Creaking Tracks & Potholes

Turkey

Economic News

22 Jul 2010
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The Turkish railway authorities' hopes of beginning 2005 with a clean slate after last year's rail disasters proved short lived last week, with the derailment of a freight train just 200 metres from Ankara's mainline station. After coming under public scrutiny in July 2004 following the fatal derailment of the fast train connecting Istanbul and the capital, followed by a collision one-month later on the same track, Turkey's transport network is now coming under fresh scrutiny.



Initial findings suggest that the culprit last week was not Turkey's ageing rail tracks, but rather the train's brakes. This has served as little consolation though for the families of the two who died and three who were injured in the accident. It is still early days, with an investigation still under way into the reasons behind the derailment.



Whatever the final outcome, rail accidents do tend to open up the broader question of the condition of the Turkish republic's transport infrastructure. For a country that has the ambition of becoming a transport and shipping hub for the modern Mediterranean and Middle East, the Turkish Republic's transport infrastructure looks inadequate and often dangerous.



The situation is unlikely to improve in a hurry. Having promised the IMF and nervous foreign investors that it will maintain a primary budget surplus of 6.5%, Turkey finds itself with little spare cash to invest in roads, rail or the country's ports and customs points. The same painful truth applies to many areas of Turkish life, from hospitals to schools, but in few areas are the costs of a tight budget as immediately obvious as in transport infrastructure.



The World Bank says that Turkey's accident rates are three to six times above that of the EU. Every year around 3000 people die in accidents on Turkey's roads, down from around 6000 in the mid-1990s. That improvement is partly due to the money that has been spent, not on new roads, but on widening, lighting or resurfacing existing highways. Turkey has a little over 60,000 km of roads, a figure that has increased little for many years.



It is possible that as economic recovery gains speed, Turkey may find additional resources to spend on infrastructure improvements. A more likely scenario, however, is a continuation of what we see now: a few high-profile flagship projects largely funded by foreign loans will be touted as demonstrations of the ruling Justice and Development Party's (AKP) commitment to transport, while a series of less-exciting medium- and long-term plans for improvement are shelved.



This has political implications for the AKP. Recep Tayyip Erdogan's party swept to office in part at least on pledges to invest in road and rail, thereby saving lives as well as creating employment in regions that fell outside the growth centres in the west and centre of the country. Erdogan's pledges to build 15,000 km of new two-lane highways, however, look set to fall in the face of more the important undertakings to the IMF. Turkey, committed to paying down its huge domestic and foreign debt load, has no cash to spare for roads.



Erdogan was, however, determined to fulfil at least one pledge: a faster train link between Turkey's two main cities, Ankara and Istanbul. A Spanish credit of around 437m euros helped fund the improvements to the track between Ankara and the halfway town of Eskisehir. The journey time was cut to 4.5 hours from 7.5 hours as locomotives were allowed to travel faster on the newer, straighter tracks.



In July 2004, around a month after Erdogan himself launched the new service, a derailment killed almost 40 people, injured another 80 and deeply shook public confidence in the AKP's transport policy. An official inquiry looks set to lay the blame on the train drivers for exceeding speed limits, but the damage to AKP prestige has been done. Erdogan's government faced allegations that cost cutting and ambition were risking the lives of passengers.



Even before the accident brought promises to invest in new railway safety equipment, Turkey's railway authority found itself in the almost unprecedented position of having an increased investment budget for 2004. Its allocation rose from TL250 trillion ($168.5m) in 2003 to TL713 trillion ($520m) in 2004.



That rise, however, has more to do with the fast intercity link than an effort really to improve the entire country's rail access. Such sums can do little to ameliorate the consequences of decades of lack of investment in Turkey's rails, where average speeds still lumber along at around 55 km/h. A major priority in the early years of the republic, railways have been largely neglected ever since.



The AKP sees things differently and remains committed to providing a genuine high-speed link between Istanbul and Ankara as well as upgrading other lines. The rail authority is pressing ahead with improvements to a second stretch of the main Istanbul-Ankara line, as well as improvements to lines near Sivas.



But the real jewel in the crown of AKP rail investment is in Istanbul. For Turkey's biggest city, the government has managed to maintain funding for at a least one major infrastructure plan. Construction has started on the ambitious Marmaray tunnel linking the European and Asian shores of Istanbul, thanks to loans from Japan and the EU.



The project has been under discussion for the better part of 20 years but has gained real momentum under the AKP. The funding at least seems secure and while geology and the demands of archaeologists could delay work, a target for operations of 2009 seems realistic.



Where the government has been unable to provide infrastructure funding, local municipalities are taking up the baton in a number of cases. Light rail networks for city centres are proving a popular option for many local authorities.



Istanbul is investing some $800m in a light rail link for the Asian side of the city to tie into the Marmaray tunnel link, in addition to other light rail projects already underway on the European side of the Bosphorus.



The central Anatolian town of Kayseri, home constituency of Foreign Minister Abdullah Gul, is also borrowing from Italian and Scandinavian sources to help fund a 99m euro light rail line in the city.



The Turkish rail authority TCDD is due for a major shake-up. As well as being one of the heaviest loss-makers of the country's state-run enterprises, the TCDD's ornate system of accounting violates many EU rules and will have to be changed as part of Turkey's moves toward accession.



Additionally, the TCDD manages some of the country's largest ports, the income from which acts as a cross-subsidy for the rail network. As well as raising suspicions among freight and container firms that they are being overcharged to prop up the rail network, this practice is widely thought to violate EU subsidy laws and will have to end.



A few shining new examples notwithstanding, Turkey's roads are poorly maintained and extremely dangerous. According to the World Bank, it is the stretches of shining new hardtop - such as the 560 km Black Sea Coastal Road - that are the problem. Turkey, the bank says, places "excessive priority on large "political" projects at the expense of high return maintenance".



Whatever the problems, roads carry a huge proportion of Turkey's transport and look set to continue to do so. The road network bears a stunning 95% of passenger and 92% of goods transportation.



All is not lost though. With the economy continuing to grow and investors taking an increased interest in Turkey, the government can expect to be able to eventually loosen its purse strings as part of a more concerted effort to overhaul Turkey's transport infrastructure. But long-term prospects cannot remove the shorter-term strictures that the government faces under the IMF with its plans to join the EU.



Some time then before passengers can rest easy.

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