Growth across the board in the Turkish economy has cast light on new segments of the transportation sector, drawing attention to the country’s railway and sea links and opening up new air destinations domestically and abroad.
In 2012, the national budget devoted approximately TL9 billion toward transportation projects, with an additional TL21 billion being injected into the sector through private sources and related ministries. Minister Binali Yıldırım specified that the Ministry of Transport, Maritime Affairs, and Communications had “allocated 52% of the budget to investments, and the existing projects will continue apace.”
Specific projects on the horizon also include the expansion of airports and sea ports, as well as special attention the rail and road networks that connect the major shipping hubs of the country. Meanwhile, private and international actors are seeking to open up new travel routes by air to cater to larger numbers of business and leisure arrivals, as well as the growing domestic demand for travel.
Turkey enjoys bilateral agreements with 122 countries, triggering increased activity in Turkish airspace. To achieve the ideal set by Prime Minister Erdoğan that “every Turk should be on a plane at least once,” the Ministry’s opening up of aviation to the private sector in 2003 has led to increased passenger volumes and a growing number of destinations on the map. Turkey now boasts the fastest-growing domestic air transportation market in Europe.
The government is spearheading growth in the sector by initiating new transportation agreements with 10 countries in 2012. In
parallel, older contracts are being renewed and new airports are being built to accommodate more passengers and flights. “In 2012, we expect to open the Milas-Bodrum Airport International Flights Terminal, the State Aircraft Hangar and Foreign Dignitaries Mansion, the Van-Ferit-Melen Airport Annex, the Kars Airport Domestic and International Terminal, the Ağrı Airport Terminal, and the Kastamonu Airport,” said Minister Yıldırım to TBY. Coupled with modernized infrastructure, new air transportation facilities with better security and services will continue to attract a wider range of domestic and international passengers.
Through private partnerships and increasing foreign involvement, the authorities aim to establish Turkey as a hub not only for transit, but also for aircraft maintenance, repair, and training. New investments will be sparked by the expected growth in the sector, as estimates for growth are as high as 10% annually, and the existing fleet will be expanded to 750 aircraft. As the Minister for Transport, Maritime Affairs, and Communications works toward signing agreements with all 190 fellow members of the International Civil Aviation Organization (ICAO), the government will also seek support as it augments its services and fleet.
With the lion’s share of the market, Turkish Airlines (THY) employs over 29,000 people to maintain its fleet. In 2012, the company is aiming to launch 24 new routes and grow by 20%, supported by investments of $750 million. According to Hamdi Topçu, Chairman of THY, the airline “seeks to serve all three kinds of passengers: tourists, business people, and transit passengers. We find that there is a large number of transit passengers from South America to various points in Asia and the Middle East, most of which used to transfer in Europe.” In this way, new waves of passengers from destinations further afield are expected to pass through Turkey in the coming years.
Air France KLM is one international operator also benefitting from Turkey as an air transportation hub. Linked to Istanbul for over 80 years, the airline’s history in the country has contributed to its favorable image in the local market. Through its partnership with Delta Airlines, the company served more than 13 million passengers in 2011. “Our partnership allows us to offer more flights to more destinations than any other airline operating out of Turkey, and we continue to focus on our airport services,” Paul Terstegge, General Manager for Turkey, Greece, and Cyprus of Air France KLM, told TBY.
Ambitious projects in road and rail infrastructure dominate the discussion of land transport in Turkey in 2012, with ongoing projects and new initiatives expected to take off later in the year. Major parts of the revamping of the rail system are due for completion in 2014. In 2012, the Ministry plans to build 1,133 kilometers of public roads, a 290-kilometer highway, and 140 bridges.
One of the most significant projects to be launched in 2012 is that of the long-awaited third Bosphorus bridge, designed to alleviate traffic crossing Istanbul’s major strait. Although specifications necessary for the construction of the bridge deterred private companies from bidding, the tender for the project has been split into two parts, one of which will be covered by the government. Minister Yıldırm explained that the authorities have “opened a new tender on 65 kilometers of the bridge and the connecting roads, set to begin construction in 2012. We expect this part of the project to cost around $2.5 billion.” The second section of the project is a 360-kilometer highway tender.
In the state-owned railway sector, several projects in the pipeline are expected to continue in 2012: the Eskişehir Gar Geçişi and İnönü-Gebze sections of the Ankara-Istanbul high-speed train, the Yerköy-Sivas section of the Ankara-Sivas line, and the Ankara-Bursa, Ankara-Izmir, and Sivas-Erzincan high-speed lines. In total, the government intends to undertake 900 kilometers of railway repairs, as well as modernize and produce 537 freight carriages, in efforts to better integrate the sea-land transportation network.
Set for completion in 2012, the Baku-Tbilisi-Kars (BTK) railroad could carry up to 1.5 million passengers and 3 million tons of cargo across three countries on an annual basis. International projects such as this are considered to be instrumental to the Turkish economy as the country connects East to West.
Turkish State Railways (TCDD) is seeking to complete the Marmaray project by October 2013, an initiative that will connect Europe and Asia below the Bosphorus by rail. “The Marmaray has a 100-year design background, and trains will run at 90-second intervals,” Süleyman Karaman, Director General & Chairman of the Board at the TCDD, told TBY. “At 55 meters below sea level, it will be the world’s deepest rail and underground station.”
As maritime trade becomes increasingly important for the world’s economy, Turkey strives to utilize its coastlines by expanding ports and connecting them to a larger transportation network. Currently, 88% of foreign trade is carried out by sea in Turkey, a figure that is set to expand in the coming years, as the Ministry of Transportation seeks to increase total handling capacity to 23 million TEUs by 2015. This goal will contribute to the creation of 30,000 new jobs in the maritime transport sector, as will growing shipbuilding capacity and the ability to handle larger vessels.
Large facilities in Turkey enjoy fairly balanced operations between exports and imports, with a diverse cargo mix that serves both the Marmara and Black seas. However, in the hinterland of the country, the appropriate infrastructure needs to be developed with further investment to better serve increasing goods volumes. Sean R. Pierce, CEO of Yılport, emphasized to TBY that both government and private sector players should take advantage of opportunities to “ensure that supporting logistics infrastructure grows and we increase the overall velocity with which cargo will move, not just through these privatized ports, but through the entire logistics chain.”
The main shipping companies already active in the sector can also play a role in attracting more investments and trade to the country, as Süha Aktaş, Chairman of the Board at Gemport, noted to TBY. “There will be more opportunities, especially with a company such as Maersk MSC, the largest shipping line in Turkey, which is constructing a transit container port in Tekirdağ.” Moves such as these are expected to draw increased attention to Turkey as a prime worldwide shipping hub, bring about job creation, and join together inland areas and coastal ports.
© The Business Year