The need for modern and reliable transportation infrastructure is continuously increasing throughout the World. As public resources are limited, public-private partnership (PPP) model is frequently used in the realization of highway and bridge projects in Turkey. In PPP highway projects, the private partner assumes all costs associated with construction until the operation phase starts. Once the operational period begins, the revenues generated by the private partner should be sufficient to cover maintenance, repair and operating costs, to repay the debt service, and to provide the private partner an appropriate amount of profit. In this context, different types of payment mechanisms have been developed over time for the remuneration of private partners. In Turkish PPP highways, the main component of private sector revenues consists of actual toll payments obtained from highway users. However, these revenues generated by the 'real tolls' mechanism are rarely sufficient for the financial feasibility of projects, and thus in addition to tolls, 'minimum traffic guarantees' (MTGs) are also provided to the private sector. In recent decades, MTGs made during the operation phase have been the subject of intense criticism, as – in many cases- actual traffic demand has almost always been lower than forecasts. This problem regarding high amounts of guarantees has become more evident with the nationwide shutdowns imposed as a result of the emergence and spread of the Covid-19 virus and the transition to the remote working model. At this point, it is clear that there is a need for a comprehensive strategy for preventing and overcoming such problems in the development of similar projects in the future. In this context, it is expected that a better understanding of payment mechanisms and the evaluation of experiences will contribute to both the public and private sectors in shaping the projects to be designed in the future. This research explores the characteristics of alternative payment mechanisms including real tolls, shadow tolls, availability based payments and their variants in order to investigate into different ways of allocating traffic risks among public and private parties. Results reveal that each payment mechanism has its own advantages and disadvantages. Although the use of MTGs together with real tolls increases the ability of the private sector to repay its debts and thus incentivizes financial institutions to provide support for the project, it should not be considered as a solution for projects with low demand prospects. Thus, in feasibility studies, it is important to evaluate the demand for each project, and the revenues to be obtained from tolls in a realistic and transparent manner. Payment mechanism that will be used in a specific project could then be determined according to the outcomes of this evaluation and a thorough assessment of the advantages and disadvantages of each mechanism
