Public Made, Public Operated, Public Earned: The Constitutive Logic of Revenue Sovereignty
\nTurkey's first Bosphorus bridge opened in 1973: July 15 Martyrs Bridge.<\/p>\n
In 1988 came the second bridge: Fatih Sultan Mehmet Bridge.<\/p>\n
These two bridges are not the political project of any particular era, but the product of the Republic's public investment approach. The state borrowed, built, operated and collected the revenue. Costs were paid over the years. The bridges have completed their depreciation. What is left? Continuous, regular and reliable public revenue.
\nHere we need to pause and think.<\/p>\n
When an infrastructure investment is completed, two things happen. Either the investment remains only a physical asset or it starts to generate a financial flow. Bosphorus bridges fall into the latter category. They are not just means of transportation; they are instruments of public finance that generate regular cash flows.<\/p>\n
At this point, it is important to remember an important fact: Infrastructure is not just concrete. Infrastructure generates revenue. And the capacity to generate revenue is part of the sovereignty of the state.
\nSovereignty is not only about drawing borders. Sovereignty is not only a security apparatus. Sovereignty is the capacity for fiscal decision-making. The state's ability to raise resources in times of crisis, to implement social policy and to provide economic direction is directly proportional to the revenue instruments it possesses.<\/p>\n
Bosphorus bridges are not ordinary investments:
\nThey are transit lines with no alternatives.
\nThere is a daily flow of essential traffic.
\nDemand risk is low.
\nThe revenue stream is continuous.<\/p>\n
These are qualities that any private sector investor would dream of. Because such assets provide low uncertainty, predictable and long-term income. In the economics literature, such assets are defined as \u201ccash-generating strategic assets\u201d. For the social state, it has a different meaning: This income is the capacity to finance social policy without raising taxes.<\/p>\n
Public finance has three pillars:
\nTax
\nBorrowing
\nPublic operating income
\nThe Bosphorus bridges were one of the strongest examples of the third pillar. The state was not only a tax collector but also a revenue generator.
\nThis distinction is vital.
\nTax is an instrument with political costs.
\nBorrowing is an instrument that burdens the future.
\nBut public enterprise income is a regular source of production.
\nFiscal independence increases when the state has operating income. This independence means not only budget balance but also policy flexibility.<\/p>\n
This model had another characteristic: Price sovereignty. If the state wished, it could regulate tolls for social purposes. It could offer discounts in times of crisis. It could provide free passage in times of disaster. Because the right to operate was in the public domain.<\/p>\n
This is what sovereignty is all about: The power to dispose of income.
\nThis was basically the understanding of infrastructure until the 2000s. It may be slow, it may be limited, but public revenue and public control were essential.<\/p>\n
This model was not perfect. There could be financing problems. Investments were slower. But the basic principle was clear: If the public bears the risk, the public bears the return.
\nThis principle is the foundation of fiscal sanity.<\/p>\n
Depreciated infrastructure is no longer investment. It is an instrument of financial sovereignty. The long-term transfer of the right to operate such an asset means the de facto transfer of revenue sovereignty, even if ownership is not transferred. This is because sovereignty is not only ownership but also the power to dispose.<\/p>\n
The Republic's understanding of public investment positioned the state as an active economic actor rather than a passive regulator. The state was both investor, operator and revenue generator.<\/p>\n
Then the paradigm shifted.
\nThis change was not only a change in the financing model. It was a transformation of the economic role of the state.<\/p>\n
After 2002, infrastructure investments really accelerated. Motorways, bridges, tunnels, city hospitals... The AKP government led by Recep Tayyip Erdo\u011fan made infrastructure the showcase of growth. The \u2019we are doing it\u201c discourse became the center of politics.
\nThis is a period of quantitative growth. Kilometers increased. The number of bridges increased. Tunnels increased. Airports increased. Infrastructure visibly expanded.<\/p>\n
But the question was: How is it done?
\nAnswer: Build-Operate-Transfer (BOT).<\/p>\n
The BOT model is theoretically a model of cooperation between the public and private sectors based on risk sharing. The state does not finance the entire investment from the budget. The private sector builds the project, operates it and transfers it to the state at the end of a certain period.<\/p>\n
On paper, the model is this:
\nRisk is shared.
