The Development of

Mongolian Railway

MONGOLIAN RAILWAY SOSC

CONTENTS

NEW RAILWAY PROJECT

2. BOGDKHAN RAILWAY AND ULAANBAATAR MULTIMODAL

2 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 work

Total

Completion

Percentage

10 075 528,96 m3

86.6

715.54 m
69.76 no.

52.76
52.06

Civil work
Earthwork

11 634 560 m3

Bridge work
Culvert work

1356.23 m
134 no.
Track work

Ballast

802 880 m3

280 499.37 m3

34.94

1 062 674 set

52 177.29 set

4.91

Fastener

MONGOLIAN RAILWAY SOSC

EASTLINE PROGRESS

FEED work :

WORKS IN PROGRESS

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

PERFORMANCE

Field Study

100%

Front-End Engineering Design

/FEED/

100%

Tender Document

100%

MONGOLIAN RAILWAY SOSC

Civil and Track work of

Tavantolgoi Sainshand route

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):
MTZ

Investors

[51]%

Equity
Financing
Debt
Financing

[49]%
SPV
100%

SPV 1

SPV 2

SPV 3

Lenders of SPV 1

Lenders of SPV 2

Lenders of SPV 3

MONGOLIAN RAILWAY SOSC

10

CONSTRUCTION WORK ON SITE 1/2

MONGOLIAN RAILWAY SOSC

CONSTRUCTION WORK ON SITE 2/2

MONGOLIAN RAILWAY SOSC

CONTENTS

NEW RAILWAY PROJECT

BOGDKHAN RAILWAY AND ULAANBAATAR MULTIMODAL

2 TRANSPORT AND LOGISTICS HUB PROJECT

MONGOLIAN RAILWAY SOSC

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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

Ulaanbaatar

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

Public:

Railway:

Decreased traffic problem in

the
Ulaanbaatar city;
Increased safety for city residents
(hazardous material will be 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;

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

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 zam-62
Ulaanbaatar 14230, Mongolia
Phone:
(976) 70006622
(976) 70007722
Fax:
(976) 70106644
MONGOLIAN RAILWAY SOSC

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