The

Development
of Mongolian
Railway
MONGOLIAN RAILWAY
SOSC

CONTENTS

1 NEW RAILWAY
2

PROJECT
2. BOGDKHAN RAILWAY AND ULAANBAATAR
MULTIMODAL TRANSPORT AND LOGISTICS HUB
PROJECT

MONGOLIAN RAILWAY
SOSC

THE NEW MONGOLIAN RAILWAY PROJECT WOULD PROVIDE ACCESS TO GLOBAL SEABORNE
MARKETS VIA SEAPORTS IN CHINA AND RUSSIA, THUS ALLOW HIGHER MARGINS FOR
MINERS

MONGOLIAN RAILWAY
SOSC

STATE RAILWAY POLICY AND ITS ECONOMIC RATIONALE

(million tonn)

MONGOLIAN RAILWAY
SOSC

NEW RAILWAY PROJECT

About MTZ
MTZ is a 100% state-owned company and was established in 2008 to create a national railway company
in connection with the development of the mining sector and to fulfill the need for an efficient railway infrastructure
in Mongolia.
We work on the following areas:

International logistics services;

Construction and operation of railway infrastructure;

Railway transportation services;

Manufacture, assembly and maintenance of railway infrastructure and rolling stock;

Own and manage railway sector property created by the state investment;

Acquisition of locomotives, wagons and other rolling stock.

In early 2013, the Government of Mongolia (GOM) granted the built-operate-transfer (BOT) concession right for
approx. 1800 km of railway infrastructure (New Railway Project or Project) as per the State Policy on Railway
Transportation of Mongolia (2010) to Mongolian Railway State Owned Shareholding Company (MTZ)

MONGOLIAN RAILWAY
SOSC

MTZ has been granted the concession right to develop, construct, finance and operate
approx. 1800 km railway as per Phase 1 and 2 of the State Rail Policy

New Railway Project:

Total length: ~1800 km
CapEx: approx. US$ 8-9 billion
(infrastructure and rolling stock)

Tavan Tolgoi to Gashuun Sukhait (South Line) (~ 267 km),

Tavan Tolgoi to Khuut (~ 918 km),
Khuut to Choibalsan (~ 155 km),
Choibalsan to Ereen Tsav (~ 238 km), and
Khuut to Bichigt (~ 200 km) or to Numrug (~ 380 km)
Nariinsukhait-Shiveekhuren (~31 km).

New Railway Project

MONGOLIAN RAILWAY
SOSC

SOUTHLINE CONSTRUCTION
STATUS

EPC Contractor

Samsung C&T

Owners Engineer

Deutsche Bahn
International

Length
Earthwork
Subcontractors
Construction Duration
Axle load

Major Structures

Throughput Capacity
Manpower & Equipment

MONGOLIAN RAILWAY
SOSC

225 km

13 local company
2013-2016
25 ton

2 stations
5 passing sidings
16 bridges /1356 m/
126 culverts
8 animal passes

30 Mtpa
Over 1000 personnel
Over 400 equipment

SOUTHLINE CONSTRUCTION PROGRESS

Civil and Track Work

27,8%
51,84%
22,04%
2%
2012

Description

2013

2014

Total

Total work
Civil work

Completion

Percentage

Earthwork
Bridge work
Culvert work

11 634 560 m3
1356.23 m
134 no.
Track wor k

10 075 528,96 m3
715.54 m
69.76 no.

86.6
52.76
52.06

Ballast
Fastener

802 880 m3
1 062 674 set

280 499.37 m3
52 177.29 set

34.94
4.91

MONGOLIAN RAILWAY
SOSC

EASTLINE PROGRESS

FEED work :

WORKS IN
PROGRESS
1 Field Study
2
3

Front-End Engineering
Design
/FEED/
Tender
Document

MONGOLIAN RAILWAY
SOSC

PERFORMANC
E
100%

Civil and Track work of

Tavantolgoi Sainshand
route

Completed in Q2,
2014

Civil and Track work of

Sainshand Khuut
route

Completed in Q2,
2014

Civil and Track work of Bichigt

Ereentsav route

Completed in Q2, in
Q2 2014

Signaling &
Telecommunications, Rolling
Stock, Building & Depot

Completed in
in Q2 2014

Tender documents

Completed in
in Q2 2014

100%
100%

PROJECT STRUCTURE
From debt financing perspective: several SPVs respectively for different sections

Given the size of the Project as well as different development status across Projects different sections (i.e. ongoing construction on the 267km Southline, with the remaining sections under technical studies), it is envisioned
to rescale the whole Project into more manageable and less complex individual sub-Projects which are to be
developed under several SPVs

