Railways Sector in Turkey

An Expert's View about Passenger Rail Transport in Turkey

Posted on: 6 Oct 2010

Turkish Railways Authority is about to start a new era in the Railway Transportation sector in Turkey in 2010. The opportunities exist for the British Railways Sector.

Railways ? Turkey Sector Report Railways Turkey Produced by: Taylan Atakan, Senior Trade & Investment Officer, British Embassy Ankara March 2010 Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Enterprise & Regulatory Reform, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published January 2010 by UK Trade & Investment. Crown Copyright © www.uktradeinvest.gov.uk 1/10 Railways ? Turkey Table of Contents OVERVIEW 3 OPPORTUNITIES 4 CHARACTERISTICS OF MARKET 6 KEY METHODS OF DOING BUSINESS 7 MORE DETAILED SECTOR REPORTS 8 EVENTS ERROR! BOOKMARK NOT DEFINED. CONTACT LISTS 10 www.uktradeinvest.gov.uk 2/10 Railways ? Turkey OVERVIEW The 154 Years History of Railways in Turkey o 1856: First Railway Construction (IZMIR-AYDIN by the Aegean) o 1924: Railways Nationalized. Directorate General of Anatolia-Baghdad (4.000km.) o 1927: Ports affiliated to Railways. General Directorate of Ports and Railways, TCDD (5.500 km.) o 1984:Transformed into State Economic Organization o 2007:EU and WB Projects Started for Restructuring of TCDD Characteristics of Railways Network in Turkey To-Day o 10.991 km rail network, o Predominantly single-track (95 %) o Characterised by mountainous terrain, tight curves and steep gradients, o 69 % is with concrete sleepers, o 21 % is electrified at 25kv, 50Hz. o 28 % is signalled TCDD, Turkish State Railways www.tcdd.gov.tr General Directorate Turkish State Railways, based in Ankara, is the government agency which has custody over all the inter-city and inter-country railways networks in Turkey operating under The Ministry of www.uktradeinvest.gov.uk 3/10 Railways ? Turkey Transport www.ubak.gov.tr Tasks; o To construct, repair, enhance, renew and operate the infrastructure of both railways and ports granted to itself by the Government, o To Carry out all kinds of complementary activities regarding rail transport (maritime and land transport including ferry operations) o To Manufacture rolling stocks and similar vehicles o To operate Passenger and Freight Trains on its Infrastructure OPPORTUNITIES GBP 1BILLION+ BUDGET FOR RAILWAY INVESTMENTS IN TURKEY IN 2010 The Turkish Consolidated Sate Budget has granted the TCDD the biggest allocation in the Public Sector. TCDD will finance TL 1.6 billion (GBP666m) of its total investment of TL 2.5 billion (GBP1.1b) to be made in 2010 from own sources and TL 909 million (GBP379m) will be covered with foreign credits to be obtained from various international financing agencies. Of the foreign financing, TL 761 million (GBP319m) will be made available to TCDD on Council of Ministers decision as the allocation of no return assumed by the Treasury as debtor and TL 137 million (GBP57m) as the foreign credit to be obtained from the World Bank and other similar agencies. TCDD General Directorate, Turkish Railways Authority is about to start a new era in the Railway Transportation sector in Turkey in 2010. Railway investments has preceded the highway investments for the first time in the history of Republic of Turkey by TL 2.5 billion,(GBP 1,000m+) central government budget allocation. TCDD which has demanded an allocation of TL 1.5 billion for Ankara-?stanbul High Speed Train Project to cost TL 5.2 billion, in 2010 and has been made an allocation of TL 637 million, might increase the amount of allocations within the year on the basis of remuneration reports has to obtain financing in return to the allocations made for making the investments on time. According to the work conducted by TCDD General Directorate to this effect, of the investment of TL 2.5 billion to be made in 2010, TL 1.6 billion is envisaged to be financed from the own sources and remaining TL909 million with the foreign credits to be obtained from various international financing agencies. The relevant sources note that TL 1.6 billion corresponding to 65% of the allocation made in 2010 will be covered by the own resources within the year, part of which will be obtained from the Central Bank and part of which through capital increase of the entity by the Treasury, and the revenues to be obtained through sale of immovable of the entity will be used as well. Credits Allocated Financing Amount in 2010 (TL)?000 by Sovereign Guarantee Projects (GBP1=TL2.4) - Spanish Government Credit 10 Set High Speed Train 68,750 www.uktradeinvest.gov.uk 4/10 Railways ? Turkey nd - EIB Credit Ankara-Istanbul High Speed Train (2 Stage) 87,500 nd - Chinese Eximbank Credit Ankara-Istanbul High Speed Train (2 Stage) 87,500 nd - EIB Credit Ankara-Istanbul High Speed Train (2 Stage) 87,500 nd - Chinese Eximbank Credit Ankara-Istanbul High Speed Train (2 Stage) 87,500 - Korean Eximbank Credit Electrical Commuter Train 19,658 - Japan Eximbank Credit Electrical Commuter Train 19,657 rd - EIB Credit Ankara-Istanbul High