International Logistics Road Transportation Industry in Turkey - Essay Example

International Logistics Road Transportation Industry in Turkey Road transport serves 95% passengers and 90% of freight in Turkey.Transport demand in Turkey has grown significantly over the past five decades. Overall, demand (measured in passenger-kilometre and tonne-kilometre) has grown at an annual rate of nearly 8% since 1950. Demand for road transport has grown at an annual rate of about 7.6% while rail transport demand has grown by about 2%, demand for water transport by 5% and air by over 16% per year. As in most developing countries, road transport is becoming a much more significant mode for both freight and passenger transport. Rail market shares have declined. It is unlikely that much new traffic can be attracted to the railway without significant investment in new railway infrastructure or major changes in railway service. Road transport represented about 37% of the total transport market in 1950 with rail accounting for 55%. By 2000, road transport represented 93% of the total market, rail about 4%, water about 2% and air 1% of the total intercity transport market in Turkey. While the current rail transport activity is significant, it is certainly less important to the Turkish economy than in the past. Although traffic market shares of the TCDD have declined significantly, overall railway traffic has somewhat grown. Total TCDD railway traffic flows have grown at an annual rate of about 2%. Freight services have grown at an annual rate of about 2.3%; Suburban services have lost traffic at about 3% per year, while intercity passenger traffic has increased by 1% "The General Directorate of Highways (KGM) is a. governmental organization in the Ministryof Public Works and Settlement and entitled by its Law to plan, design, construct, maintainand operate motorways, state and provincial roads. In the last decades the KGM road network through out the country has been completed. The policy of KGM is to improve and rehabilitate tire existing network. In the context of roadpolicy, traffic demands, social and economic structure, regional needs, forecasted futureenvironmental developments and traffic demands have been taken into account in realizationof road infrastructure projects" ( Country report of Republic of Turkey in the field of transport and telecomunication, published by Turkish government in 2007) Issue The Turksih Highways Directorate belongs to Ministry of Public Works and Settlements (Bayindirlik Bakanligi). It is responsible for construction,maintenance and operation of highway network in Turkey, but it is not autonomous since revenues come from general budget.It is responsible for 63 000 kilometres of roads of which 31 000 are State roads, 1897 are toll roads, and the rest are provincial (villayet) roads.Village roads belong to the MoT.The Highway's Directorate includes 18 Regional Offices of which one is in Ankara. All roads arerealized with public funds.The Turkish General Directorate of Highways,KGM, has annual estimated budget of about EUR 1 billion. The investment budget,amounting to approx. 60% of KGM's totalbudget is thinly spread over numerous projects with an average completion time of nine years.Investments are dominated by works on an overdesignedmotorway programme. Totalexpenditures on the programme reached about EUR 10.4 billion in 2001 with annual allocations in the last few years of about EUR 468 million. The operational budget, on theother hand, is mostly consumed by wages, with minimal allocations for maintaining existingassets.Turkey's road / traffic accident rates are 3-6 times above those of EU countries. About 7 000 people die each year in road accidents and the losses due to injuries and property damages are estimated to be in the order of 2% of GDP. "The state in Turkey still plays a major role in basic industry, banking and transportation", ( CIA world factbook, 2007) Every two years the number of fatalities on the roads equals the death toll of the tragic Marmara earthquake in 1999. 8.2.2. Highways Since 1950, a very distinct shift occurred in transport investment, which has favoured the development of roads and, to a certain extent, harbours. As a part of Trans European Motorway (TEM) project, 1726 kilometres of motorways have been built in the last two decades. Investments to improve the highway system resulted in highways dominating freight and passenger transport. As a result of developments and improvements in the highways network, the relative importance of highways has increased. The disproportion between the development of roads and railways has resulted in continued inadequacy of transport facilities and in a dramatic decline of rail traffic. There is no Master Plan for roads in Turkey. The Regions make their proposals to the Directorate of Roads, which prepares the investment plan, to be approved by the State Planning Organization and afterwards voted in the Parliament. State roads are planned for 20-year time horizon while toll roads are planned for 30-year time horizon. Often planning is done on the basis of traffic forecasting which is made with annual growth factors based on past trends. Approx. 2% of State budget goes for roads, and all allocated money is spent because otherwise they have to be returned to Treasury. For State roads, a social feasibility study and an environmental impact assessment study (EIA) are necessary, in addition to traffic accident analysis. There is political vision of 15 000 kilometres of 4 lane motorways based on 3 priorities: - Insufficient capacity. - International transport facilitation. - National transport needs. For toll roads, it is necessary to have financial feasibility studies. Currently few toll roads are built. The toll roads were implemented according to past political decisions of the Government in the 80's. They are 4 lane roads with full access control. Tolls are implemented according to mileage run and category of vehicle. They are: - Istanbul - Ankara. - Edirne - Istanbul. - Mersin - Iskederun - Gaziantep. - Cesme - Izmir - Aydin. - Gaziantep - Sanli Urfa (under construction). - Yenice - Pozianti - Nigde (under construction). The construction of these public roads is achieved through credits secured by the contractors against State guarantees. Once the roads are constructed they are transferred to the State, which undertakes the payment of the loans. This is an interesting type of PPP in road construction. No privately financed or BOT roads exist in Turkey. Selection of contractors is done on the basis of criteria such as: - Technical capacity. - Financial capacity. - Previous experience for similar projects. - Volume of work in progress. Maintenance of highways and roads is done by public funds at the level of Regions. Till 2003, this was done by their own personnel and sources. Since 2003, they give out contracts to private contractors. But there are no performance contracts. Available funds are sufficient to cover only 10% References: Application of the TIR Convention in Turkey, Undersecretariat of Customs, 2002. Economist Intelligence Unit, Country Profile Turkey, EIU, 2003. European Conference of Ministers of Transport (2002). Competition and Cooperation in International Rail Freight Services. Paris:ECMT Burkhardt. M., Combined Perspectives for Road and Rail, Seminar: New trade Patterns: New Transport Demands in the Black Sea Region, ECMT, Antalya, Turkey, 1998 Republic of Turkey ministry of public works and settlement general directorate of highways, Republic of Turkey, 2003 Country report of Republic of Turkey in the field of transport and telecomunication, government of Republic of Turkey, 2007 CIA world factbook-Turkey Read More