In the first part, we concluded that the reducing expenses will not be sufficient enough to have a sustainable balance. What else? Is it possible to have a massive increase in income?
It’s obvious that railways cannot increase the rates while there’s heavy competition with other modes unless there’s a big change in service quailty like high speed trains.
Let’s start with the penetration of market. TCDD has a share of 4% in freight, and less than 2% in public transport. Iran, which has a similar rank in Global Competition Index (GCI) in railways and heavier competition by trucks has a share of 11%. Serbian Railways, having worse rank in GCI, has a share of 30%. This means, although we have a considerable rail network, we are using it very lightly.
If the market stays so far away from railway, is it possible to change this situation fastly? Yes, we already experienced this in Turkey. The share of railway reaches to over 70% in a very short time on Eskisehir-Ankara and Ankara-Konya routes after high speed train service.
But what about capacity usage? Maybe we are already using the full capacity, and need huge investment to add capacity? Let’s see figures of German Railways. Germany has 4 times longer railway network, where carries 15 times of freight and 60 times of passenger. And it’s profitable.
Another example is China. Railways become a strategic product for Chinese Government, and they use the railway very densely. The rail network is 7 times longer in China, where passenger on rail is 30 times, and freight is 100 times of Turkish Railways.
What if the increase in rail service does not end up with less loss, but more? Let’s see an example from Turkey and compare suburban services (Izban, Marmaray & Ankara) with a frequency up to every 10 minutes with the mainline passenger servces with 2-4 services per day.
Earnings/Expenses of Main Line, Suburban and Izban Trains in 2014 (mn TL)
|TCDD Main Line Passenger Trains||194||1.069||18%|
|TCDD Suburban Service (Marmaray and Ankara)||70||129||55%|
|Izban (Izmir Suburban Service)||69,4||97,5||71%|
As the bus service is completely redesigned based on Izban and Metro, there’s a fast increase in demand for Izban and metro. Thus, there’s a plan to increase the frequency of trains up to every 2 minutes. Marmaray already reaches to that frequency in peak times after becoming the main urban transport solution to cross Bosphorus.
In the freight side, TCDD is getting prepared to change its single tariff for every load to new tariff encouraging frequent and efficient transports.
As the last sentence, we always talk about the loss in railways, but never care about roads. Roads are also “supported” by Goverment. In other words, they are making loss too. Below is the table showing earnings and expenses of General Directorate of Highways (KGM) responsible of all state and provincial roads as well as motorways (excluding investments).
Earnings/Expenses of TCDD and KGM in 2014 (bn TL)
Photo: Onur Uysal