Economic Concessions for Ottoman Rumelia Railway Projects and Involvement of Foreign Capital, 1860-1936

Abstract

Ottoman authorities considered a network of railways as an effective way of strengthening the sovereignty, benefitting more from trade with Western Europe and serving military purposes. Railways played a crucial role in transporting Western European manufactured goods and commercialisation of raw materials and other inland products of Central Anatolia. Also, efficient railway transportation allowed the connection of certain trade centres and ports. However, lack of capital, financial and technical abilities drove the Ottoman authorities back to foreign investors. Therefore performance of large scale, capital intense projects initiated European investors was substantial in the nineteenth century. The Rumelia railways and concession experienced political conflicts, negotiations, and financial difficulties. The concession was first awarded to a Belgian company which later passed to a German investor due to some financial problems. The Ottoman Empire lost some of its territories in Balkans and the railway company started to operate in multiple countries. This study aims to analyse the development of the Ottoman Rumelia Railway, so-called Oriental Railway, constructed by the European investors with concession provided by the Ottoman Government in the 1860s until it was bought and nationalised by the Turkish government in 1937