Restructuring and strengthening the Turkish rail sector
Before this project commenced, little progress had been made in reforming Turkey’s railways in accordance with EU norms. The Ministry of Transport was responsible for setting transportation policy in Turkey, including rail policy, but it was not performing a regulatory function. Moreover, the structure of Turkish State Railways (TCDD), a heavily subsidised state-owned company with a monopoly over all rail passenger and freight transport, made it difficult to assess the financial performance and profitability of its constituent parts.
The aims of the project and its core activities
Part of the general objective to reorganise the Turkish rail sector in accordance with EU regulations, this project aimed to establish the legislative and institutional framework necessary for achieving this objective.
There were four main components to the project. The first involved establishing a new legal framework that defined and governed the rail sector in Turkey as well as the role of TCDD. This process included identifying which infrastructural, safety, licensing and regulatory bodies the country needed to establish in line with EU regulations.
TCDD was provided with a management information system to allow effective monitoring of its financial performance against budget in all its business units.
A related activity was establishing a new business unit-based structure within TCDD. This activity required the appointment and training of new managers to operate this new commercial environment.
The final component involved creating a more stable financial relationship between TCDD and the state. This stability necessitated an analysis of all costs and revenues of rail services and identifying uneconomic activities. On this basis, new contracts were signed between the state and the company defining the latter’s public sector obligations.