The Privatization Stalemate: Bridges, Highways, and the Public Wealth

Turkey is once again preparing for bridge and highway privatization. The government is apparently preparing to release the Bosphorus bridges and nine highways as a package. This move, billed as "the largest privatization in history," is actually a choice based on short-term budget revenue. But the issue isn't just a financial maneuver; it's a debate about the essence of economic policy: the balance between the state and the private sector in managing public assets. But we can't help but ask this simple question: Will the bridges be sold? When privatization is mentioned, the first thing that comes to mind is "money flowing into the state's coffers." So what then?

Bridges and highways are not commodities, but public services. Like water and electricity, transportation is the backbone of social life. It's not a service to be managed and priced by private companies driven by profit, but rather an area that must be planned in the public interest. Bridges and highways are not merely cash-flow-generating assets; they are the most critical links in the logistics chain, production, and trade. Granting these services to private consortiums through long-term concessions weakens the state's direct control over strategic infrastructure. This carries the same logical problems as privatizing power lines or ports: public sovereignty is confined to long-term contracts, reducing policy flexibility.

One dimension of privatization-related economic policy is social equity. Highways and bridges directly impact people's daily lives. As the private sector pursues profit maximization, tolls soar. The state has the power to regulate prices on paper, but the "compensation risks" of long-term contracts make such intervention difficult in practice. The result is that transportation costs are directly burdened by household budgets.

In many PPP models implemented in Türkiye to date, revenue guarantees have favored private investors, while risks have been placed on the public sector. Highway and bridge privatizations carry a similar risk. If expected traffic volumes don't materialize, the government pays the difference. In other words, while privatization provides short-term cash flow to the budget, it creates new burdens in the medium term. It's also worth noting that these models, which increase public spending in the long term, have structurally kept inflation high. Examples of bankruptcies since the 1980s demonstrate the fragility of this mechanism.

France transferred most of its highways to private companies in the 2000s. Giants like Vinci and Eiffage took over. Prices rose, public outrage mounted, and the government is still discussing the possibility of reclaiming the contracts. In Spain, some privatized highways failed to meet traffic expectations, companies went bankrupt, and the state was forced to take over again. This demonstrates that privatizations often create new costs for the public, not "financial salvation."

In the US, the Chicago Skyway was transferred to a private consortium for a 99-year term in 2005. However, the debt structure proved unsustainable, and the concession changed hands several times. A similar situation occurred with the Indiana Toll Road: the consortium went bankrupt due to high debt, and cost disputes arose between the public and investors. In Canada, the privatization of the 407 ETR generated short-term revenue, but the provisions of the 99-year contract favoring the private company resulted in ever-increasing tolls for users.

Chile has become the country that has privatized highways the most in Latin America. In the 1990s, many highways were transferred to the private sector through a concession model. Today, the country has a transportation system that burdens users with heavy fees. In Brazil, some highway concessions have also been the target of public criticism for "high prices and low service."

In 2005, Japan split the Japan Highway Public Corporation into private companies. However, all of these companies remained structures with strong state influence. In other words, even Japan didn't pursue privatization as a complete free market transfer; it retained strategic control. In highway and bridge projects undertaken under the PPP model in India and Indonesia, traffic forecasts frequently failed, and the public faced additional costs. International examples demonstrate that bridge and highway privatizations often yield no sustainable benefits beyond short-term cash generation. The message of these examples is a single point: When strategic infrastructure projects are left to market logic, the public interest takes a back seat.

ALTERNATIVE FINANCING METHODS

Germany, the Scandinavian countries, and the UK adopted a different approach. Instead of selling off highways, they invested in them with public financing or government bonds. In this model, the state maintained strategic control while managing the budget burden through new financing instruments such as international development banks or green bonds. This avoided the long-term dependencies created by privatization.

Bridge and highway privatizations, as they currently stand in Türkiye, pose a significant economic and political dilemma. In the short term, they mean hot money, and in the long term, a loss of strategic control and social costs. Just a few days ago, Ali Babacan offered self-criticism regarding the privatizations carried out during the AKP's first term, expressing his own regret and the damage caused by the transfer of energy companies from the public to the private sector. However, he ignored and ignored the warnings made at the time.

The real issue isn't selling off public assets to cover the budget, as Şimşek aims to do; rather, as a responsible statesman, developing financing models that protect the public interest, strategic control, and social justice. Otherwise, every move made with the "sold out, we're done" mentality will only exacerbate future debts and dependencies.

Türkiye faces two paths: sell off its bridges and highways for short-term revenue or develop transparent and sustainable financing models that protect the long-term public interest. Global examples suggest that the latter path is more prudent. However, judging by the current PPP disasters, it's clear that the AKP government will not choose the path that provides the public good.