\nThe financing burden eases.
\nInvestment accelerates.<\/p>\n
In practice, however, the model was structured differently.<\/p>\n
Among the major projects built with this model are the following:
\nOsmangazi Bridge
\n1915 \u00c7anakkale Bridge<\/p>\n
Common features of these projects:
\nDaily vehicle pass guarantee
\nCurrency (USD\/Euro) based fee
\nLong-term (15-25 years) contract
\nPublic obligation to pay the demand difference<\/p>\n
When these four elements are considered together, the result is not classic risk sharing, but risk asymmetry.
\nLet's be concrete.
\nThe daily guarantee for the Osmangazi Bridge was around 40 thousand vehicles. Realized traffic was significantly below this in the first years. The difference was paid by the public.<\/p>\n
This means the following: If demand expectations do not materialize, the investor does not make a loss. The public makes up the difference.<\/p>\n
The daily guarantee for the 1915 \u00c7anakkale Bridge is around 45 thousand vehicles. Actual passage in the first years was well below this. The difference was again covered by the public budget.
\nThere is a systematic mechanism here.
\nDemand forecasting is highly determined by the private sector.
\nIf realization is lower, the difference is paid by the public.
\nThe risk is expropriated.<\/p>\n
Now let's get to the most critical point: Foreign exchange.
\nIn the 2009-2013 period, 1 dollar was around 1.5-3 TL.
\nAfter 2023, 1 dollar rose above 20 TL.
\nSame contract.
\nSame amount of guarantee.
\nBut the exchange rate multiplier has changed.
\nSo same project, same traffic, but the public burden has multiplied.
\nExample.
\nLet's assume a guaranteed difference of 150 million euros per year.
\nWhen the Euro was 5 TL:
\n750 million TL.
\nWhen the Euro is 25 TL:
\n3.75 billion TL.
\nThe difference: 3 billion TL.
\nThis difference does not appear as \u201cdebt\u201d. But it comes out of the budget.<\/p>\n
The critical point here is this: This payment does not appear directly in the public debt stock. However, it creates a de facto debt effect. Because a regular and compulsory payment obligation has been created. This means this: At this point, it is no longer a question of technical financing choices. It is the transformation of the role of the state. A productive state takes risks but generates income. What emerges here is not classical privatization. Because the ownership may not have been transferred. But the revenue mechanism is contracted. This is not an expansion of fiscal capacity; it is tying it to the future.<\/p>\n The BOT model is not theoretically bad. However, if the risk sharing is not symmetric, if the FX-based guarantee puts the exchange rate risk on the public, and if the contracts create long-term fixed payment commitments, the model ceases to be investment financing and generates vulnerability for the public budget. This is where the first contraction of fiscal sovereignty begins. Because, new projects aside, the real issue is the transfer of the operating rights of depreciated public bridges and highways. July 15th Martyrs Bridge Now the question is: Because public finance is based on three sources: If you weaken the third pillar, two options remain: A 25-year transfer of operation means: Now let's put the question clearly: At this point, the technical debate ends and the political debate begins.<\/p>\n In the post-2002 period, the government led by Recep Tayyip Erdo\u011fan used infrastructure as an engine of growth. But it also tied long-term revenue streams to financial contracts. This was a conscious choice. The public assumed risk to accelerate the pace of investment. The problem is this: The fundamental question here is this: Will the state become a guarantor of long-term revenue streams to financial markets?, At this point, the Manifesto of Publicist Republican Infrastructure becomes imperative. The nationalist Republican model is not romanticism. This model is fiscal wisdom. This model is sovereignty. This model is the social state.<\/p>","protected":false},"author":14,"featured_media":282829,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[286],"tags":[15,78,289],"class_list":{"0":"post-282828","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-yazarlar","8":"tag-chp","9":"tag-kemal-kilicdaroglu","10":"tag-manset"},"_links":{"self":[{"href":"https:\/\/halkweb.com.tr\/en\/wp-json\/wp\/v2\/posts\/282828","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/halkweb.com.tr\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/halkweb.com.tr\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/halkweb.com.tr\/en\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/halkweb.com.tr\/en\/wp-json\/wp\/v2\/comments?post=282828"}],"version-history":[{"count":1,"href":"https:\/\/halkweb.com.tr\/en\/wp-json\/wp\/v2\/posts\/282828\/revisions"}],"predecessor-version":[{"id":282830,"href":"https:\/\/halkweb.com.tr\/en\/wp-json\/wp\/v2\/posts\/282828\/revisions\/282830"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/halkweb.com.tr\/en\/wp-json\/wp\/v2\/media\/282829"}],"wp:attachment":[{"href":"https:\/\/halkweb.com.tr\/en\/wp-json\/wp\/v2\/media?parent=282828"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/halkweb.com.tr\/en\/wp-json\/wp\/v2\/categories?post=282828"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/halkweb.com.tr\/en\/wp-json\/wp\/v2\/tags?post=282828"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nThis is called a \u201cconditional obligation\u201d in the literature.
