Turkish railways and EU

This country owes a great deal to the European Union membership bid process for the unprecedented transformation and modernization of Turkey’s railway industry and rail network over the last decade, even though Turkish government officials would not openly admit this when touting the success of government policies to the public. Notwithstanding the warning by Foreign Minister Ahmet Davutoğlu, who suggested on Sunday that Turkey and the EU could go their own separate ways if the 27-nation bloc refuses to unblock its path to entry, the fact remains that the EU process is still a significant factor in Turkey’s overhaul of its social, political and economic infrastructure.

If the EU were not there, we probably would not be enjoying a new rapid train line that was launched two weeks ago between the Anatolian cities of Eskişehir and Konya, the hometown of Davutoğlu. Over 9 million passengers have enjoyed fast train lines since the first track opened in March of 2009 between Ankara and Eskişehir, and later the Ankara-Konya line in 2011. Now, both lines are merged to cut travel time from five hours to just two hours between Eskişehir and Ankara, saving time and money for millions in Turkey. The country is planning to establish another 14 new routes within the next couple of years, according to the prime minister. I think this is a great example of how the EU process has become much more important in Turkey’s progress than the end result of full membership. That is why Turkey needs to push with full force for the process to carry on, albeit at a snail’s pace at times and despite the political obstacles set up by some member states.

Turkey had neglected railway development since the 1950s at the benefit of road transportation. However, attention turned to the sorry state of railways with the Action Plan for Railway Transportation for 2003-2008, which sought to modernize the state-owned Turkish State Railways (TCDD) and harmonize the relevant Turkish legislation on railway transportation with the EU acquis. This was the backbone of the TCDD’s modernization efforts, with the EU providing funds for safer and more efficient options for the transport of passengers and cargo and to integrate Turkish railways with the EU rail network. The EU provided 4.3 million euros to the TCDD between 2005 and 2007 while facilitating loans and grants for different projects. For example, a grant agreement for 120 million euros under the Instrument for Pre-Accession Assistance (IPA) scheme was allocated to the construction of the high-speed train line between Ankara and İstanbul, as were European Investment Bank loans totaling 850 million euros, plus a Spanish bilateral loan of 500 million euros for the railway sector.

This initial push from the EU served as a catalyst for Turkey to embark on a much more comprehensive overhaul of its railway industry and railway lines with the support of its own financial resources as well as non-EU loans and credits that the government has secured with other countries over the years. Turkey’s much-applauded medium-term program (OVP) sees major steps taken towards improving the transportation sector between 2013 and 2015, particularly the railroad sector and restructuring of the TCDD.

A bill submitted to Parliament last month envisages opening up Turkey’s state-controlled rail network to the private sector. If passed, the bill will allow private companies to build and operate railroads to carry freight and passengers, though the restructured TCDD will remain the owner of the lines. Most European nations took these steps in the 1990s, though Turkey is just planning to introduce this now, thanks to the EU. If the success of the liberalization of the air transport industry can be replicated in the railways system with this bill, then Turkey’s transportation industry will make a huge leap forward.

Since no government has much paid attention to the development of railways in the history of the republic, investment requirements for the upgrade of existing infrastructure and building of new lines are great. The government has spent TL 26 billion ($14.3 billion) in the last decade on modernization projects for the railway industry. We are still far from turning the TCDD into a profit-generating enterprise, not just because more money needs to be pumped into new projects but also because the revenue the TCDD generates is still a drop in the bucket of the overall budget the railway operator gets from the Treasury to keep its operations going.

In 2011, the TCDD earned TL 2.07 billion ($1.1 billion] from sales, making for a total loss of TL 733 million ($403 million). The Treasury transferred TL 4.8 billion ($2.7 billion) to the TCDD’s budget the same year. For 2013, the total budget earmarked for the TCDD is almost TL 4.7 billion ($2.6 billion). With additional funding from the Ministry of Transportation, their allotted budget reaches TL 8 billion ($4.4 billion). The total size of investments planned by the TCDD in the next decade is TL 45 billion ($24.7 billion). In 2013 alone, the TCDD plans to implement eight new projects at a total cost of TL 4.7 billion ($2.6 billion).

We have a long way to go in making railway transport an attractive option for travelers. The share of roadway transport in passenger travel makes up 97.8 percent in Turkey as of the end of 2011, excluding air transport. The railways accounted for the transport of only 1.6 percent of passengers that same year. The figure for the freight is 75 percent via roadways and 4.5 percent via railways. There is hope, however. Railways are expected to account for 15 percent of the country’s passenger travel and 20 percent of freight transport by 2023. This is not all that unrealistic considering how the high-speed rail lines have changed the preferred mode of transportation for passengers when there they are available. Data from two high-speed lines show these trains carried 9.43 million passengers between March 2009 and March 2013.

A high-speed line between Ankara and İstanbul is expected to begin service before the end of this year, cutting overland travel time between the two cities to three hours from five. It is expected that the share in passenger transport of railways in travel between Ankara and İstanbul will increase to 78 percent from a current 10 percent when this line starts up. The government plans to have 10,000 kilometers of high-speed tracks in operation by 2035 as the aim is to increase the use of railways for both cargo and passenger transport in the county. Another 56-kilometer railway link between the cities of Kocaeli and Gebze, located at heartland of Turkey’s industry, will take most of the shipping containers currently congesting the roads and put them on railways.

The Marmaray project, which is the construction of an undersea tunnel between the European and Asian shores of İstanbul and one of the biggest transportation infrastructure projects in the world, will feature a 76-kilometer railway system. It will turn Turkey into a major freight hub for railways as many containers of goods will be able to be transported between Western and Eastern markets via this link.

Improved, safe, fast train travel is also changing the habits of travelers in Turkey, boosting tourism and revitalizing local economies. For example, with the introduction of the high-speed link between Eskişehir and Ankara, tourism between the two cities increased 40 percent. All these investments have revitalized the local railway industry as well, with the building of locomotives, rails, train inspection stations and the wheel-axle assembly of railroad cars. Some are being exported to other countries. The Eskişehir-based Turkey’s Locomotive and Engine Industry Corporation (TÜLOMSAŞ), in partnership with General Electric, has been manufacturing high technology locomotives since 2011.

We have come a long way in overhauling Turkey’s archaic railway system. Just a decade ago, Turkey could not even improve its old train tracks, let alone built new ones. Today, it ranks eighth in the world and sixth in Europe in terms of high-speed train production and operations. This will develop further. For that development, the EU process needs to be appreciated for giving Turkey the necessary push. Policy makers in Ankara may feel they do not need the EU any more and feel confident enough that they can complete the transformation without the EU. Considering that most of the financing and technology still comes from the EU, I think it is premature to conclude that the EU has worn out its welcome in Turkey.

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