Sea Fight in Marmara…

Nowadays, we watch a very interesting sea-fight, which is not less interesting than the Battle of Trafalgar. Well… this one is in Marmara Sea and 2012…

On the north side there is TASS (Tepe-Akfen-Souter-Sera Joint Venture Group) which paid USD 862 million in June 2011 to buy through privatization process Istanbul Deniz Otobüsleri Sanayi ve Tic. A.Ş. (IDO). IDO, which is private since June 2011, is a ferry company founded in 1987 by the Istanbul Municipality to promote sea transport. (For a short history of IDO please click)

On the south side, we see Bursa Municipality and Negmar.

Well, it all started just after the privatization of IDO, which is the operator of many ferries in Marmara Sea. One, and the most profitable, line of IDO operates is Eskihisar-Topçular line. IDO is  (or may will be ”was”) the only one ferry company on Eskihisar-Topçular line. After the privatization, TASS decided to change the fixed prices and started new price policy, called as ”flexible” for passengers and cars. Like in the airlines, for example, TASS sold higher-priced last minute tickets and priced the seat preference option for the passengers. Moreover, TASS also raised the general prices. For example price for a car with one passenger to be carried through the Yenikapı-Bandırma line raised from TL 125 to TL 228. Transport price for a three-people family with car costed TL 412, while it had costed about TL 175 before.

People, who started to pay much more for the same tickets, raised their voices and made complaints about.  Turhan Tayan, a member of Turkish Parliament, submitted not only a parliamentary question to the Minister of Sea, transportation and Communication but also a bill of complaint to the Turkish Competition Authority, saying that TASS has breached the Article 6, of the Law 4054 (The Act on the Protection of Competition), abusing its dominance.

In the following days TASS stepped back and changed its price policy for IDO and decreased the prices for passengers and cars. TASS claimed that people could not understand the policy and pointed that this was a transition period and the passengers could not adopt to the new structure.

However, it seems that this  “pandemonium” attracted new rivals: Bursa Municipality and Negmar.

Bursa Municipality decided to start to operate a ferry line, called BUDO, between Bursa (Mudanya) and İstanbul (Kabataş) ports.

Negmar (Negmar Sea Transportation Company) is a partnership of Gübretaş, Nesma Yatırım Holding and İstanbul Lines. Negmar, like Bursa Municipality, announced to commence sea transfer on October 25, through the (Gebze) Eskihisar- Yalova (Topçular) line, which is one of the most profitable lines in the area since it prevents thousands of people  to drive through Gulf of İzmit especially during holiday seasons. It is estimated that through Eskihisar-Topçular line 4 million cars, which create TL 200 million ( about USD 112 million) turnover, are carried in a year.. About the subject, Negmar Chairman Abdullah Kutlu talked to daily Hürriyet and said  “We noticed that passengers were looking for new ventures, and decided to make this investment. We will transport passengers between Eskihisar and Topçular in five ships. We have currently bought three and will purchase two more.

The mayor of Bursa Municipality, which had signed a deal in August with a Norwegian firm to buy its first ferry, pointed the issue and told Hürriyet At first they thought we were bluffing, but we immediately jumped into action. Now we have bought two ships. … We are also about to sign an agreement for another two ships, [which may be] rented or purchased.

The main actor TASS is mad about this ongoing process. Hamdi Akın, chief executive of Akfen (a partner of TASS), talking to the business magazine The Lira, laid stress on the privatization process and the amount they paid and said that since they had paid USD 862 million to the İstanbul municipality to win the tender, the [new rival] companies should pay some amount as well. According to him, the ports that those companies will use could not be given just free. He also included that if the new rivals would come to the play, there should be an auction for them too. He concluded that otherwise they would file a suit.

Today, Brian Souter, a partner of TASS, told Financial Times that if a rival company starts to operate as a competitor in one of the lines purchased by TASS, TASS will re-evaluate its city-lines between the two sides of the Bosphorus, which is very vital for İstanbul’s daily life. In the FT article, there is an interesting point. According to FT Souter Investments said that it was “led to believe” by documentation provided by Istanbul municipality that “the route would be exclusive for a period of time”.

Well folks, in the following days we expect a harsh sea-fight in the the Marmara Sea, including international companies, municipalities, passengers and government organizations. We will see whether there will be one “Padisah” in the line or whether the “Janissaries” will overthrow him.

Sources: Hürriyet, HurriyetThe Lira, bursadabugun.com, Financial Times

One thought on “Sea Fight in Marmara…

  1. Pingback: Sea Fight in Marmara-II: TCA out of the game | Turkish Competition Bulletin

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