\nIn Turkish: Hidden debt.
\nThe most repeated phrase of the AKP was this:
\n\u201cWe did it without any money from the state coffers.\u201d<\/em><\/strong>
\nThis is not true.
\nMaybe the money didn't come out today.
\nBut there was a 20-25 year payment commitment.
\nThis debt has been pushed off the balance sheet.
\nThere is a very important financial fact here.
\nDevlet %8\u20139 civar\u0131nda bor\u00e7lanabiliyorken, \u00f6zel sekt\u00f6r\u00fcn finansman maliyeti %12\u201314 band\u0131nda oldu. 10 milyar dolarl\u0131k bir projede bu faiz fark\u0131 20 y\u0131l sonunda milyarlarca dolar ek maliyet demektir.<\/p>\n
\nIf the state had borrowed directly, it could have financed it at a lower cost.
\nBut more expensive financing was provided through the private sector.
\nThe difference was compensated either by guarantees or tolls.
\nSo the citizen paid.<\/p>\n
\nAnd here a new type of state emerged:
\nIt is not the producing state,
\nThe guarantor is the state.
\nThis distinction is decisive.<\/p>\n
\nThe guaranteeing state takes the risk, but the revenue is contractual.
\nWho is at risk?
\nPublic sector if demand falls
\nIf the exchange rate increases, the public
\nIf financing is expensive, public
\nWho gets the return?
\nContract holder.
\nThis is not equal partnership.
\nThis is the nationalization of risk and privatization of return.<\/p>\n
\nThe state assumed fiscal risk to increase the pace of investment, but limited its sovereignty over revenue.<\/p>\n
\nAt this stage, the state ceased to be an investor and became a contract guarantor.<\/p>\n
\nBut the real break is not yet complete.<\/p>\n
\nWhat is transferred there is not risk.
\nIt is a ready income stream.<\/p>\nBosphorus Bridges and Rent Transfer: If Not a Sale, What Is It?<\/h3>\n
\nFatih Sultan Mehmet Bridge
\nThese two bridges were built in 1973 and 1988. Their costs have risen over the years. There is no demand risk. No alternative. The backbone of Istanbul traffic.
\nThe economic definition of such infrastructure is clear: guaranteed cash flow.
\nThe critical concept here is the depreciated strategic asset.
\nDepreciated infrastructure is no longer an investment. It is a financial instrument that generates continuous income. Such an asset provides regular and predictable cash flows for the state budget. This cash flow is one of the main instruments for social spending, for fiscal expansion in times of crisis and for producing public services without tax increases.<\/p>\n
\nIf these bridges were not sold but the operating rights were transferred for 20-25 years, what happened?
\nProperty remains with the state.
\nBut the revenue stream goes to private enterprise.
\nOne could say that this is not technically \u201cprivatization\u201d.
\nBut the economic outcome is the same: Revenue comes out of the public purse.
\nThis point requires conceptual clarity.
\nPrivatization is not just a transfer of ownership.
\nRevenue devolution is also de facto privatization.
\nLet's be concrete.
\nLet's assume that the annual net revenue potential of these two bridges is the equivalent of 1 billion dollars (a realistic band given traffic volumes and toll levels).
\nFor 25 years:
\n1 billion \u00d7 25 = 25 billion dollars.
\nThis is gross potential income.
\nNow let's think:
\nLet's say this operating right is transferred for 5-6 billion dollars.
\nWhat happened?
