Turkey Considers Privatising Infrastructure Assets to Boost Investment
Turkey plans to auction the operating rights for several of the country’s major road links, including two bridges in Istanbul that connect Asia with Europe.
Control of the July 15 Martyrs and Fatih Sultan Mehmet bridges, along with eight highways and two ring roads, will be offered as individual lots to private investors for 30-year terms under a presidential decree published in the official gazette on September 5. Under the decree, arrangements for all listed projects must be completed by December 31, 2031. While lease durations have been set, broader terms and conditions for taking over operations, including toll pricing, have not yet been announced.
The centerpiece of the privatization plan is the two Bosphorus bridges, which together carry more than 400,000 vehicles daily, according to news website Turkey Today. Along with a third bridge that handles most heavy vehicle traffic across the strait, plus two tunnels — one for road traffic and one for rail — these crossings represent the main links between Europe and Asia in a city of 16 million people. Tolls are already collected on journeys across both bridges and through the vehicle tunnel, and investors are likely to receive rights to revenue from each piece of infrastructure over a set period in exchange for an upfront payment.
Turkey’s history with similar privatization efforts offers a cautionary note. In 2012, attempts to privatize the two bridges along with more than 1,000 kilometers of toll roads collapsed after offers fell short of the $7 billion base set by the government. More than a decade later, with foreign direct investment declining in favor of short-term capital flowing into the local debt market, Turkey’s leadership may need to adjust expectations. Economist Iris Cibre Lostar said the government is actively seeking alternative sources of capital. “When we look at the current-account balance, we see FDI has been negative for the past six months and less than $2 billion annualised,” Cibre Lostar said. “There is a need for larger sums of money to come into the economy.”
Other infrastructure links expected to draw investor interest include highways connecting Istanbul to Turkey’s western European borders and the city’s main route to the capital, Ankara, roughly 400 kilometers to the east. Highways serving Izmir, the country’s third-largest city and a key Mediterranean logistics hub, are also included in the privatization plan.
It remains unclear exactly where the necessary investment will come from. In 2021, Reuters reported that Turkey and the UAE signed a memorandum of understanding aimed at directing billions of dollars in Gulf investment toward Turkish assets, including transport and logistics infrastructure. However, disagreements over terms for several projects, including the port of Izmir, meant none of the larger planned investments materialized, according to Maritime Executive.
Cibre Lostar said she doubts the UAE or other Gulf states will commit to new investments in Turkish infrastructure at this time. “In the past we saw demand from the Gulf but currently, due to the Hormuz Strait crisis, there has been a squeezing of their income, so I do not believe Gulf capital is seeking to invest here,” she said.
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