OBG talks to Binali Yıldırım, Minister of Transport, Communications and Maritime Affairs

Interview: Binali Yıldırım

How will restructuring the ministry enable the federal government to promote greater rail and maritime transport coverage nationwide?

BINALI YILDIRIM: The ministry has always had a wide range of responsibilities due to the convergence of transport and communications infrastructure. These responsibilities have created the need for restructuring in order to fulfil our responsibilities in a systematic and up-todate manner. For example, we have set up three new maritime directorates: one for regulation of sea and inland waters, another for maritime trade, and the third for dockyard and coastal structures. This restructuring process involves adjustments to other directorates as well. The ministry has been assigned new responsibilities following the introduction of the Restructuring Law and other administrative regulations, yet there is still a need for certain supporting legislation. Within the new framework, a General Directorate for the Transport of Dangerous Goods and Combined Transport has been established under the ministry.

The new structure promotes collaboration between entities with overlapping responsibilities: Turkish State Railways (TCDD) is a state economic enterprise that also indirectly regulates the railway sector. To modernise the railway transport standards, the General Directorate of Railway Regulation has been created to act as an additional regulator. In addition to the drastic improvements recorded in the last nine years in maritime, railway and road transport, our new structure will allow further focus on issues related to rail and marine lines.

How can local manufacturing of transport industry components be promoted?

YILDIRIM: We have covered a lot of ground in shipbuilding so far. Turkey ranks 6th in the world in the number of shipbuilding orders received, 11th in deadweight tonnage and 3rd in yacht building. Focusing on local production of rail components, we set up factories for each sub-industry. Kardemir produces and exports high-speed rails and we recently began production of switches, rail fastening systems, traverses and wheel sets in other local facilities. We used to import rail system components in the past. However, today, the ministry is in charge of constructing the new metro lines in Ankara. In this regard, we have set a condition stipulating that at least 51% of the related equipment should be manufactured locally. I strongly believe that this condition promotes local production and will boost the competitiveness of our local manufacturers vis-à- vis international firms.

In the light of the challenges facing the Istanbul bridge tender, what measures is the government taking to attract private investors?

YILDIRIM: We did not receive any bid for the first tender since the size and conditions were quite overwhelming for the investors. Thus, we decided to announce a new tender with new terms. We decreased the total project cost from $10bn to $4bn-4.5bn by scaling down the project. Now, the project includes only the bridge and its 100-km highway extension; the remaining part of the motorway will be financed from the general budget. We have increased the vehicle/day guarantee provided by the government and extended the scope of tax exemptions to the investors. The company to be awarded the contract will commit to build the bridge in four years at a total project cost of $ 4bn-4.5bn. Out of 13 companies to receive the tender documents, six have offered their bids. Four of these six offers have been prequalified. The decision has not yet been made; however, we have created a competitive tender environment for a healthy outcome.

There are still some oppositions to the construction of a third bridge over the Bosphorus, but the heavy traffic volume in Istanbul rationalises the need for this bridge. The high number of vehicles crossing over the first and second bridges creates fuel and labour costs of TL3.5bn (€1.5bn). The third bridge will amortise itself in just two years. It is very clear that it is necessary to implement the project as soon as possible.