\n25 billion in regular, low-risk, strategic revenue streams were traded for $6 billion in upfront collections.
\nWhat does this mean in the finance literature?
\nDisposal of a high-yielding long-term asset for short-term cash needs.
\nThis is not investment.
\nThis is balance sheet engineering.
\nHere, a long-term high-yielding asset was introduced to cover the budget deficit or to meet short-term cash needs.
\nThis is not fiscal sustainability.
\nThis is short-term relief for long-term loss of revenue.
\nAnd here the concept needs to be clear:
\nThis is not risk transfer.
\nThis is rent transfer.
\nWhat is rent?
\nGuaranteed income without risk.
\nTransferring the right to operate depreciated bridges with guaranteed demand is not transferring the investment risk. It is transferring a ready revenue stream.
\nAt this point, system criticism is imperative.
\nIf the state transfers a new and risky project to the private sector, we can talk about risk transfer.
\nBut if the risk has disappeared and demand is already guaranteed, what is transferred is not risk but profit.
\nFor a social democrat, the issue starts right here.<\/p>\n
\nTax
\nDebt
\nPublic operating income<\/p>\n
\nEither you increase taxes.
\nEither you borrow money.
\nThis math is simple.
\nWhen public operating income weakens, the budget deficit increases.
\nWhen the budget deficit increases, either taxes go up or debt goes up.
\nIn both cases, the financial burden returns to society.
\nIn other words, the transfer of operating rights is indirect tax pressure or indirect debt pressure.
\nAnd it is not only a financial issue.
\nIt is a question of intergenerational justice.<\/p>\n
\nToday's political decision narrows the fiscal space of the next 3-4 governments.
\nToday, money is taken in advance.
\nBut tomorrow there will be a loss of regular income.
\nThis regular loss of income narrows the scope for social spending in times of crisis.
\nFor example, in times of economic contraction, the state may want to reduce tolls. But if the operating rights have been transferred, this decision is stuck in the contract.
\nIt may want to provide free passage in times of disaster. But the contract sets limits.
\nPrice dominance disappears.
\nThis is not only a financial but also a political contraction.<\/p>\n
\nShould the state use the revenue from Istanbul's mandatory transit line for social policy?
\nOr should this income be used as collateral for financing contracts?
\nThis is not technical.
\nThis is an ideological choice.
\nAnd this choice has been made systematically in favor of financialization in the post-2000 period.
\nInfrastructure has grown.
\nBut the income regime has been marketized.
\nThe state has ceased to be a producer.
\nIt has become a guarantor state.
\nAt this point, the system has become the following:
\nIn new projects, the risk is public and the return is contractual.
\nIn older projects, a ready-made revenue stream is the subject of the circuit.
\nIn other words, both future income and present income are tied to the contract mechanism.
\nThis is no longer a discussion of individual projects.
\nThis is an income regime transformation.
\nAnd here the debate has to become even more fierce.
\nBecause this model cannot be explained solely by the preference of the government.
\nIt should also be discussed whether the opposition has been able to build a clear alternative to this regime.
\nThe Rent Regime, the Opposition's Breaking Moment and the Problem of No Alternative
\nIt must now be named: The infrastructure model in Turkey is a rent regime.
\nRent is a guaranteed income stream that is independent of production risk.
\nIf you're in a project;
\nIf demand falls, the public pays,
\nIf the exchange rate increases, the public pays,
\nIf the cost of financing is high, the public covers the difference,
\nBut if revenues exceed expectations, the profits remain in the private sector,
\nthere is no classic market risk there.
\nThere is publicly secured rent.
\nThe Osmangazi Bridge and the 1915 \u00c7anakkale Bridge are typical examples of this mechanism.
\nBut it is not only about these projects.
\nIf the operating rights of depreciated and demand-guaranteed public assets such as the July 15th Martyrs' Bridge and the Fatih Sultan Mehmet Bridge are being transferred, have been transferred, or are being considered for transfer, this is not an investment model, but a contractualization of the ready flow of rent.<\/p>\n
\nBut this choice put fiscal sustainability on the back burner.<\/p>\n
\nIs this model development or contractual income transfer?
\nAnd now to the more difficult question.
\nWhat did the opposition do?