From equity financing perspective: same sponsors for the overall Project

It is envisioned to have same sponsors with consistent shareholding percentages across all the SPVs of the
Project. One way to achieve this is illustrated by the chart below (i.e. the number of SPVs is indicative only):
Investors

MTZ
[51]
%

Equity
Financing
Debt
Financing

[49]%
SPV
100%

SPV 1

Lenders of
SPV 1
MONGOLIAN RAILWAY
SOSC

SPV 2

Lenders of
SPV 2

SPV 3

Lenders of
SPV 3
10

CONSTRUCTION WORK ON SITE 1/2

MONGOLIAN RAILWAY
SOSC

CONSTRUCTION WORK ON SITE 2/2

MONGOLIAN RAILWAY
SOSC

CONTENTS

1 NEW RAILWAY
2

PROJECT
BOGDKHAN RAILWAY AND ULAANBAATAR
MULTIMODAL
TRANSPORT AND LOGISTICS HUB PROJECT

MONGOLIAN RAILWAY
SOSC

13

BOGDKHAN RAILWAY AND ULAANBAATAR MULTIMODAL TRANSPORT AND

LOGISTICS HUB PROJECT
General:
Pursuant to the Resolution No. 110 of the GOM and Order No. 96 of Minister of Road and Transport , Mongolian
Railway SOSC is developing this project in collaboration with the Government of Mongolia and Asian Development
Bank. The proposed project will develop a railway bypass line in the south of Bogdkhan Mountain and an integrated
multimodal terminal which will connect the Bogkhan Railway with New Airport Project and AH-3 Highway.
Legal Basis:

State Policy on Railway Transportation of Mongolia (2010),

Economic and Social Development Plan of Mongolia,
Action Plan 2012-2016 of the GOM.

MONGOLIAN RAILWAY
SOSC

BOGDKHAN RAILWAY AND ULAANBAATAR MULTIMODAL TRANSPORT AND

LOGISTICS HUB PROJECT
Bogdkhan Railway
CapEx: apx US$ 500 million

Rashaant
Station

Ulaanba
atar

UB Multimodal Transport and

Logistics Hub
CapEx: TDB.

Existing Railway
167 km
Bogdkhan Railway
149.1 km
New Airport at
Khushigt
Valley

Maanit
Station
MONGOLIAN RAILWAY
SOSC

LOCATION OF ULAANBAATAR MULTIMODAL TRANSPORT AND LOGISTICS

HUB

UB Logistics
Terminal

New Airport

AH-3 Highway

BOGDKHAN Railway

Ulaanbaatar Logistics Multimodal Transport and Logistics Hub Project will be located at the junction of Bogdkhan
Railway,
AH-3 Highway and New Airport Project, making a new hub project.
MONGOLIAN RAILWAY
SOSC

SIGNIFICANCE OF
PROJECT

Publi
c: problem

Railway:

Decreased
in
the
traffic
Ulaanbaatar city;
for city resident
Increased material will be s
(hazardous
safety
transported
on the railway bypass line);
Soil, Noise and air pollution will
be significantly reduced;
New public transportation route will
be created.

Greater throughput
capacity;
cost
of
Lesser
maintenance
infrastructure and
rolling
stock;
Higher
of
the
railway
speed
design.
transportation
due to
better

PROJECT
Transport and
Logistics:

MONGOLIAN RAILWAY
SOSC

Intensified
traffic
flow
on
railway, highway and airport;
Complex transportation system
to distribute goods and cargos will
be developed;
Greater
ability
of
warehouse
storage service.

CURRENT PROGRESS

Bogdkhan Railway:
GOM approved the implementation of the project.
Alignment has been studied;
Initial financing for the Technical Assistance has been settled between the GOM and Asian
Development Bank.
Ulaanbaatar Multimodal Transport and Logistics Hub Project:
GOM approved the implementation of the project;
Initial financing for the Technical Assistance has been settled between the GOM and Asian
Development Bank;
Master plan of the National Logistics has been developed;
Master plan of the Ulaanbaatar Logistics Center has been prepared;
Guidance of Ulaanbaatar Multimodal Transport and Logistic Center was developed;
Land permit was approved.

MONGOLIAN RAILWAY
SOSC

THANK
YOU
Union Building, 1411, floor, Narnii zam62 Ulaanbaatar 14230, Mongolia
Phone:
(976) 70006622
(976) 70007722
Fax:
(976) 70106644
MONGOLIAN RAILWAY
SOSC

E-mail:
info@mtz.mn
Website:
www.mtz.mn
19