TURKEY’s railway came to the fore during the industrial revolution in the 19th Century, and was the country’s primary mode of land transport as the winds of modernisation took hold, the Ottoman Empire gradually broke up, and the republic we know today was born.
However, the growth of road transport in the mid-20th century, with its enhanced door-to-door accessibility and added comfort meant that rail began to gradually lose its market share, competitiveness and dynamism.
In order to keep up with these changes and retain rail as a viable transport mode, the decision was taken to create competition within the railway sector, which would enable operators to compete more effectively with other transport modes. Restructuring has subsequently taken place in Turkey’s public rail bodies, primarily Turkish State Railways (TCDD) in recent years to prepare for this change and to offer a short-term increase in the sector’s share of the market.
This is most evident in the network modernisation and construction of new lines, which has taken place in recent years to great affect and continues across the country.
The steady restructuring of TCDD in the last few years is rooted both with consideration for the 160-year history of the company and Turkish railways, while following current European legislation, with a nod to the changes taking place on railways elsewhere in the world.
Discussions over the scope of these changes began in the 1990s. Subsequent analyses of studies prepared by various international consultants of how the restructuring process is initiated with respect to harmonisation with European legislation began in 2003.
The goal of the revisions is to allow third-party operators to offer services on the existing network using their own rolling stock. Thanks to the competition that will be created, it is envisaged that the level of service quality will increase, and with rail offering competitive prices, it will regain some market share from road.
As well as third-party operators, state-owned TCDD Tasimacilik has been formed to provide rail services and eventually to compete for operating contracts when they become available.
The company is structured into three work units: passenger and freight transport and rolling stock maintenance with deputy director generals appointed to coordinate the activities of each of these work units.
During the restructuring process, we have constantly exchanged information with European railways, primarily those based in Germany, Spain, Italy and Bulgaria, as well as others located in our region. We have also closely analysed similar liberalisation projects.
We found that coordination problems between infrastructure managers and train operators are common, which can result in increased costs and legal issues, thus impacting on safety.
In order to avoid the same problems in Turkey, a connection between infrastructure manager TCDD and our company has been established in the form of an affiliation.
We have also strived to maintain clear communication channels with civil society organisations such as trade unions and associations, primarily those active in railway transport. The staff and briefing meetings we have organised have emphasised inclusion, while we have encouraged the exchange of information and taken into consideration any feedback on the restructuring process that we have received.
All in all this new structure is designed to enable TCDD Tasimacilik to conduct its activities with greater consideration for profitability and efficiency. TCDD Tasimacilik will own the rolling stock used to operate its services and will also be responsible for procuring new trains, while TCDD will retain ownership of freight terminals and stations to ensure TCDD Tasimacilik does not have an unfair advantage.
Regulation of the liberalised rail market is overseen by the Directorate General of Railway Regulation (DDGM) under the Ministry of Transport, Maritime Affairs and Communications. The market is now open to competition. It is liberalised, and there no obstacle for train operators to make applications in accordance with the rules and procedures defined by DDGM.
In fact, competition on Turkey’s freight network was open to the private sector to carry freight using their own rolling stock and personnel long before the entry into force of laws liberalising railway transport. Indeed, the private sector share in freight transport is already higher than most European countries, with 35% of all wagons used in Turkey in 2016 owned by third parties, an increase from 33% in 2015 and 17% in 2010.
However, TCDD Tasimacilik is aiming to stimulate further growth. We have started to apply 10% and 20% discounts on the unit prices for export and import traffic between Turkey and European countries as well as for east-west transit traffic via Turkey.
For example, a 10% discount is now available on the unit price for export and import rail freight between Turkey and Iran and countries beyond Iran, or for east and west transit via Turkey. A 20% discount is also available on fees for transport between Tekirdag and Derince, and on Lake Van.
In addition, tariff regulations have been revised, while long-term transport protocols have been drafted in an effort to attract more freight to rail. And while TCDD Tasimacilik’s tariffs are usually defined according to market conditions, we now plan to do this more dynamically.
The price cuts are consistent with the goals of reforming the sector in the first five years post restructuring. Other objectives include decreasing operational losses, and improvements in personnel efficiency, as well as delivering improvements in fuel efficiency, and reducing maintenance costs.
Projects planned by infrastructure manager TCDD will go a long way to help us to realise our goals. They include introducing improvements on routes which are longer than their equivalent by road, and infrastructure enhancements to facilitate increases in average commercial speeds as well as construction of branch lines to ports, industrial areas, factories and mines, and offering better integration with other transport modes.
Similarly, new line construction projects are also set to dramatically improve the competitiveness of passenger operations. Work on urban rail projects such as the Baskentray and Marmaray schemes, along with the Ankara - Sivas, and Ankara - Izmir high-speed line projects, and Bursa - Osmaneli, and Konya - Karaman lines, which are all currently under construction, will increase the attractiveness and competitiveness of rail and help us to reach our performance targets.
Lines not deemed economically sustainable will be supported by the state through a Public Service Obligation with operation on these lines carried out under public service contract.
All in all, it is hoped that these infrastructure improvements, and our own administration changes, will enable the rail network to account for 10% of all of Turkey’s passenger transport by 2023, and 15% of all freight.
We believe the best way to achieve this, is to create a solid working structure where our employees, like a family, work in unison to achieve our joint goals and aims. To this end, we are attempting to enhance our communication channels with both our personnel and customers. We are also striving to improve efficiency by keeping the organisational structures simple and efficient.
This won’t be easy. But we believe that Turkey now has the organisational structure to match its ambitious construction programme, and will achieve these targets.