TCDD NATIONAL HIGH SPEED TRAIN PROJECT
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1 TCDD NATIONAL HIGH SPEED TRAIN PROJECT 2017
2 TABLE OF CONTENTS TABLE OF CONTENTS BRIEF INFORMATION ON TURKISH RAILWAY SECTOR TENDER FOR NATIONAL TRAIN PROJECT OF TCDD UNDER SIP PROGRAM ADVISE FOR KOREAN COMPANIES
3 1. BRIEF INFORMATION ON TURKISH RAILWAY SECTOR As a consequence of a policy shift in the 1950s, currently both load and passenger carriage is dominated by motorways in Turkey. Since the main focus was on the motorways, some structural problems arised in the TCDD due to low investment levels. Insufficient railway network Low standard of infrastructure Insufficient quantity and quality of railway vehicles Insufficient signaled and electrified lines Insufficient qualified staff Difficulties regarding competitiveness and integration with other transport means Starting from 2003, railways had been put under the focus again as a state policy and a total of USD 56.9 billion (with 2016 prices) had been invested to construct an additional length of 1,805 km railway network. Current length of railways in Turkey is 12,532 km., 1,213 km of which are high-speed train lines. In order to improve the railway sector in Turkey, the Government prioritized the following targets: Expanding the high-speed train (HST) network Renovation of the existing lines Making the whole railway network signaled and electrified Improving local and national railway industry Increasing the number of logistic centers and connecting them to industrial zones via railway Completing the liberalization process of the railway sector The Government put a special importance on building fast train and high speed train network. Fast trains travel at speed of 200 km/h while high-speed trains travel minimum at a speed of 250 km/h. The length of HST line is 1,213km and a total length of 5,277 km of fast train and high-speed train lines are under construction and in planning process. With the completion of Government s all projects, the total length of railway lines in Turkey will reach 25,000 km by the year Currently there is an uninterrupted high-speed train line from Konya to Istanbul and with on-going and planned investment, the Government aims to extend the high-speed train network. Currently, Turkey has 19 high-speed train sets, 17 of which are in operation. However; with the planned extension of the high-speed train network, Turkey will be in need of new HST sets. Therefore; a tender to purchase 10 sets of HST had been launched and an additional tender to purchase and produce 96 HST sets, including technology transfer and manufacturing of the National Train, was announced on 23 November In line with the TCDD Strategy Document, Ankara-Sivas and Ankara-Izmir HST lines will be completed and commissioned and construction works of Kayseri-Yerkoy HST line will be initiated. The Government s 2023 target is to reach a total length of 25,000 km railway lines; within this target 1,250 km of new HST, fast train and conventional lines will be constructed in Turkey over period. 3
4 The table below displays the evolution of length of railway network of Turkey over period. Railway Network (km) Conventional Lines 11,120 11,209 11,272 11,319 11,319 HST Lines ,213 1,213 1,213 TOTAL 12,008 12,097 12,485 12,532 12,532 The map below displays the current HST line from Konya to Istanbul, two HST lines that are under construction and planned fast train lines. HST lines that are in operation are listed in the table below with their routes and commissioning dates. HST Lines in Operation Commissioning Date Ankara - Eskisehir 13 March 2009 Ankara - Konya 24 August 2011 Eskisehir - Konya 24 March 2013 Ankara - Istanbul 25 July 2014 Konya - Istanbul 18 December 2014 Ankara Sivas HST line and Ankara Izmir HST line are both under construction and according to Strategy Document of the TCDD, both will be commissioned before the end of According to the same Strategy Document, construction of Kayseri Yerkoy HST line is also planned to be initiated before the end of
5 656 km-long Sivas-Erzincan-Erzurum-Kars fast train line (200 km/h) and 230 km-long Istanbul Kapikule (Edirne) fast train line (200 km/h) are under planning and TCDD aims to complete both lines until The total number of passangers that traveled by various train types are listed in the below for period: Passenger Nb. by Train Type (thousand) Suburban 50,361 25,451 55,400 72,040 68,079 Mainline 19,799 20,891 22,848 23,145 20,791 Blue Train Express 14,552 15,130 15,984 15,652 13,573 Ordinary Passenger Sleeping Cars HST 3,350 4,207 5,086 5,693 5,898 International TOTAL 70,284 46,441 78,404 95,317 89,038 With the commissioning of new fast train and HST lines, railway passangers are expected to increase in the coming years. The number of the HST passangers is on the rise as seen in the graph below: 7,000,000 6,000,000 5,085,697 5,693,286 5,898,387 5,000,000 4,207,324 4,000,000 3,349,524 3,000,000 2,556,515 2,000,000 1,000, ,341 1,889, HST Passengers 5
6 The load carriage with railway is displayed in the table below for the years 2015 and 2016: Load Carriage (net ton, thousand) % Change Domestic 22,322 22, % International 1,964 1, % Official 1,592 1, % TOTAL 25,878 25, % Baku-Tbilisi-Kars (BTK) Railway was inaugurated on October 30, 2017 with the participation of President of the Turkish Republic Recep Tayyip Erdoğan, President of Azerbaijan İlham Aliyev and Georgian Prime Minister Giorgi Kvirikashvili. BTK railway project was initiated in 2005 and construction began in Seventy-nine kilometers of the BTK railway passes through Turkey, 246 kilometers through Georgia and 504 kilometers through Azerbaijan. In the short term, a total of 6.5 million of load is expected to be carried. The project is expected to strengthen Turkey's economic and political ties with countries in Eurasia as it will provide an easy, less-expensive option for transportation, also enhancing Turkey's role as a hub in the Middle Corridor. 6
