the railway crossing over the Yavuz Sultan Selim Bridge is continuing.

“There is a huge infrastructure deficit in our country, the budget is not enough to cover it”

-How about the criticisms of the BOT model and in particular errors on the number of passages/uses up to 90%?

There is a huge infrastructure deficit in our country, the budget is not enough to cover it. We contribute to the budget with an alternative funding model. We do it by sea, by road and by air. There is already money from maritime and air projects. kazanwe eat. We can show Antalya Airport as the most successful example. We had offered a total of 25 billion euros for 8.5 years after 2025. We will now receive 25% of this amount of 2 billion 138 million euros at the end of this month. In addition, we will invest 2025 million euros in Antalya Airport until 785. The airport has filled its capacity, new domestic and international flights and a apron will be built. If this is not done, the state must do it from its own funds.

“There is no calculation error in BOT”

In fact, it is not a question here of the error of calculation committed, but of the amounts corresponding to the relevant year of the investment carried out. This should therefore not be considered an error. You have invested 10 units here, we calculate how long this investment can return. In other words, the financial model of its return in the operating process. You give the number of vehicles, but you have to look at the price of that. On the Istanbul-Izmir highway, we exceed the number at certain times, while on the Ankara-Niğde axis, we remain below the forecast. As a result, this investment was made without any state money.

“Think of it like buying a house and a car with this loan, like paying it off in installments”

If we had done it from the state budget, we would have paid for it in advance. It’s like buying a house and a car with this loan. Think of it as a repayment in installments. The project is certain, the cost is certain. You will do a tender from the government budget, either you will do it with BOT and COD, or you will find an external loan and make the government debt, and you will pay it back in a certain time. We made the last railway tenders with foreign credit.

“The Eurasia tunnel makes money”

The Eurasia tunnel is very successful in this regard, and we have achieved 90% acceptance. There are also road operating costs. Nobody questions that. The Eurasia Tunnel alone has an annual operating cost of 500 million TL. Last year we gave 400 million to cover the warranty gap. In other words, there is no money coming out of our pocket, but investments are being made. In a few years, it will break even. Ankara-Niğde will also increase to 60%.

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