USD 270 Million for New Airport Is Not a Burden on State Budget
Parties have tentatively agreed on constructing an international airport in Khushig valley in Tuv aimag at the soft loan, provided by Japanese International Cooperation Bank. In order to use this asset, the Government of Mongolia should negotiate with the parliament on the Loan Agreement on A Project to Construct International Airport in Ulaanbaatar. Yesterday Budget Standing Committee Meeting discussed Loan agreement. However members did not hide their cautiousness on some issues. USD 270 million loan is to be taken for the construction of the new international airport. If the term is 40 years, interest rate per annum shall be 0.2 percent. Members appreciated 10-year interest payment-free condition. They support effective use of loan, though they worry about potential oppression under foreign loans. But representative of Ministry of Finance suggests “Such thing will not happen”. This loan, which is going to be provided by Japan, is the softest one in comparison to other loans that Mongolia had and going to have. Even the expert said Mongolia is released from any loan pressures. Moreover, Mongolia’s foreign loan is estimated at USD 1.7 billion. Many countries consider that it exceeds the warning level when it it is more than 40 percent of the GDP. Mr. Ch.Ulaan, Head of Budget Standing Committee and Minister of Finance said there was not any scene like that. Khushig valley is located 61 km of the capital city.
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