7 2. TENDER FOR NATIONAL TRAIN PROJECT OF TCDD UNDER SIP PROGRAM Turkey, with its current fleet of 19 sets, lacks high-speed trains amid the growth of the highspeed rail network. In this regard, Turkey launched a tender for the purchase of 10 high speed train sets on 30 January Spanish CAF had made the lowest bid in the tender; however, the proposals are being assessed not only on the basis of price but for various aspects including energy unit cost. TCDD still did not announce the winner of the tender. In addition to 10 sets HST project, the long-awaited tender of TCDD for acquisition of 96 sets of high speed train cars including technology transfer and local production of the National Train under Industry Cooperation Program (SIP) had been announced on 23 November This is considered as one of the most important projects of Turkey which aims to enable production of national high speed train cars at the end of the project via technology transfer from the awarded company. With this project, Turkey will meet its short and long-term objectives of increasing the high-speed train fleet. Submission of Pre-QualificationDocuments According to the announcement, the interested parties are to submit their documents in line with the Pre-Qualification Specification no later than 25 January The main tender will be launched for the applicants that pass the pre-qualification assessment. The Tender Commission will start the 1st session of assessment on the submission date. First of all, all submissions will be announced to the audience by the Commission and the envelopes consisting of pre-qualification documents of the interested parties will be opened publicly and assessed only on the basis of missing document. In this session, no other assessment nor any decision will be made. Assessment for Pre-Qualification The assessment will start with exclusion of the parties from further assessment that provided missing documents on 25 January The remaining submissions will be assessed on the basis of proficiency criteria that proves the candidates capabilities to undertake the Works and their compatibility with the conditions specified in the pre-qualification specification. It is important to note that in the pre-qualification stage, the interested parties will not make any price proposal but provide documents regarding Technical Sufficiency and Financial Sufficiency, as well as Application Letter and necessary documents from Chamber of Trade offices and documents to prove partnerships (if applied). All forms and detailed explanations regarding technical and financial sufficiency can be bought from TCDD HQ in Ankara and also can be seen on TCDD web page. However; the interested parties are obliged to buy the Pre-Qualification Specification in return of TL 10,000. There is no purchase by post. Lastly, all the qualified parties will be invited to the tender with an invitation letter that includes information regarding the price and location of Tender Specification to be bought and the exact date and time of the Tender. 7
8 Tender The parties that passed the pre-qualification and invited to the tender, shall submit 3 (three) seperate proposal files in tender application: 1. Technical Proposal: All the requested documents for technical assessment. 2. Economic Proposal: Proposal letter with the price and bid bond. 3. Industry Cooperation Program (SIP) Proposal: Documents regarding compatiblity with the SIP obligations and undertakings. TCDD will not assess only the price but also operation and maintenance cost, efficiency, quality, technical superiority, life-cycle cost and SIP commitment, etc. The most favorable proposal will be determined considering all Economic Proposal Point, Technical Proposal Point and SIP Proposal Point. Therefore; lowest-price bidder does not necessarily win the tender. THE PROJECT The Project aims to produce National Train through technology transfer that will be provided by the awarded company. The first deliveries of the new railway vehicles will take place within 22 months after signing the contract and all 96 high-speed trains will be delivered until The terms of the tender include the construction of a new production plant in Eskisehir-Turkey, the transfer of know-how and the free of charge transfer to TULOMSAS, at the end of the manufacturing process, of all the equipment used by the winning manufacturer. The Project includes; The supply and commissioning of 96 sets of high speed trains at a speed of 250 km/h The first 20 sets of high-speed trains to be manufactured in the home country of the tender winner company, with 10% of local component. The following 60 sets will be manufactured in Turkey with a local content ratio of 53%. The final 16 sets of high speed trains will be manufactured in Turkey by TULOMSAS (the national locomotives and passenger coaches manufacturer) with a local content ratio of 74% under the supervision of the winner of the tender. Supply of Spare Component for HST, 30 for each Supply of 2 Full Scale and Moving HST simulators Supply of 10 Desk Type Simulator and 2 Training Control Station Establishment of Local Production and Test Center The transfer of know-how and the free of charge transfer of Production Center with all the equipments to TULOMSAS at the end of the manufacturing process. Certification + Registration and Type Approval Supply of technology transfer + Technical Assistance Maintenance and Repair and Cleaning Service 8
