Karaismailoğlu: No Calculation Errors in Build Operate Transfer Projects

Karaismailoğlu No Calculation Errors in Build-Operate-Transfer Projects
Karaismailoğlu No Calculation Errors in Build-Operate-Transfer Projects

Adil Karaismailoğlu, Minister of Transport and Infrastructure, answered the criticism of the ministry's account errors up to 90 percent in the guarantees given in Build Operate Transfer (BOT) projects, saying, "There is no calculation error here." Minister İsmailoğlu said that “the installment payment was made as if he had bought a house with a loan”.

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

As the head of the ministry that uses the BOT and COD model, which is widely discussed in the public, how do you evaluate 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's investment budget went to the 1st Bridge at that time. At that time, as a feasible project, serious income would be obtained from tolls and all projects in Anatolia would be financed from these incomes. Since all the investments were made in Istanbul at that time, that region developed, Anatolia remained incomplete. Turgut Özal gave importance to the highway and left the railway in the background.

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

When the AK Party governments started, the road infrastructure was 6 km and very inadequate. We increased this to 500 km. We can say that the highway has reached a certain stage and sat down. Similarly for the airline, the number of airports 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.

“Actually, we have invested a lot in the railway, but it has not been seen much yet”

In fact, we have also invested a lot in the railway, but it has not been seen much yet because first of all we renewed the old 10 thousand km line, then we are adding on it. The railway has exceeded 1.300 thousand km, of which 13 km is high-speed train. Hopefully, we will focus on the railway from now on. Due to the lack of highway infrastructure, 65 percent of the investment was highway based. As of this year, the railway has approached 50 percent. We're going to pull the highway a little lower, but of course it's not over. The weight of railways in investments will increase up to 60 percent.

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

“We will start to carry passengers on the Ankara-İzmir high-speed train line towards the end of 2024”

We will start to carry 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-tendered all the deficiencies, we delivered the site. It will be completed quickly, and it will be completed in 2024 in Gaziantep. Halkalı in Kapikule Çerkezköy- Kapikule 2024, Çerkezköy-Halkalı It ends in 2025. On the other hand, our work on the rail passage over the Yavuz Sultan Selim Bridge continues.

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

-What would you say about the criticisms of the BOT model and especially the errors in the number of passes/uses up to 90 percent?

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 financing model. We do this by sea, by road and by air. We already earn money from seaway and airline projects. We can show Antalya Airport as the most successful example. We had tendered a total of 25 billion Euros for 8,5 years after 2025. We will now receive 25 percent 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 an apron area will be built. If this is not done, the state has to do it from its own coffers.

“There is no calculation error in BOT”

In fact, it is not the calculation error made here, but the amounts corresponding to the relevant year of the investment made. So this should not be compared as 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 this. On the Istanbul-Izmir highway, we exceed the number in certain periods, while on the Ankara-Niğde road, we stay below the forecast. As a result, this investment was made without any money from the state.

“Think of it as if you bought a house and a car with this loan, like repayment in installments”

If we had done it from the state budget, we would have paid it in advance. It's like buying a house and a car with this loan. Think of it like a repayment in installments. The project is certain, the cost is certain. You will make a tender from the public budget, you will either 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 is making its money”

The Eurasia Tunnel is very successful in this regard, and we have reached 90 percent of the welcome rate. There are also operating costs of roads. Nobody questions this. 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 out of our pocket, but investments are made. In a few years it will break even. Ankara-Niğde will also increase to 60 percent.

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