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Logistics industry in Turkey report presented by the Investment Support and Promotion Agency

The Republic of Turkey Prime Ministry Investment Support and Promotion Agency (ISPAT) made public the latest Report on Logistics Industry in Turkey.  According to the report, the railway sector is experiencing a period of significant and sustained investment in Turkey. Among investment opportunities in the sector are: the expansion of high speed railway network, the rehabilitation of existing lines, the modernization of infrastructure and technology, enhanced logistics and transportation operations.

growth_projection_rail_turkeyAccording to the Ministry of Transport, Maritime Affairs and Communication, in 2011, 80% of freight and  90% of passengers were transported via roads while only 5% of freight and 2% of passengers moved via railway within Turkey. Turkey is determined to diversify the modes of transportation in order to reach a  more balanced state. Thus, it plans to decrease the percentage of freight carried via roads to 72% by 2023 and  increase the share of railway transport to 10%.

The share of railways will  increase 15% in freight  transportation and 10% in  passenger transportation,  thus, reducing the  transportation share of  roadways. To achieve this target Turkey will build 5,000 km of new,  conventional railway and 10,000 km of high speed railway by 2023. The public sector will spend TL 70 billion for new rail lines by 2023.

There are incentives specifically designed for the maritime and railway sector

development of railway freight_turkeyIn 2012, more than 25 million tonnes of freight was transferred via railway. That is a CAGR 2%  increase from 2008. The majority of this load were  domestic freight, while only 8% was international.  However, as international connectivity of railroads  increase international freight handling will also increase.
• According to Deloitte analysis, Turkey’s train  freight volume is set to grow CAGR 3.2%  surpassing 29 million tonnes between 2012 and  2017. Tonne kilometer, which is a critical  performance indicator for modes of transport, increased for railroads CAGR 4.9% from 2002 to  2012.
• A number of major cities have urban rail networks,  light transit systems and underground subways of  some sort. In Istanbul alone, there are plans to  provide more than 100 km of new lines by the end  of 2018 and over 270 km of lines by the end of  2023.
• Turkey sees railways as a preferred mode of  transportation for freight and is trying to identify  ways to increase its share.
• Furthermore, Turkey plans to carry freight and passengers from hubs around the country via high  speed train networks that will be connected to international railroads.

The acceleration of the industry is set to continue with  the railway sector’s liberalization process

As of May 1, 2013, the new law associated with the liberalization of railway transportation in Turkey breaks the monopoly of the state for rail networks and replaces it with a competitive and free market environment. This  law enables TCDD to act as the railway infrastructure operator and it will establish TCDD Taşımacılık A.Ş within  a few months*.
• The affects of the new law foresees improvement and expansion of the railway network with investments from  both private and public investors.
The new law permits private and public companies to conduct:
• Construction of the railways which will be under authority of the said company.
• Operation of railway which is leased or constructed.
• Operation of trains using the state railway network.
• The Ministry of Transport, Maritime Affairs and Communications will grant operating rights to private companies  that want to build and operate railways to conduct freight and passenger transportation operations.
• According to the law, “when companies want to construct railway infrastructure, the property required for the  railway infrastructure will be expropriated by the Ministry and cost will be collected from the company and  easement right will be given to company so as not to exceed 49 years”.
• As investments due to liberalization process in railways speed up, an integrated network among logistic  villages, industrial zones and airports will boost Turkey’s economy even further.

The sector is experiencing a change in technology and is switching to high-speed rail


There is a total of 888 km of high-speed railway network in Turkey. It is  not enough for the total land area of 785.3 thousand square kms.  However, the Turkish government has plans to expand the lines and invest  a total of more than USD 23.5 billion into the sector through 2023.

The Report is available at this link http://www.invest.gov.tr/en-US/infocenter/publications/Documents/TRANSPORTATION-LOGISTICS-INDUSTRY.pdf


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