CITY HOSPITALS

After the 2000-2001 economic crisis and the rise of the AKP government, we see comprehensive reforms in many areas in Turkey’s public administration.  These reforms significantly represent neoliberal approaches in economic orientation. Public-Private Partnership (PPP) implementations came into importance between the 2000s and 2010s. The World Bank (2019) defines PPP as a tool to build high-quality infrastructure and efficient and sustainable public services for people. This article will investigate the Build-Lease-Transfer model of Public-Private Partnership and one example of the BLT model as city hospitals in Turkey with their discussions around.

Emek (2015), in his article, categorizes the PPP models as concessions, build-own-operate (BOO), build-operate-transfer (BOT), build-lease-transfer (BLT), and transfer of operation rights (TOOR).  Unlike privatized enterprises that are ruled by competition law and sectoral regulations, Emek (2015) states that both public and private parties sign PPP contracts under the PPP enabling legislation and its statutory legislations for long terms. For instance, the BLT model is regulated by law no. 6428 and allows the public-private partnership in health services. Although the BLT model enables firms to invest in other social services, we see the most concrete sample in city hospital projects. Under this regulation, the new health care facilities could be built by the private sector, generally in a state landed property, the private partner supplies the equipment and materials, and the state pays rent for 25 years through the contract (Yesiltas, 2020).

 Although the model and the regulations give PPP a chance to supply efficient and qualified services for the country, it also carries some risks. Although Emek (2015) states that the risks are shared in PPP models, he adds that PPP is understood as nearly the same as privatization in Turkey’s risk allocation. The risks are stated in the contracts between the partners, but the contract form is also open to criticism in terms of transparency. Yesiltas (2015) argues that these transparency objections come because of having different targets of the partners. As the private sector seeks to gain profit, the public executers’ main aim is to provide services. Therefore, the agreements and the details of the projects are accepted as trade-secret. In city hospitals, the costs and the details are not open to the public. Transparency International Turkey (2020) reports that practicing the city hospitals without getting approval from the legislative organ and withholding the agreement details and costs from the public are against democracy and popular sovereignty.  It also argues that the projects are built more costly compared to classical public auctions. For instance, the rent of the Kayseri city hospital for 3.5 years counterbalances the fixed investment expenditures. Additionally, the state guarantees 70% fullness in the hospitals for its private partner. Therefore, the state hospitals’ closure in especially smaller cities is discussed (Yesiltas, 2020). If the guaranteed number of the patients could not be reached, the state takes responsibility and pays the rest cost from the treasury (Transparency International Turkey, 2020).  Hence, it can be said that the hidden points in city hospital agreements cause uncontrollability. It also decreases the accountability of the executive organ to the people. As a result, it is open to exploitation and rent-seeking activities. The surplus is shared with certain groups, but it could bequeath severe problems for the future in terms of financial situation.

Finally, Emek (2015) states that although competition is one of the PPPs’ goals, it is not very crucial to provide market competition as it is in Public Procurement Law (PPL) except electricity sector as our example in health care. The Transparency International Turkey (2020) report also proves this argument. When we investigate firms’ investments, we see that with a 34.64% ratio, the Rönesans Holding holds a considerable part of city hospitals. The firms and their names could change, but the most crucial point is the relation between the firms and the government. Because of the new system and Turkey’s fragile democracy, the partnership could lose its meaning and turn to a tool for providing the actors’ interests.

In conclusion, there are many advantages and disadvantages of PPPs. In this study, the city hospitals example has been investigated. Even though city hospitals seem appreciated by people, especially in the pandemic, there could also some political and economic conflicts.

References

Emek, Uğur (2015) “Turkish experience with public private partnerships in infrastructure:

Opportunities and challenges”, Utilities Policy, Vol. 37 (2015), pp. 120-129.

Yeşi̇ltaş, A . (2020). SAĞLIK SEKTÖRÜNDE KAMU ÖZEL ORTAKLIĞI: ŞEHİR

HASTANELERİ ÜZERİNE BİR DEĞERLENDİRME . Uluslararası Sağlık Yönetimi ve Stratejileri Araştırma Dergisi , 6 (1) , 15-28 . Retrieved from https://dergipark.org.tr/tr/pub/usaysad/issue/54067/728992

Transparency International Turkey (2020). Şehir Hastaneleri. [Report]. Transparency International Turkey Retrieved from https://www.seffaflik.org/wp-content/uploads/2020/05/%C5%9Eehir-Hastaneleri.pdf

The World Bank (2019) Public-Private Partnerships. Retrieved from https://www.worldbank.org/en/topic/publicprivatepartnerships/overview

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