Purevbaatar Luvsandagva, President, Railway Engineering Association of Mongolia

1. “MONGOLIAN RAILWAY ENGINEERING
ASSOCIATION”
“Commencement of railway projects and
exploitation preparedness”
PUREVBAATAR LUVSANDAGVA
President Railway Engineering Association
of Mongolia
Blue Sky convention center
Ulaanbaatar
20.06.2013

2. Part I
Commencement of
railway projects

3. Content
 Legal environment for new railway
construction
 State policy on railway
transportation
 Organizations-participants in
railway transportation
 Railway traffic regulation unified
center

4. Legal environment for new
railway construction
 Parliament Resolution No. 14 on creation of the Railway
Authority-Government Implementing Agency in 2004 was the
starting point systematic and gradual implementation of the
State policy, separation of government and business activities.
 Adoption of the Railway Transportation Law allowed:
1. Created a favorable environment for issuance of special
permits for railway transportation service and certification of
the railway activities / clause 16.1/
2. Financial separation of the activities of railway infrastructure
owners and transporters / clause 19.3/
3. Created an environment for independent control over railway
transportation and traffic control / clause10.3/
4. Created an opportunity for establishment of training and
research institutions / clause 10.4/

5. State policy on railway
transportation
 Was endorsed by Parliament RESOLUTION No. 32 ( June,
2010 )
 Purpose of the State Policy on Railway Transportation:
is to increase the railway capacity to transport and carry,
broaden an Unified National network of efficient state railway
directed at satisfying the ever growing future transport demand
both effectively and reliably, and further, to improve the national
transit capability, advance the legal environment, structure and
organization of the sector, utilize the large mineral deposit,
expedite the national economic and social development
through exporting and exporting after processing, and ensure
sustainable development for the future.

6. State policy on railway transportation
Mongolian Railway State Owned Shareholding Company (MTZ) was issued the
concession right to “build-operate-transfer” railway infrastructures of the stages 1 and 2
as it had been indicated in “STATE POLICY ON RAILWAY TRANSPORTATION” by
Government Resolution No 28. (January 2013)
According to this resolution a state owned company was awarded the right to build and
operate approximately 2000 km of new railway line:
“3.2.2. To be started and built in the first stage (approximately 1100 km in total):
 3.2.2.1. Dalanzadgad-Tavantolgoi-Tsagaan suvraga – Zuunbayan -400 km;
 3.2.2.2. Sainshand – Baruun-Urt -350 km;
 3.2.2.3. Baruun-Urt – Khuut – 140 km;
 3.2.2.4. Khuut – Choibalsan – 150 km.
3.2.4. To be started and built in the second stage (approximately 900 km in total):
 3.2.4.1.Nariinsukhait- Shiveekhuren- 45.5 km;
 3.2.4.2. Ukhaa hudag –Gashuunsukhait – 267 km;
 3.2.4.3. Khuut – Tamsagbulag- Numrug-380 km;
 3.2.4.4. Khuut – Bichigt – 200 km.”

7. LOCATION OF THE MONGOLIA ON THE EUROASIAN SPACE AND
CONNECTION TO THE RAILROUTES OF NEIGHBOURING COUNTRIES

8. Ministry of road and transportation
Unified center of the Railway traffic regulation
Private companiesState-owned companies
“MTZ”
State owned shareholding
company
“UBTZ” joint venture
“Energy Resource” LLC
“BOLD TOMOR EROO GOL”
LLC
“MAK” corporation
Companies with special permits
to build railway infrastructure
Organizations-participants in railway
transportation
www.railway.gov.mn

9. Railway traffic regulation
unified center’s activity
Railway transportation law Article 10.3.
Railway transportation control
department and railway traffic
coordination center shall operate
under the state administration
organization.
Policy: Coordinating railway operations
company

