Railway Companies

TCDD Holding Company on way

More details about preparations about reorganization of TCDD is publicized.

Preparations about reorganization of Turkish railways, which had started late last year in cooperation with TUSSIDE was recently presented. Here are the possible developments if this plan is accepted:

State enterprise to company

Some steps have already been taken in recent years about reorganization of TCDD. TCDD Tasimacilik was founded as train operator, TCDD Teknik for engineering and consultancy. Last year, all manufacture subsidiaries of TCDD was merged as Turasas.

TCDD’s status of “state enterprice” is planned to change to a commercial company.

Profitability will have priority

State enterprises are founded when huge organization and investment is needed where all capital needed is provided by state and public benefit has the priority in the management of company.

When TCDD becomes a commercial company, probility and sustainability of the company will have the most priority. This may lead to major changes in freight and passenger tariff.

New company will be more flexible in investments and procurement compared to current situation. On the other hand, huge investments like new high speed lines are expected to be done by Ministry.

4 companies under one holding

TCDD is currently responsible for rail network of Turkey. Companies like TCDD Tasimacilik, TCDD Teknik and Turasas are its subsidiaries, responsible for train operation, consultancy and manufacturing.

If plans are accepted as they are, a new company will be founded for infrastructure management. In this way, infrastructure company will not be the owner of state operator, but a sister company under same holding.

Passenger and freight may be splitted

In mid-term plans, there exists split of passenger and freight services which is frequently seen in many other countries. In this way, the subsidized/supported passenger services will be completely splitted from freight operator, which will mean a direct competition of state freight operator with private operators.

This split may help each company focusing on their own priorities. On the other hand, splitting of resources into two may prevent efficient usage. Change in demand during pandemic was a good example of this efficiency. All resource of suspended passenger services were used to meet fast increasing demand in freight services in Turkey.

Banliyo AS is on the table

TCDD Tasimacilik is the operator of two suburban services, Marmaray in Istanbul and Baskentray in Ankara, and has share in Izban in Izmir. This fast growing area may be managed by a new company as well. In additon to these 3 services, suburban service is under construction in Gaziantep (Gaziray) and preliminary analysis continue for Afyonkarahisar (Afyonray). There are projects also for two other cities, Kayseri and Balikesir.

New company for terminal services

Another company is planned in mid-term plans, Hizmet AS. Details are not clear, but a company giving service at stations, terminals and workshops is most likely. This will surely encourage private operators to start operation both in freight and passenger. This will also cause efficiency since one team will be enough for all operators at one terminal, not one for each operator.

THY is role model

Almost everyone agree that TCDD is far behind the expectations. The contribution of railways in gross domestic product is 19 in ten thousand in average for the period between 2002 and 2018, decreasing from 27 in 2005 to 11 in 2018. Average for the same period is 47 in Spain, 127 in Germany, 294 in Russia.

Income per train-km is much lower than Germany, France, Spain and Italy, where expenses per train-km is over than Italy and Germany.

In-house surveys show that one fifth of TCDD staff mention need of a total reorganization where two fifth request reforms.

Another big question mark is the increasing loss in last 9 years, reaching to TL 4 bn (€ 400 mn) every year since 2014. According to projections, the loss may reach to TL 7.7 bn (€ 770 mn) in 2030 if reforms are not applied.

THY, which has grown fast commercially after reforms in airlines, is frequently expressed as role model for TCDD. Similar path to THY is expected to be followed, since THY has become a world-wide known brand, competing with global airline companies, making profit and selling shares in stock exchange.

Deadline: 2022

According to article of Olcay Aydilek from Haberturk, the preparations will be completed in first half of this year, will become law before end of 2021 and new companies will be founded in first half of 2022. This meets the plans of Ministry of Finance and Treasury, which plans to complete reforms about all state enterprices by 2022.

Cover photo: Onur Uysal ©


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