‘Turkish Railways disturbs fair competition’

Published on 08-07-2021 at 06:30

Thirty Turkish logistics companies are teaming up to improve the competition conditions in the country’s rail freight sector. The main problem that they face is the lack of a level playing field and transparency from the side of the Turkish Railways (TCDD Taşımacılık). Specifically, the Turkish Railways are accused of appointing a single company as their operator while also providing it with extra benefits compared to other companies.

Last year, TCDD Taşımacılık appointed Pasifik Eurasia to be its official and exclusive rail freight operator for domestic and international operations. Pasifik Eurasia is well known for operating the dedicated Turkey-China export trains. Recently, it also sealed a collaboration with the Rail Cargo Group to boost operations along the New Silk Road.

The Turkish logistics sector objects to the appointment of the company as the only operator of TCDD Taşımacılık since this process took place without transparency and without inviting other companies to participate in any tender procedures. On top of that, TCDD Taşımacılık seems to be openly benefiting its operator by prioritising it for equipment supply and by providing it with discounts that do not apply for other logistics companies.

Non-tariff barriers

The situation was reported by the Turkish newspaper DÜNYA. The logistics companies’ alliance claims that when it comes to transportation towards China and in between destinations, TCDD Taşımacılık imposes non-tariff barriers to companies other than Pasifik Eurasia. In practice, this means that companies that want to run trains in this direction cannot do it.

On top of that, when it comes to buying new equipment, companies also face barriers. For them, TCDD Taşımacılık provides higher than average prices, while it also encourages them to purchase equipment from its own agent and operator, Pasifik Eurasia. Consequently, the aligned companies demand transparency and the chance to compete without any unfair competition. Yet, interestingly enough, TCDD Taşımacılık and Pasifik Eurasia have not provided answers to any of these allegations.

A non-liberalised sector

The main issue of the whole situation seems to lie a lot deeper. Representatives of the Turkish logistics sector like DEIK Logistics claim that the liberalisation process of the railways was never fully implemented, despite being on the agenda since 2012. Foreign private companies are always one step away from investing in the country. However, they cannot proceed because the liberalisation process failed in practice, excluding all external players for good.

As a result, the Turkish railway market is characterised by monopolies that cause immense problems to most of the country’s operators. That is why the logistics sector now demands the full liberalisation of the railway, equal investment opportunities and more encouragement for the private sector, resolution of infrastructure problems and better connectivity throughout the country.