Speed Train (3 Stage) 8,038 - EIB Credit Ankara-Istanbul High Speed Train Consultancy 2,000 - EIB Credit Ankara-Istanbul High Speed Train Depot 15,071 - EIB Credit Track Mechanization (IV) 19,140 Priority Given to Speed Train Networks Opportunities exist for the British Railways Sector in the following; o Investors and consultants; o Suburban train system specialists; o Metro system specialists o Rail equipment suppliers; www.uktradeinvest.gov.uk 5/10 Railways ? Turkey o Security and signalling specialists; Marmaray Project One of Europe?s biggest transportation project awarded to the Japanese Marubeni Corp., Taisei and Gama Endüstri, Consortium and supported by a financial package of; $ 3,200 Million ($980 Million of Japanese JBIC loan, ?650 Million of EIB loan. ? 400 Million EIB loan for procurement of vehicles. ? 300 Million is awaited from the Council of Europe Development Bank) offers many subcontracting opportunities. Marmaray Projects has three main components; 1. Railway Tube Crossing $1,146m (JBIC Loan) 2. Improvement of Gebze-Haydarpa?a and Sirkeci-Halkal? Commuter Lines Euro 650m(EIB Loan) 3. Procurement of Towing and Towed Vehicles (Procurement of 440 vehicles) Euro 585 Million For more detailed information about the Marmaray Project please visit; http://www.tcdd.gov.tr/tcdding/marmaray_ing.htm CHARACTERISTICS OF MARKET White Paper on Restructuring of the TCDD and the Railways Sector Technical studies on the draft laws are continuing on by Ministry of Transport in cooperation with relevant public institutions and non-governmental organisations (NGOs).The Transport Sector Rehabilitation Law is expected to come into force by the first half of 2010. o The prevalent monopoly of rail freight and passenger transport enjoyed by TCDD will end o Railway infrastructure will be opened up for transport of goods and passengers o TCDD will be re-organised o New infrastructure construction and rehabilitation investments will be financed by the State o Non-commercial passenger transport will be supported by the State o Accounts of infrastructure, freight transport, passenger transport, PSO and state aids will be kept separately o Necessary Bodies and Authorities will be set up www.uktradeinvest.gov.uk 6/10 Railways ? Turkey Major Priorities in Transport Sector adopted by the Turkish Government: o Establishing balance between transport modes o Strengthening combined transport system in compliance with International legislations o Giving priority particularly to railway and maritime transports o Considering all modes a part of combined transport o Developing modes as complementary to each other as possible Inner City Metro and Light Rail It should be noted that the municipal railway systems have been attracting more investments in recent years. Besides the projects which are being materialized by 13 Metropolitan Municipalities, namely; Istanbul, Ankara, Izmir, Adana, Konya, Antalya, Eskisehir, and Bursa, in order to extend light rail networks, Kocaeli, Trabzon, Isparta, Kayseri, and Samsun also have planned projects for urban transit systems. Projects in Municipal Railway Transportation; City Projects Status Istanbul 9 lines ongoing 7 lines to be tendered Izmir 1 line ongoing Ankara 3 lines ongoing Samsun 1 line to be tendered Bursa 1 line to be tendered Kocaeli 1 line plan is not finalized yet Trabzon 1 line Project under review Gaziantep 1 line plan is not finalized yet Kayseri 1 line ongoing Mersin 1 line Project under review Antalya 1 line plan is not finalized yet Adana 1 line ongoing Konya 1 line to be tendered KEY METHODS OF DOING BUSINESS For more detailed information about Turkey on; o Customs and Regulations o Contacts and Setting Up o Selling and Communications www.uktradeinvest.gov.uk 7/10 Railways ? Turkey o Background and Geography o Visiting and Social Please visit; https://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/countries?_nfls=false&_nf pb=true&_pageLabel=CountryType1&navigationPageId=/turkey There are a number of different forms of doing business/co-operation that are common in Turkey: o Under licence agreements o Joint venture partnerships o Local distributors o Participation in public tenders Public Tenders are conducted in accordance with the Public Procurement Laws 4737 and 4964 which came into force on 05 January 2002 and 30 July 2003 respectively. All government institutions, local governments, public services, state-owned companies, certain utility companies and foundations managing public finances are obliged to follow the Public Procurement Act rules when purchasing goods and services. They have to announce their requirements through public tenders as well as international competitive tenders if deemed necessary. However there are cases when they can either draw a short list or award contracts directly provided that they justify the technical requirement to by-pass the Public Procurement Laws. Should you be interested in more in-depth, tailored information and/or contacts in the Turkey Railways Sector, you should contact: Taylan Atakan