Turkey covers 780,580 square kilometers, with 97% of its area occupying Anatolia, and the remaining 3% situated on the European continent. Its unique position as a commercial center between Asia and Europe yielded it a foreign trade volume of close to $300 billion in 2010. To support Turkey’s growing role as a regional transport hub, the government has invested $41 billion in transport projects since it came to power in 2002. There are also plans to invest another $100 billion in further projects over the next 12 years, in time for the Turkish Republic’s centenary in 2023. According to TurkStat, in the first nine months of 2010, transport, storage, and communications accounted for 14.5% of total GDP, making the sector the second most valuable contributor to the economy after manufacturing.
The Ministry of Transport and Communications is tasked with developing Turkey’s transportation network. A number of mega-projects are currently in planning or underway, including the development of major highways to connect Istanbul to Izmir, and Ankara to Niğde, better linking the capital to southern Anatolia. Railroads, which have traditionally been neglected in favor of highways, are also being developed and extended, including lines connecting major towns in central and western Anatolia, in addition to a high-speed train line to connect Istanbul to Ankara. The anticipated conclusion of the Marmaray Project, an underwater rail line currently being constructed beneath the Bosphorus Strait in Istanbul, will become one of the most important rail connections between the continents of Asia and Europe. Further projects to link Turkey to its neighbors include the Kars-Tbilisi-Baku railway, set for completion in 2012, and the strengthening of Turkey’s ports through continued privatization and upgrading.
ROADS & HIGHWAYS
The General Directorate of Highways (KGM) is the state agency in charge of the construction and maintenance of all public roadways outside of the main population centers in Turkey, and is a division of the Ministry of Transport and Communications. KGM currently maintains a road network of 352,046 kilometers, including related bridges, viaducts, and tunnels. The initial allocated budget for the department in 2010 was close to TL5 billion, demonstrating the significance attached to Turkey’s road network. Turkey lies on the old Silk Road network, which is now plied by trucks. Approximately 90% of commerce with Europe by weight is carried by truck, and this method has historically been cheaper than air and sea freight. The country has one of the largest land transportation fleets in Europe, and according to the Investment Support and Promotion Agency of Turkey (ISPAT) there are close to 1,500 companies engaged in international transportation.
The Turkish highway network is to get a major boost in the form of the Istanbul-Izmir highway project. Totaling $11 billion worth of investment, the project will see the construction of the world’s second-longest suspension bridge, and will reduce travel times between the two centers by over half. The government is also expected to hold a tender for the construction of a highway connecting Ankara to Niğde, with the aim of connecting the Istanbul-Ankara highway to the Adana-Mersin highway.
Turkey is also a vital part of the Trans-European Motorway (TEM) network, with route E80 linking 10 countries with an approximate length of 5,700 kilometers, a large part of which passes through Istanbul to Erzurum in the east, and then on to the Iranian border. Further expansions to this network are planned to connect the south of Turkey with its eastern border. The profitability of Turkey’s highways will be boosted in 2011 with the anticipated privatization of 2,000 kilometers of roads as well as the existing two bridges spanning the Bosphorus
The Turkish railway network is currently undergoing expansion, after having being largely neglected since the late 1930s. There are 8,717 kilometers of rail line operational, 2,274 kilometers of which is electrified. Total daily capacity is in excess of 100,000 passengers and over 700,000 tons in freight. Turkish State Railways (TCDD) is in charge of the network, which is connected to the major ports, including Istanbul, Izmit, Samsun, Bandırma, Izmir, Mersin, and Iskenderun. A major international project is underway in the form of the Kars-Tbilisi-Baku railway, which is due for completion in 2012 and is aimed at improving the economic relationship between the three countries and increasing trade levels. Its capacity will eventually reach 3 million passengers and over 15 million tons of freight annually. Further high-speed train projects are also underway or being planned, and will see Istanbul connected to Ankara, with part of the line, connecting Ankara to the city of Eskişehir, already complete and operational. Upon the completion of this line, the high-speed network is to be expanded from Edirne to Kars, and Ankara to Izmir. Another project currently underway to connect Ankara to Antalya is the Ankara-Konya high-speed train project. There are further plans to then extend the network from Konya to Adana and Mersin.
The Marmaray is arguably the most ambitious of all Turkish transport projects to date. Envisaged over 150 years ago by Sultan Abdul Mecid, the Ottoman dream of linking the two parts of Istanbul underwater is finally being realized. Delayed due to archeological discoveries, the tunnel is expected to finally open in 2013, and it is estimated that it will save commuters some 13 million hours over its first year in operation. It will also provide the first underwater rail link between Europe and Asia, and when integrated into the overall network, allow rail travel from Turkey’s western border to its eastern border with Iran, Georgia, and beyond.
