FINANCING OF PUBLIC-PRIVATE PARTNERSHIP (PPP) PROJECTS

The ever-increasing diversity of social needs keeps the question of how large the public sector should be. This question, one of the fundamental questions of public economics, is undoubtedly impossible to provide a definitive answer to. Because the private sector operates with market motives and the goal of profit maximization, the public sector is forced to embrace the social sphere. In other words, the private sector, or the market as it is also known, does not have a mission to meet social needs for the purpose of creating social benefits. It is impossible for state administrators to meet all of society's needs, primarily due to financing problems. This is because the collection of public revenues, especially taxes, tends not to proceed as planned by the budget at the beginning of each period. For these reasons, it is crucial for the public sector to explore alternative financing tools for plans, projects, and activities aimed at increasing social benefits and addressing social needs, and to choose and utilize the most optimal budgetary balance options. Public-private partnership projects, which have been frequently mentioned in recent years and have remained a hot topic, are among the most prominent alternative investment options. Here, the state implements certain public services it aims to implement/promise in collaboration with the private sector, aiming to ease its own budget balance. Thus, through these collaborations, it contributes to the balancing of expenditures and revenues within the state budget. So, what are the financing methods for public-private partnership projects? Which of these are preferred, and for what reasons? These questions constitute the primary starting points of this section. It can be argued that, in Turkey, traditional financing methods such as build-operate-transfer and build-operate-lease have been largely replaced by hybrid financing methods. Of course, when the decision to undertake a public-private partnership project is made, the financing method most advantageous for the public budget should be selected.