Senior Trade & Investment Manager British Embassy, Ankara T: +90 312 455 3243 F: +90 312 455 3351 Taylan.Atakan@fco.gov.uk www.ukinturkey.fco.gov.uk MORE DETAILED SECTOR REPORTS Research is critical market research when considering new markets. UKTI provides market research services which can help UK companies doing business overseas including: o Overseas Market Introduction Service (OMIS). Bespoke research into potential markets, and support during your visits overseas o Export Marketing Research Scheme. In-depth and subsidised service administered by the British chambers of Commerce on behalf of UKTI www.uktradeinvest.gov.uk 8/10 Railways ? Turkey Contact your local International Trade Advisor if you are interested in accessing these services, or for general advice in developing your export strategy. International Trade Advisor UKTI?s International Trade Advisers can provide you with essential and impartial advice on all aspects of international trade. Every UK region also has dedicated sector specialists who can provide advice tailored to your industry. You can trace your nearest advisor by entering your postcode into the Local Office Database on the homepage of our website. For new and inexperienced exporters, our Passport to Export process will take you through the mechanics of exporting. An International Trade Adviser will provide professional advice on a range of services, including financial subsidies, export documentation, contacts in overseas markets, overseas visits, translating marketing material, e-commerce, subsidised export training and market research. When considering doing business in Turkey it is essential to obtain legal, financial and taxation advice. A useful contact list of lawyers and other relevant professional bodies, as well as further information is available from the British Embassy in Turkey. The British Embassy Commercial Section in Turkey offers a range of services to British-based companies wishing to do business in the Turkish market. Our services include the provision of market information, validated lists of agents/distributors, key market players or potential customers in the Turkish market; establishing the interest of such contacts in working with you; and arranging appointments. We can also organise seminars or other events for you to meet contacts or promote your association/company. You might also like to note that all information about UKTI/British Embassy commercial events and trade missions in Turkey is published on the UKTI website and the Embassy website www.ukinturkey.fco.gov.uk we also post on the UKTI website information about specific business opportunities in Turkey. As a UK-based company, we encourage you to register on the UKTI website. This will allow you to set up your user profile to ensure that you receive automatic updates about opportunities in your sector in markets of interest to you. This service is free of charge. The website also has a great deal of background information on priority business sectors in Turkey and on doing business here. You might also be interested to find out more about the range of services available to UK companies trading internationally through the UK Trade & Investment International Trade Team in England, or through the Devolved Administrations in Scotland, Wales and Northern Ireland. You can find details of your local office on the same website by clicking on ?Local Office Database? on the homepage. EVENTS TRADE FAIRS IN TURKEY 2008/09 The Union of Chambers and Commodity Exchanges of Turkey www.tobb.org.tr/fuar/eng/ provides details of trade shows/fairs/exhibitions over 140 main and sub sectors under the headings; o Fairs According to Sectors o Fairs According to Cities o Fairs According to Dates o Fairs Organizing Companies o Fairs Search www.uktradeinvest.gov.uk 9/10 Railways ? Turkey UK Trade & Investment?s Tradeshow Access Programme (TAP) can help eligible UK businesses take part in overseas exhibitions. Attendance at TAP events offers significant benefits: o possibilities for business opportunities both at the show and in the future o a chance to assess new markets and develop useful contacts o grants are available if you meet the criteria o UKTI staff overseas will be available to assist delegates Find out if you are eligible to apply to attend for events and more about the support UKTI can offer, on the UKTI Market Entry web page. Details of TAP events can be found in the Events portal on the Turkey page. Other Market Visit Support may be available via your local International Trade Advisor. CONTACT LISTS UKTI Rail Sector Team Derek Griffiths International Sectors Group UK Trade & Investment Kingsgate House 66-74 Victoria Street London SW1E 6SW Direct Tel: +44 (0)20 7215 4773 Email: Derek.Griffiths@ukti.gsi.gov.uk Website: www.uktradeinvest.gov.uk British Embassy Ankara Taylan Atakan Senior Trade & Investment Manager British Embassy, Ankara T: +90 312 455 3243 F: +90 312 455 3351 Taylan.Atakan@fco.gov.uk www.ukinturkey.fco.gov.uk www.uktradeinvest.gov.uk 10/10
Posted: 06 October 2010