Liberation of the railway market in Turkey and its impact on public finance

Although the legal obstacles to the private sector's entry into the railway sector were removed in 2013, the desired level of liberalization in the sector could not be achieved. The relations between TCDD, the infrastructure operator in the sector, which is far from competitive, and its subsidiary infrastructure user TCDD Tasimacilik are not based on commercial principles, and this situation creates a distorting effect and prevents enough private sector railway train operators from entering the sector. On the other hand, TCDD is the state-owned enterprise that has made the most investment (9.6 billion TL in 2020) with the effect of increasing high-speed train investments in recent years. In order to meet the investments and non-investment financing needs of the institution, resources are transferred regularly by the Ministry of Treasury and Finance. In 2020, approximately 12.7 billion TL of capital transfer was realized. Due to limited central budget opportunities, new financial instruments other than foreign debt and alternative models with more affordable financing costs should be put into practice for the financing of high-amount infrastructure investments such as YHT investments, and measures should be taken to pave the way for liberalization in the sector. The main purpose of this study is to regulate the railway sector, which creates a great burden on public finances in Turkey, and to reveal the conditions that will enable it to become competitive. Public offering and public-private partnership model, which is a method frequently used in recent years to reduce the burden created by TCDD on public finances, has come to the fore. In this context, privatization and public-private partnership methods were examined and their possible effects on public finances, if implemented, were evaluated. Although public-private partnership practices are an effective method to increase private sector participation, they also bring risks due to the public's debt assumptions and demand guarantee obligations. It is necessary to determine the suitability of the investment project with the model and the guarantees to be given with the evaluations to be made on a line basis. In addition to the measures to be taken for TCDD and TCDD Tasimacik to operate according to commercial principles, the public offering or public-private partnership method to be made under appropriate conditions can be a solution to the financing problem.