Case studies of Public Private Partnership relating to Transportation sector

1. PPP in Urban Development
India, Transport Sector, Jharkhand Road Programme
Turkey, Transport Sector, Eurasia Tunnel

2. Eurasia Tunnel
Project Eurasia Tunnel
Project Proponent Government of Turkey
Project Organization Avrasya Tuneli İsletme ve Yatirim A.S
Public Organization
Directorate General of Infrastructure Investments (AYGM)
Private Organization
Yapi Merkezi İnsaat ve Sanayi A.S.
SK Engineering & Construction Co. Ltd
CAPITAL PROVIDERS
US$960 MILLION FIXED RATE LOAN US$277 MILLION
EBRD, EIB, KOREAN EMIX, Korean Export Insurance Bank,
Standard chattered bank, Sumitomo Mitsui banking
corporation and Mizuho bank
AYGM

3. Where
• Istanbul located at the crossroads of Europe and Asia and it is surrounded and divided by
sea. The two sides are connected by 3 bridges
• The tunnel constructed between Kazlicesme on the European side of Istanbul and Goztepe
on the Asian side of Istanbul and connects the two parts a city of 15 million together under
the seabed together with the bridges.
Why
• Before the construction of this Project, the two existing bridges which connect the different
continents of Istanbul were carrying much higher than their capacity,
• The congestion on these bridges led to millions of hours spent in traffic, emission of millions of
tones of CO2 and was causing a decrease in peoples’ life quality.
• Project provides fast, safe and comfortable transportation alternative for Istanbul
• Feasibility studies show that the project achieve Value-for-Money (VfM) if delivered as a PPP
Context and Strategy Supporting the Project:

4. What
• The tunnel contributes to the growth of Istanbul’s air transport by providing the most practical
link between the city’s two airports: Atatürk Airport and Sabiha Gökçen Airport.
• By decreasing distance, it will indirectly contribute to reductions in fuel consumption, noise
pollution and CO2 emissions.
Who
• Key stakeholders for this project are Istanbul citizens and the other stakeholders are;
Government of Turkey, Directorate General of Infrastructure Investments (AYGM)
Istanbul Metropolitan Municipality, Avrasya Tuneli İsletme ve Yatirim A.S.(ATAS)
• Private side : Responsible for building and operating the tunnel, expansions on the existing
connection roads of the tunnel.
• Public side: Is responsible for permissions and guarantee mechanism (min. demand guarantee,
debt assumption)
When
• Construction Period: 3 years 11 months 3 days,
• Operation Period: 25 years 11 months 9 days,
• Project got the approval to be tendered as a BOT: 6/2006,
• Implementation Contract: 11/2011,
• Financing Agreement: 12/2012.
• The tunnel was officially opened to traffic on 22 December 2016.
Context and Strategy Supporting the Project:

5. The project creates a convenient and direct link between Asia and Europe.
Increase access to essential services and promote equity
Istanbul is the largest city in Turkey and also one of the largest cities in the world in terms of population.
The number of registered vehicles in Istanbul reached 3.6 million in 2018.
Together with rapid population growth and economic development considerable pressure has been added on the
existing transportation system
Tunnel relieves Istanbul’s transcontinental traffic pressure and serves as a 'Fast', 'Economic', 'Safe', 'Comfortable' and
'Environment friendly' transportation alternative for the Istanbul Strait crossing.

6. During the EIA, all stakeholders were involved.
Total investment value: 1.4 billion dollars
Construction Period: 4 years 7 months
Operation Period: 25 years 11 months 9 days
Demonstrate the economic and financial effectiveness of the project
Engage all stakeholders
Besides the contracting authority and the SPV, the most important stakeholder is the people of İstanbul. The
construction of this Project required some main arterial roads to be closed for months. To manage the public reaction
against the Project, the benefits were expressed clearly.
During the Environmental and Social Impact Assessment, process feedbacks were taken from the related
municipalities, 25 different neighborhoods to ensure that the process includes their concerns. Besides this process is
open to the participation of all affected parties (citizens and institutions).
User-paid project with a traffic guarantee provided by the Contracting Agency. It has already reached %70 of guarantee
level in 2017.
The economic benefits of the Tunnel arising from the operation year 2018 is estimated 1.2 billion Turkish Liras.
Estimated time savings: 23 million hours Estimated savings of operating a car: 109 million vehicle/km
Estimated fuel savings: 30.000 tonnes Estimated CO2 emission savings: 18.000 tonnes

7. References
Thank You
Valusa Saikiran
2016BPLN007