Turkey’s geographic location can be partly credited for increased air passenger levels, yet the country’s growing tourism industry is another driver for the air transport industry. Gulf Air’s General Manager in Turkey reinforced this idea, telling TBY that “Istanbul is becoming increasingly important both as a destination and as a transit hub in the region.”
There are 45 airports in Turkey, 16 of which serve international flights. Due to increasing passenger levels, the country has privatized most main terminals, including Istanbul Atatürk, the largest of Turkey’s airports, which had a passenger traffic level of 32 million in 2010, making it Europe’s eighth busiest airport. The General Directorate of State Airports Authority (SAA) has been utilizing a Build-Operate-Transfer (BOT) model in its privatization drive since 1993, lessening the burden on the state to upgrade terminals to cope with bulging passenger numbers. One such private sector winner in this drive has been TAV Airports, an Istanbul-based international holding company that has become a leader in the sector, operating 10 airports in Turkey, Georgia, Tunisia, and Macedonia, and hosting 42 million passengers at its Turkish terminals in 2009.
Air cargo is also a big deal, with many major cargo airlines such as Lufthansa Cargo, ACT Airlines, and Turkish Airlines Cargo using Istanbul as a point of transit to carry to destinations across the world. Istanbul currently has two airports, and the larger of the two, Istanbul Atatürk, handled over 947,000 tons of cargo, freight, and mail in 2010. The second airport, Sabiha Gökçen International, opened in 2001 and has a yearly cargo capacity of 90,000 tons. Despite impressive figures in cargo and passenger handling, Istanbul still faces capacity issues, and plans are currently being drawn up for a third airport. In March 2011, Orhan Birdal, the head of the SAA and a board member of Turkish Airlines, said its location was still under consideration, but that it would possess an annual passenger capacity of between 80 million and 100 million. He also underlined plans to continue developing landing capacity at Istanbul Atatürk, which saw a 25% rise in 2010, until the new airport is built. In addition to the main Istanbul air hub, there are several other major airports worth noting, including Ankara’s Esenboğa, which ranks second in the country in terms of domestic traffic, and the Dalaman, Milas-Bodrum, and Antalya airports in the south, which see heavy domestic and international traffic, especially during the tourist season.
The outstanding growth of Turkish Airlines also continues, with the company posting revenues of $4 billion in 2009. With 15,000 employees, Turkish Airlines has the honor of being Europe’s fastest growing airline, and is gaining worldwide recognition as an official sponsor of the Barcelona and Manchester United football clubs. The development of the sector is also being helped by the rise of other international low-cost carriers based in Turkey, including Pegasus Airlines, Anadolujet, Onur Air, and SunExpress. Sabiha Gökçen has become a hub for such low-cost carriers, and in 2010 the airport was honored at the World Low Cost Airlines Congress in London.
SEA & PORTS
Turkey’s coastline stretches for 8,333 kilometers, spanning four major bodies of water:
the Black, the Mediterranean, the Aegean, and the Marmara seas. Maritime is one of the most preferred methods of transportation for Turkish exports and imports, with a total 46% of exports and 59.1% of imports passing through Turkey’s ports. There are 174 ports in the country, and 122 are operated by the private sector. The total capacity of Turkey’s ports is 5.5 million twenty-foot equivalent units (TEUs), with plans to increase this to 20 million TEUs by 2020. Finance Minister Mehmet Şimşek has stated that the development of Turkey’s ports is essential if the country is to meet growing trade needs. In mid-2010, as part of the government’s privatization drive, the rights to operate Samsun port for 36 years were transferred to Cey Group for $125.2 million, and Iskenderun port was privatized in a similar deal in September 2010. Further public tenders are expected, including for Izmir Port, which the government has been trying to privatize in recent years.
The ports of Istanbul are the largest maritime facilities in the region, handling 6 million tons of cargo every year. Izmir Port, however, is the biggest port in terms of the quantities of different cargoes handled, and the port has historically been likened to Rotterdam due to the Tüpraş refinery and the number of chemical plants in the area. Other major ports include Trabzon, on the Black Sea coast, and Mersin, on the Mediterranean. Ceyhan, also on the Mediterranean coast, is showing its potential as a major port in the oil industry, on the end of two major pipelines: the Baku-Tbilisi-Ceyhan, and the Kirkuk-Ceyhan lines. Port development opportunities are numerous, with three main projects being named as priorities: Çandarlı, near Izmir; Mersin, on the southern Mediterranean coast; and Filyos, near the Black Sea town of Zonguldak. Çandarlı Port has a tentative investment value of €185 million, and will support Izmir Port’s capacity. The Mersin Container Port project has an initial investment value of €370 million, and will serve countries in the Middle East and CIS. Finally, the Filyos Port project will total €500 million and is expected to ease pressure on Istanbul. These new ports are expected to be tendered soon under the BOT system and are a part of the Trans-European-Network (TEN-T). The development of the Mersin and Çandarlı ports will be assisted by loans from an EU public
© The Business Year