Country Report Railway Sector

8th TSCC Meeting 24-25 June 2009 Ulaanbaatar, Mongolia 1

Contents •

Status of Railway sector projects



Railway transport sector introduction



Follow-up Actions

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Status of Investment and Technical Assistance Projects Railways y MON IP 3: Project  for modernization of  Mongolian Railway is postponed and the contents  is changed. y “Railway rolling stock fleet expansion” new  project is going to be start. 

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“Railway rolling stock fleet expansion” project Project aim: Expansion of railway transport capacity, improvement of rolling stock fleet, construction of new multimodal terminal Works to done within the project: y Construction of multimodal transport terminal y Purchase of locomotives for freight transportation y Purchase of 245 freight wagons y Purchase of shunting locomotive, reach stacker and crane

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“Railway rolling stock fleet expansion” project

¾

Project cost is USD60 million

¾ The

Loan Agreement between the Government of Mongolia and Chinese Export, Import Bank is signed in 2009.

¾ Project

period – year 2009-2011.

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Needs for development of Zamyn-Uud port y

Rapid growth of foreign trade and considerable increase  of traffic volume via Mongolia to neighboring countries , 

y Operating for long term without significant upgrading,  equipment replacement and considerable investment in  maintenance and service. y Insufficient capacity of Transshipment volume‐ only 2  mil. tn                       y Predicted annual cargo transshipment volume – approx 5‐ 6 mil.tns in 2011

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Mongolian existing railway line

Current situation of Mongolian Railway 1810,0 Total length of railway line, km 1110,0 Length of main line, km /Sukhbaatar‐ ZamiinUud/ 20.0 Capacity of main line, mln.tonn 90,0 Percentage of the railway freight transport in total freight  transport in Mongolia 50,0 Percentage of the railway passenger transport in total  passenger transport in Mongolia 

New Project Proposal y Railway line in Gobi‐East region

À.Gobi region’s railway line Tavantolgoi-Zuunbayan section- 370 km B.East region’s railway line

¾

¾Shaishand-Baruun-Urt section -350 km ¾Baruun-Urt-Choiabalsan section-200 km

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Proposed railway line 

Choibalsan Choibalsan

Sainshand Sainshand Tavan tolgoi Tavan tolgoi

Importance of Tavantolgoi-ZuunbayanSainshand railway line ¾Connection to railway main network ¾Possibility to export the mineral products to Russia and China using two directions, as well as transport for the local needs ¾Possibility to connect through the Russian and Chinese railway network to the Europe, Middle East, East and South East Asia by Russian ports of Bladivostok, Nahodka, Vostochnyi and Chinese port of Tianjin and Dalian.

Main goal for railway sector development

• Development of railway sector legal framework • Restructure in railway transport sector • Extension of railway network • Increase of carrying and passing capacities of railway  line 

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Transit transportation through Mongolia Year From Russia to China From China to Russia Total

2003

2004

2005

2006

2007

2008

3 453 430

4 648 530

5 028 430

4 003 100

2 944 700

1 964 700

191 400

176 050

360 000

465 780

528 600

366 920

3 644 830

4 824 580

5 388 430

4 468 880

3 473 300

2 331 000

External coal market demand №

Market consumer

Thermal coal demand, mln.tn

Coking coal demand, mln.tn

1.

RUSSIA

-

73

2.

KOREA

66

17

3.

JAPAN

101

80

4.

CHINA

13

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Extension of railway network  The real necessity to extend the railway network ¾ possibility of connection of the regions ¾access to the sea ¾not dependant with one market To transport the mineral deposit product and to open the new transit corridor it is required to construct the railway line to connect the existing mail line with Gobi and East regions.

Cooperation in railway sector ¾ The foreign investment should not exceed 49%  in railway infrastructure for the  main lines  ¾ The use of Private Public Partnerships (PPP) and  Private  Sector  Participation  (PSP)  in  the  railway  activities 

Status of Investment and Technical Assistance Projects Trade Facilitation y MON TA 2: Ulaanbaatar Intermodal Logistics Park  Feasibility Study y This Project is listed for approval by ADB in 2011,  according to the draft Country Partnership Strategy for  Mongolia. y Project Preparatory Technical Assistance may start in  2010.

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Status of Investment and Technical Assistance Projects Trade Facilitation y MON TA 4: Comprehensive Master Plan for  Development of Zamyn‐Uud  (new to ongoing)  y ADB is planning to include the task of updating the  existing Zamyn‐Uud Master Plan by using the  existing TA contract.

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Status of Investment and Technical Assistance Projects Trade Facilitation y MON TA 5: Regional Logistics Development  (new to ongoing) y ADB's PPTA work is ongoing. y ADB loan may be provided either in 2010 or 2011. 

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Thank you

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