10. Railway traffic regulation
unified center’s activity
The “Railway traffic regulation unified center”-state
budgeted enterprise was created according to
Government Resolution 91 in 2012.
The center will have 3 level tasks depending on activity:
1. Center of control and regulation of the railway traffic
within national railway network
2. Center of control and regulation of the regional railway
traffic
3. Center of management railway traffic within railway
infrastructure

11. Part II
New railway
exploitation
preparedness

12. New railway exploitation
preparedness
 “New railways” Project’s financing
 Licenses
 Special permit
 Summary
 Advise
 Action plan

13. “New railways” Project’s
financing.
 According to Resolution No. 266 from 2011 issued by
Government of Mongolia was permitted to the Board of
Directors (Ch.Khashchuluun) of Development Bank to get
resolved according to accepted regulations the issue of USD
55.0 million financing within 2011 required for the first stage
for implementing of “New railways” Project.
 According to Resolution No. 82 from 2013 issued by
Government of Mongolia was assigned to N.Batbayar,
Minister of Economic Development, task to get received from
the sum of tugriks equal to USD 200 million of the total sum
of tugrik equal to USD 400 million designated to finance “New
railways” Project implementation and permitted to the Board
of Directors of Development Bank (B.Shinebayar) through
Development Bank from the revenue asset received from the
bonds issued by the government in 2013.

14. Licenses
Railway transportation law
Article 10.1.6 issue, extend,
suspend and annul licenses to
some objects and operations
related to railway transportation
safety;

15. licenses to some objects
Railroad and tracks
 Railway stations and junctions,
/towards ferrying/
 Common use track and specific
use
 Artificial construction facilities
(bridges, grudge facilities, culverts,
tunnels and etc.),
 Making Railway fixing,
maintenance, technical
diagnosing, survey;
 Railway crossing
Station
 Common use area and specific
use area
Locomotive unit:
 Locomotive:
 Restoring, firefighting carriages:
Wagon unit:
 All kinds of freight carriages,
 All kinds of passenger carriages,
 All kinds of containers.
Automatic, telemechanic devices
and communication signaling
 Signaling, concentrating and
blocking networks facilities:

16. licenses to some operations
Railway transportation operations,
 Constructions of specific use track and specific use area
 Shipping and unloading,
 Railway freight forwarder
 Operation of infrastructure;
 Railway station activities;
 Inspection and maintenance service of locomotives and carriages;
 Production and sale of instruments and tools requiring strict use
equipment and devices,
 Working out Railway technical drawings and projects; /Pre-Feasibility,
Detailed Feasibility Study/
 Fixing and maintenance of upper and base structures of railways
designated for specific uses,
 Railways signaling, concentrating, inhibition and communication networks’
facilities fixing and technical maintenance,

17. Special permit
Railway transportation law Article 16.1. Special
permit for railway transportation services
/hereinafter “special permit”/ shall have the following
types:
 16.1.1. Construction and Use of basic structure;
 16.1.2. Manufacturing, assembling and maintenance
of basic structure and operations
 16.1.3. Conducting railway transportation activity

18. Parts of Special permit
Д/д Part of Special permit
1
Basic structure
Construction
2 Use
3 Manufacturing
4 Assembling
5 Maintenance
6
Locomotive and
Wagons
Manufacturing
7 Assembling
8 Maintenance
9 Operations, transportation activity

19. Owned by special permit
organzations
 To founded by the Intergovernmental agreement in 1949 of
Mongolian-Russian “Ulaanbaatar railways” Shareholding Society, -
by the Special permit of construction, use and other
 Was endorsed by Government RESOLUTION No. 134 ( 2008 ) “Bol
Tumur Euruu Gol” LLC by the Special permit of construction
 Was endorsed by Government RESOLUTION No. 121 ( 2012 )
“Mongolian railways” State Owned Share Holding Company by the
Special permit of construction
“Policy to be observed by Government on railway transport” approved by
Odred No. 28 from 2013 issued by the Government Concession for
constructing the railroad base structure “construction-exploitation-
transferring” in the 1st and 2nd stage of implementing the Project is
granted on to “Mongolian railways” State Owned Share Holding
Company.

