TURKEY: UK Export Finance has agreed to guarantee £1·8bn through its Buyer Credit Scheme to support construction of the Polatlı – Izmir high speed line, which will create a more direct route between the capital and Turkey’s third largest city.
Under the agreement, UK companies are set to benefit from contracts for rail equipment including track, turnouts, point machines, fasteners, material and equipment for signalling, telecommunication and electrification systems as well as project insurance and freight forwarding services.
The financing was led by Credit Suisse and Standard Chartered Bank. The guarantees are being provided in line with Green Loan Principles to help Turkey meet its COP26 climate change commitments. Reinsurance is also being provided by international export credit agencies including SACE in Italy, SERV in Switzerland and OeKB in Austria.
New and rebuilt alignment
Once completed, the line will reduce the rail distance between Ankara and Izmir from 824 km to 624 km.
The new line will diverge from the existing Ankara – Konya high speed corridor at a junction at Kocahacılı, 27 km south of Polatlı, from where it will run west to Afyonkarahisar on a new alignment.
From there, the line will run west, broadly following an existing rail corridor via various cut-offs and realignments to serve Uşak, Esme, Salihli, Manisa and Izmir. Operating speeds would be at least 200 km/h throughout. The Ankara – Izmir journey time is expected to fall from around 14 h today to 3 h 30 min once the new line has been completed.
Work on the project started in 2020 with infrastructure manager TCDD reporting in March that 52% of the required civil works had been completed. Key interventions required include construction of 41 tunnels totalling 35 km, 56 viaducts totalling 23 km, 779 bridges, and 385 under and overpasses.
According to the government’s 2022 budget, the Ministry for Transport has allocated TL33bn for the scheme in total, of which TL28bn is to be sourced from external lenders by 2025.
The Ankara – Izmir programme was to have been tendered in 2016 in three stages: Polatlı - Afyonkarahisar, Afyonkarahisar - Uşak and Uşak - Izmir. A contract worth TL879m was awarded to a consortium of Tekfen Insaat and Doğüş Inşaat for civil works between Afyonkarahisar and Uşak, with work to be completed in 36 months, but the contract subsequently collapsed and procurement was relaunched in 2020. This led to ERG winning with a bid of €2·2bn.
Although based in Turkey, ERG has subsidiaries in London (ERG International UK Ltd) and Switzerland (SSB Sauerwein & Schaefer Bau), both of which will be supporting the Ankara – Izmir project.
Commenting on the UKEF deal, Murat Dedeoglu, ERG International UK Group CEO, said his company was ‘honoured with the achievement and its historic milestone. ERG look forward strengthening ties with UKEF and the Turkish government in the construction sector and adding value to the economies by making advance engineering and technological solutions available.’
Seeking UK support
ERG International UK approached the UK’s Railway Industry Association in October 2020 asking for support to understand the British supply chain’s capability in the areas of superstructures, electrification and signalling.
‘This is clearly a significant boost for both the UK railway industry, showing it has world-leading products and expertise which can export across the globe, and for the wider Global Britain agenda’, commented RIA Export Director Neil Walker. He told Railway Gazette International that UK suppliers would receive at least 20% of the contract value in orders under UKEF lending terms, although a significantly higher proportion was likely in this case.
Work on all three sections has now commenced but there is no clear indication when the line is expected to be completed.