For light rail transit (LRT) systems, turnkey procurement methods can offer cities more rapid construction, less risk, and assistance with financing the project. Turnkey arrangements are particularly useful for cities that lack an existing mass transit system with in-house expertise for developing LRT. Istanbul relied on the turnkey approach to construct a state-of-the-art, 24.2-km LRT system in two stages. The system was in operation within 30 months and a financing package was put together with the assistance of the governments of the countries involved in the project (Turkey, Sweden, and the United Kingdom) through the use of different export credit systems and by an international syndicate of some 16 banks. With the first stage of the system in operation, ridership has already reached 65,000 per day.

Before addressing the benefits of a turnkey system approach to light rail transit (LRT), some definitions are necessary. Socalled turnkey deliveries can be on several levels, depending on how much responsibility the operator would like to put on the contractors. Still, turnkey means the supply of a system, or parts of the system, ready for operation. One approach to turnkey systems is design/built. Design/built means that the operator or purchaser designs the system or parts of the system up to a certain point. After this initial design, contracts are awarded to one or several contractors who are responsible for the detailed design and supply. One of the contractors is also given the responsibility for the coordination of the total system. Turnkey means that the operator or purchaser gives one contract to one contractor based upon a performance specification for the total system (ie, more or less all the design work is carried out by the contractor). The contractor hands over the system ready for operation to the purchaser. The contractor could also be responsible for arranging financing for the total supply. Financing could be made on commercial or more favorable mixed credit terms. This kind of arrangement is sometimes called super turnkey. When financing is not available and when, in particular, commercial credit must be raised for the construction of a system, it can be beneficial for the purchaser to combine the turnkey approach with a complete supplier-arranged finance package. The reason is that private institutions will favor taking a risk when one reputable major company takes on the turnkey responsibility. The credit risk is deemed smaller when the system becomes operational within a short time period. Two other types of system supply definitions are in use: BOT (build, operate, transfer) and BOO (build, own, operate). In these cases the contractor has to take on both the design and construction of the total system, as well as the financing of the system. Financing in this case means that the