20. Owned by basic structure
Railway transportation law Article 6.2. Basic structure of
national economic and social high importance can be
owned by the state or legal body where the dominating
share is owned by the state or it can be used for certain
period of time to be later shifted back to the ownership of
state. The Government shall determine guidelines for such
basic structure and railway lines.
Railway transportation law Article 19.3. If basic structure
owner conducts railway transportation activity financial
settlements shall be kept separately for basic structure and
transportation activities.
This case can be implement ting 51% State owned and 49%
privately owned railway company
Төмөр замын суурь бүтэц эзэмших аж ахуйн нэгж
байгууллагыг төрийн 51%, хувийн 49%-ийн
өмчлөлтэйгээр байгуулах

21. Transporter
 18.1.“Stakeholders in transportation activity” include economic
entities, organizations and individuals, who are owners of
basic structure, common and specified use tracks and areas,
and transporters responsible for conducting transportation
activities in compliance to railway transportation safety
regulations, railway transportation legislations and railway
transportation general set of rules respectively.
 18.2. Stakeholders in transportation activity shall make a
contract with other organizations engaged in transportation
activity as stated in provision 15.1.15 of this law and separate
and determine scopes of operation and duties in accordance
to railway transportation general set of rules.
This case can be implementing new railway operation
company by the shareholder Төмөр замын тээвэрлэлтийн
үйл ажиллагаа эрхлэх аж ахуйн нэгж байгууллагыг
төрийн оролцоогүйгээр хувьцаат компани хэлбэрээр
байгуулах

22. Summary

23. CATEGORY OF RAILTRACK AND CONSRUCTION PHASE
DIRECTION of RAILROADS KM Axle
load tn
Capacity
bln tn
Standarts
Sukhbaatar-Zamiin-Uud 1111 23.5 21.0 19.0
Choibalsan-Ereentsav 238 23 2.00.1
Nariin suhait-Shivee huren 50 27 15.0 Heavy haul standart Wagon 80 tn
Nariin suhait-Tavantolgoi 500 25 20.0
Uhaakhudag-Gashuun suhait 267 27 30.0 Heavy haul standart Wagon 80 tn
Tavantolgoi-Tsagaan suvarga 250 25 30.0
Tsagaan suvarga-Zuunbayan 150 25 30.0
Sainshand-Baruun-Urt 350 25 30.0
Baruun-Urt-Hoot 140 25 30.0
Hoot-Choibalsan 150 25 15.0
Hoot-Bichigt 200 27 15.0 Heavy haul standart Wagon 80 tn
Hoot-Nomrog 380 25 15.0
Total 2437

24. MULTINET OF TRANSORTATION IN EAST ASIA AND PACIFIC

25. Төмөр замын тээврийн аж нэгж, байгууллага
компани байгуулхад анхаарах зүйлс
 conforming to relevant Mongolian legislations;
 Being provided by appropriate competent
personnel;
 Getting arranged by foreign investment or share
holding company forms;
 Adopting progressive new techniques and
technology conforming to further development
tendencies;
 Adopt the standard norm where allocated 2 km
per person for railroad fixing and maintenance;

26. Advise
 Locomotive and carriage rent
assessment values,
 Selecting one transport service provider
jointly by participants of business,
 Selection of locomotives and rolling
stocks (carriages),
 Technical fixing and maintenance
service system,
 Supervision and approval of safety,

27. ТӨМӨР ЗАМЫН ЦОГЦОЛБОРЫН
ТООЦООЛСОН БАЙРЛАЛ

28. Action plan
1. Founding of company, /share holder,
ownership/
2. Pre-Feasibility Study,
3. Resolve the issue of Land Permission,
4. Detailed Feasibility Study/Establish Board of
Director in its final state,
5. Obtain all necessary Licenses of Special
Permission,
6. Arrange IPO/attract investors.

29. THANK YOU FOR
ATTENTION