9 Contract Period is 137 months after the Initiation of Works. The Initiation of Works: The Works will be initiated on the same date of the 1st Advance Payment. The Date of 1st Advance Payment will be made within the first two months following Contract Signing. The Main Local Manufacturer of the Project will be TULOMSAS Manufacturing Location: The location for the manufacturing of the 76 high-speed train sets will be (should be) in Eskişehir. According to the project specifications, TCDD provides some options, but only within the city of Eskisehir. TUVASAS will establish a train manufacturing facility in Eskisehir. The Contractor will examine this facility to decide whether the facility is sufficient for the manufacturing. If the facility is considered sufficient, the production will be undertaken in TUVASAS facility. If not, the Contractor will either reorganize TUVASAS facility or establish a new manufacturing facility on the land determined by TCDD or TULOMSAS in Eskisehir. Delivery Location: The high-speed train sets will be delivered in Ankara. Guarantee Period will be 36 months for each train following their provisional acceptance. Delivery Dates 20 Sets of HST to be Imported: The first delivery from the initial 20 sets will be made in the 22nd month after the contract signing and the 20th set is to be delivered in the 36th month. The first two trains will have a testing preiod of 8 months and this period is 2 months for the remaining 18 sets. 60 Sets of HST to be Produced in Turkey: The first and second sets will be delivered in the 38th and 39th months, respectively and both will have testing period of 12 months. Then the third and the fourth sets will be delivered in the 50th month. Finally, the last set will be delivered in the 69th month after the contract signing. 16 Sets of HST to be Produced by TULOMSAS: The manufacturing of 16 sets will be undertaken simultaneously with the manufacturing of the 60 sets. The first two sets of National Train will be delivered in the 64th month and both will have testing period of 20 months. The last set, 16th set, will be delivered in the 75th month. Therefore; 75 months after the contract signing, all 96 sets of HSTs will be delivered in Ankara. 9
10 Technology Transfer Process The technology transfer process will be initiated during the manufacturing of the first 20 sets. HST manufacturing capability will be gained by Turkey before the production in Turkey starts and the technology transfer process will continue during production in Turkey in a way to continuously increase the local production share. The manufacturing of the National Train (16 sets) will be undertaken simultaneously with the manufacturing of 60 sets. The Contractor will provide technology transfer to TULOMSAS regarding design, analysis, software, engineering calculations, manufacturing and montage, examination, test and controls, maintenance, repair and revision of National Train and all its components. SIP Obligations of the Contractor The SIP Obligations will be undertaken under 4 main categories: Category A - Local Production Contribution: Usage of local component and services Category B - Investment: Main manufacturing facility investment Category C - Technological Cooperation: Technology transfer and cooperation Category D - Export: Regional export guarantee Some Technical Requirements for the Train Cars According to the requirements, all 96 high-speed trains; will have to run at a minimum speed of 250 km/h, will have Multiple Operation Mode will work with distributed traction force will be equipped with ETCS Level 1 and Level 2 signaling system will also have to be equipped with a regenerative braking system will have a capacity for the transport of 470 passengers, a minimum of 90 seats in business class cars (each train will have two business class cars) will have a restaurant car with 16 seats, of which eight seats at the bar 10
11 3. ADVISE FOR KOREAN COMPANIES As mentioned before, the TCDD will not base its assessment solely on the lowest-bid but technical capabilities, quality, commitment to SIP program will be also vital points that TCDD will assess. Since, Hyundai Rotem already has a strong experience regarding cooperation and production with TCDD through their company Hyundai Eurotem, this might be a distinctive advantage to easily comply with technology transfer and SIP program commitment. However; the location of the manufacturing facility should be based in Eskisehir according to tender specification. That might be regarded as a negative point since Hyundai Eurotem will not be able to use its existing facilites in Adapazari. This is a long-awaited tender by the market players and many HST manufacturers are expected to have interest in the tender. There are not too many large manufacturer companies and all their technical capabilities are known amongst the market. TCDD wants a high competition in the main tender. On the other hand, the condition that the manufacturing center should be established in Eskisehir and free of charge transfer of the manufacturing center with all its components might be considered as a burden by the interested companies and might reduce the attractiveness of this project. According to market perception, the most favorable companies for the main tender are Hyundai Rotem, Alstom, Siemens and China Railway Construction Corporation (CRCC) since other companies would not be able to be competitive due to conditions of the tender. As is known, this project will be undertaken within the concept of SIP Program (Industry Cooperation Program), the interested parties will be able to bid in terms of USD or EURO, not in Turkish Lira. Hyundai Rotem is advised to negotiate the location condition with the Turkish officials and also collect other parties opinion regarding the free of charge transfer of the manufacturing facility with all its components at the end of production period. 11
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