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Ultrahazardous activity liability in PPP models: efficient allocation of risk
(Ankara Üniversitesi Hukuk Fakültesi, 2017) Bayazıt, Bahar; Alper, Gizem
The development of Public-Private Partnership (PPP) models -which is an arrangement/set of contract that is concluded between the private sector company and the administrative authority in order to provide public servicesshift the risks to private sector, which is much more capable of bearing the risk of such activity, changes and blurs the types of responsibility of the public authorities. Which type of PPP models should be used in ultrahazardous activities is a problematic issue, since the acceptance of the new Turkish Code of Obligations a new rule have been established for ultrahazardous activity liability. The new rule has many gap holes, such as who should be responsible and which type of liability is it actually regulating, causing big financial institutes like PPP models to take under undetermined risks. Whether the private sector company or the administrative authority should undertake these risks is an issue that has yet to be determined. The question addressed in this paper is the following: how to allocate the risk of ultrahazardous activity liability between transaction parties (namely the administrative authority and the private sector company) in PPP models/contracts to favor efficiency?