The Parliament of Mongolia ratified the State Policy on Railway Transportation (Railway Policy) in June 2010. The Railway Policy concluded to construct approximately 5,600 km of railway infrastructure in 3 phases in an effort to extend the unified railway network, utilize large mines, and export commodities from those mines.
The Government of Mongolia granted, via Resolution No.121 of 2012, the construction license for Phase 1 and 2 of the Railway Policy to Mongolian Railway State Owned Shareholding Company (“MTZ”), and also the Government granted, via Resolution No. 28 of 2012, the build – operate – transfer (BOT) concession right for Phase 1 and 2 railway base structure to MTZ.
The government decided to set up New Railway LLC, with participation from domestic and international investors to implement the railway project through public partnership concession scheme. The company is expected to develop, construct, finance and operate a 1900 km of railway infrastructure as per Phase 1 and 2 of the Railway Policy (“New Railway Project”). MTZ completed the Business Case Study for New Railway Project which includes the following routes:
- Tavan Tolgoi – Sainshand (450 km;)
- Sainshand – Baruun-Urt (350 km);
- Baruun-Urt – Khuut (140 km);
- Khuut – Choibalsan (150 km);
- Khuut – Bichigt (200 km);
- Khuut – Numrug (380 km);
- Tavan Tolgoi – Gashuunsukhait (267 km);
The capital expenditure cost estimate is approximately USD 5.2 billion, under BOT terms, as per the MTZ Business Case Study. The state owned Mongolian company MTZ has invited international and domestic investors to invest in 49% of New Railway LLC.