Turkey prioritizes railway transport to increase freight flows

Interview with Cavit Uğur, General Manager – Association of International Forwarding and Logistics Service Providers in Turkey (UTIKAD)

Turkey is one of the countries which struggle to deliver performing connections between Europe and Asia and to increase the freight flows in this region. Turkish authorities plan investments that would make Turkey rank among the first ten world economies by 2023. In this context, railway sector is one of the key strategic sectors that will boost economy and new opportunities and transport connections will secure performing links between the European and the Asian countries. Mr. Cavit Uğur, General Manager – Association of International Forwarding and Logistics Service Providers in Turkey (UTIKAD) talks about the railway development objectives of the authorities, the increase of the railway freight transport market share, the projects to be launched and the need to facilitate trade in an interview presented below.

Railway PRO: As Turkey’s objective in international trade is to reach USD 1.2 Trillion (compared to USD 375 Billion in 2011), what is the role of railway transport in this “national strategy”?
Cavit Uğur:  By 2023, Turkey wants to significantly move forward on the market of international commercial exchanges, USD 500 Billion being estimated on the export segment and USD 620 Billion for imports. Turkey aims to be one of the top 10 economies in the world by the year 2023 and the transportation sector is one of the key sectors in order to achieve this goal. Railway sector is the primary sector and the largest growth is targeted till 2023.  There are too much railway reforms in Turkey in order to increase productivity.
Turkish State Railways plans to invest USD 47.4 bn till 2023 and it is aimed to reach almost 10,000 km of high speed railway lines and construct almost 5,000 km of additional conventional railway lines. Turkish State Railways aims to build a total length of 15 thousand kilometres of railways and increase the overall total length to 27 thousand kilometres by the year 2023.
Turkish State Railways has a plan to establish 19 logistics villages at the significant industrial and commercial points of our country and aims to achieve 10 million ton cargo increase in railway transportation.
In addition to logistics villages investments, infrastructure (such as double railways) and freight transportation focused projects are underway.  Today railway transportation share is 4,5 percent and  the target is to increase railway transportation share to 20 percent by the year 2023.

Railway PRO: More and more companies choose to ship their freight on railways. In this case, not only the railway segment, but also logistics plays an important role. What level of financing has been reached for logistics projects and how could they answer to the development of transport connections between Europe and Asia, but also concerning domestic performances?
Cavit Uğur: There are lots of important railway projects which connect between Europe and Asia such as Marmaray, Kars-Tblisi-Baku and BALO. The ongoing investments of the railway sector are financed by the public funding. But BALO (Great Anatolian Logistics Organizations) company, which UTIKAD is the only shareholder from the logistics sector, was established by the private sector and organizations. BALO will organize block trains from Anatolia to Europe.

Railway PRO: What can you tell us about the liberalisation of the railway sector and what impact do you think it will have in Turkey’s transport system?
Cavit Uğur: By allowing more than one railway operator, it is aimed to ensure competition of railway sector within itself in fair and liberalized conditions. With the liberalization of railway sector, free and fair conditions will be ensured and more quality and safer railway services will be given to customers.
Railway train operation companies will get the opportunity to carry out freight and passenger transport with their own trains and personnel. Thus their transport costs, time and service quality will be controlled better by them.
Also railways will compete with other modes of transport, mainly road transport, and maintain this competitive power in a sustainable manner.
As a result of liberalisation, it is expected that the private sector also will invest in many different fields of the railway sector. This will enable Turkey to progress in railways expeditiously.

Railway PRO: How do national authorities involve in stimulating the development of the railway industry as vital factor for economic growth?
Cavit Uğur: Although Turkey’s railway infrastructure still faces problems, the state massively invests to improve the infrastructure for the increase of the railway traffic flow. For this purpose, 32% of the total state investments were directed to the logistics and transportation sector in 2012. As a result of this investment trend, the railway investments increased by 62% compared to 2011.

Railway PRO: Currently, Turkey deve-lops a series of important railway projects. What can you tell us about their impact over the connectivity relationships between Europe and Asia, as well as on increasing trade performance?
Cavit Uğur: The freight market between Asia and Europe is worth around $US 75bn and  Turkey’s geographical location makes it a natural bridge between the East to West and North to South axes, providing easy – cost efficient access to businesses around the world.
When the projects on the transport corridors such as Kars-Tblisi-Baku, Kurtalan-Nusaybin-Iraq, Kars-Nahcevan-Iran, Kavkaz-Samsun-Basra, Marmaray are finished, the connections to Europe, Middle East, Central Asia and China will be assured and transport share of Turkey will be increased. The Kars-Tbilisi-Baku railway, of which 40% is now completed, will also be opened at the end of 2013 and by 2015 it is expected the cross-Bosphorus Marmaray project in Istanbul will be fully operational.

Railway PRO: Regarding the TRACECA project, in March 2012 preparations started for a new project connecting Kazakhstan (from the Chinese border) with Turkey and the Black Sea region. It’s about the “Silk Wind” container block train from Kazakhstan to Turkey/Black Sea. What are the challenges in implementing this project and what do you think the role of Silk Wind is in the cross-border transport relationships in the region?
Cavit Uğur: The block train will provide direct connection from Kazakhstan to Turkey. Silk Wind Project is aimed to create the favorable conditions for a container block train route with advanced electronic exchange of information, simplification of customs and border-crossing procedures, reduction of transit time and travel time. Implementation of Silk Wind Container Block Train total length will be decreased approximately 1,000 km, travel time 4 days and spent at border entry points 9 hours.
The Silk Wind Block Train Services, as well as optimized functioning of Ro-Ro lines on Caspian Sea naturally respond to requirements of global supply chains and will form solid economic corridors between Asia and Europe.
There is a brand new development that a Memorandum of Understanding-MoU on the principles of joint activity on development of transport connections and organization of cargo transportation was signed between Turkey, Georgia, Azerbaijan and Kazakhstan in İzmir at the end of November. The signing parties announce with this MoU their intention to cooperate in establishment and promotion of multimodal route of intermodal transport train within the “Silk Wind” project, and organization of enabling environment by simplifying administrative and other relevant procedures in accordance with national legislation of the states of the Parties. Therefore, the Silk Wind project will overcome obstacles and challenges easily.

Railway PRO: What are the key factors which can contribute to improving the performance of rail transport on the Europe-Asia route?
Cavit Uğur: According to the trade facilitation approach, simplified custom procedures at the borders and reducing customs formalities are the key elements for improving rail transport on Europe-Asia route. The coordination of the present rail freight projects and creation new rail freight projects between Europe and Asia are other key factors.
Also rehabilitation of existing railway lines, modernization of rolling stock and infrastructure, improvement of block train routes and expansion of high-speed rail contribute to improving rail performance.
Turkey is already renewing the railway lines between Istanbul and Europe in order to increase the performance of rail transport with Europe.

[ by Pamela Luică ]
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