The new railway project to construct horizontal railways will be started next April. It has been planned to start to build 260 km railway from Tavan Tolgoi to Gashuun Sukhait border point, while surveys are conducting on the routes to be built further.
The Government of Mongolia made a decision to finance 51 percent of the railways from Tavan Tolgoi to the border and to call for proposal to foreign investors such as Russia, China, and Japan for implementing the project to construct remaining 49 percentages due to allocated funding from the Chinggis Bond for the project was not enough to build whole 260 km railway solely. According to some of local media, Russia has rejected the proposal and considers that the feasible study of the project had not been conducted properly. Likewise, it mentioned “it’s clear that the proposal from Mongolian side was not rational economically” said in the letter from B. Yakunin, President of Russian Railway Company. However, there is no official respond from Russian Government and Prime minister`s foreign affair advisors.
The Parliament of Mongolia ratified the State Policy on Railway Transportation (Railway Policy) in June 2010 and MTZ (Mongolian Railway) had invited international and domestic investors to invest in 49% of New Railway LLC to construct railway from Tavan Tolgoi to the border. 6 domestic investors from 20 companies from 12 countries have been submitted their proposals to invest in the project, till deadline in last week, which seems the project has been attract investors interest. The contract winner will be clear in nearest future after evaluation of submitted materials.
According to the feasibility study, its estimated that USD 5 Billion was needed for 1800 km horizontal railway construction. The selected company is expected to develop, construct, finance and operate a 1800 km of railway infrastructure as per Phase 1 and 2 of the Railway Policy (“New Railway Project”).
In 2013, first USD 200 million, will used for railway construction from Tavan Tolgoi to Gashuunh Sukhait port has been approved by the Government and it will be financed through state-owned Development Bank of Mongolia. Previously, USD 55 million was budgeted for railway project and it’s planned to add USD 200 more millions within this year. The Horizontal railway infrastructure project will be implemented in next three years.
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