\nUnder Kemal Kilicdaroglu, the CHP has been paying guarantee payments and \u201cgang of five\u201d<\/strong> and brought the discourse to the agenda in a strong way. The criticisms were justified. The public burden was made visible.
\nIt went even further.
\nKilicdaroglu \u2018We will nationalize BOTs\u2019<\/strong> He said.
\nFor the first time, this was a political statement targeting the model itself. Because expropriation means taking back the sovereignty of income. This is not only a criticism of the contract, but a criticism of the regime.
\nHowever, the alliance partners at the time did not support this approach.
\nSome alliance components, including Ali Babacan and Meral Ak\u015fener, opposed the nationalization discourse. The arguments cited included the risk of international arbitration, investor confidence, legal sanctions and economic stability.
\nThere was a break at this point.
\nModel criticism withdrawn.
\nThe rhetoric of expropriation has been softened.
\nThe debate boiled down to the cost of the contract.
\nBut the issue was not the cost, it was the system.
\nThis retreat showed that:
\nOpposition actors could criticize,
\nBut it could not put forward an institutional and clear alternative to the financialized infrastructure regime.
\nAfterwards, the new CHP leadership did not raise this issue again strongly.
\nThis silence is no coincidence.
\nBecause it is not just about guarantee payments. It is about the income regime.
\nUnless it is said that depreciated strategic infrastructures will remain in the public sector,
\nUnless it is said that FX-based guarantee contracts will be structurally banned,
\nUnless it is said that public operating capacity will be re-established,
\nUnless the primacy of public interest over contractual supremacy is explicitly advocated,
\nthe regime continues.
\nPower can change.
\nBut the rent regime remains.<\/p>\n
\nWill Turkey see infrastructure as a showcase for growth?,
\nor as a fundamental element of income sovereignty?<\/p>\n
\nor is it a public actor that produces, operates and uses the income for social balance?<\/p>\n
\nStrategic and depreciated assets cannot be transferred.
\nJuly 15th Martyrs Bridge
\nFatih Sultan Mehmet Bridge
\nThese bridges are no longer investments.
\nThese are public assets that generate regular revenues.
\nThis type of infrastructure has no alternatives, its demand is close to guaranteed, its cost has been recovered and it generates continuous revenue.
\nThe long-term transfer of the right to operate these assets is not a transfer of risk, but a transfer of rent.
\nForeign exchange guaranteed contracts should be banned.
\nOsmangazi Bridge
\n1915 \u00c7anakkale Bridge
\nFX guarantees shift the exchange rate risk to the public sector.
\nA currency shock multiplies the fiscal burden.
\nThis model protects the investor; it makes the public vulnerable.
\nIf investment is to be made, demand risk will be shared, an upper bound mechanism for exchange rate shocks will be put in place and surplus revenue will be shared with the public.
\nPublic operating capacity must be rebuilt.
\nState management is not an ideological choice but a fiscal rationality.
\nIf the state can borrow at a cost of 8 percent, being dependent on financing at a cost of 14 percent is working at public expense.
\nA Public Infrastructure Fund should be established.
\nStrategic infrastructure revenues should not be made invisible.
\nIt should be collected in a transparent, auditable fund structure.
\nRevenues should be used to finance social policy.
\nNew projects should be financed by their own revenues.
\nIntergenerational fiscal balance must be maintained.
\nContracts should be publicly available.
\nRenegotiation mechanisms should be put in place in times of currency shocks and crises.
\nBecause in the constitutional order, it is the public interest, not the contract, that prevails.
\nThe outcome is clear.
\nInfrastructure size can be an indicator of development.
\nBut the income regime of infrastructure shows the character of the regime.
\nIf the risk remains public and the gain remains private;
\nif long-term revenue streams are traded for short-term budgetary comfort;
\nif public operating capacity is being deliberately weakened;
\nThere is not a technical but an ideological preference.
\nThis preference is a rent regime in name only.
\nThe nationalist Republican model is not romanticism.
\nThis model is fiscal sanity.
\nThis model is sovereignty.
\nThis model is the social state.
\nBridges can be concrete.
\nBut the income regime is political.
\nAnd politics determines whose side the state stands on.<\/p>","protected":false},"excerpt":{"rendered":"