A new page in history turns: Railway foundation set
June 15 (UB Post) Work on building a new rail road began last week. The foundation of the Ukhaakhudag – Gashuun Sukhait railway, located in the Tsogt-Tsetsii Sum of SouthGobi Province, was set last Wednesday.
Since the State gave permission to Energy Resources LLC to begin work on the construction of the railway in 2008, Deutsche Bahn, a German national railway company has undertaken the technical and economic assessment for the construction. Thus the contract between Energy Resources, Energy Resources Rail, the Ministry of Road, Transportation, Construction and Urban Development(MRTCUD), Mongolian Railway and the State Property Committeehas begun.
According to the assessment, the railroad will stretch for 267 kilometers and will be built from the Tavan Tolgoi area to the border point at Gashuun Sukhait, passing through Tsogt-Tsetsii, Bayan Ovoo and Khanbogd sums of SouthGobi Province. The whole railway will have 20 stations and will have the capacity to have 108 trains travelling at the same time. Annually, it is calculated that up to 30 million tons of goods could be transported through this railroad.
A number of officials, including representatives of the concerned organizations and administrations and the Governor of Tsogt-Tsetsii sum, G. Tog-Urnukh, were present during the opening ceremony.
During the opening ceremony for the railway construction, D. Naranpurev, head of the Road and Transportation Strategy Department from the MRTCUD said, “Although railroad transportation in Mongolia is a very important part of our economic growth, its limit in size and service is available only through one company. So there was definitely a need have more investors to the sector in order to have a greater competitiveness and also to extend the current railway system to better serve the companies in need. The idea to have a contract between the State and private companies to build the Ukhaakhudag – Gashuun Sukhait is both beneficial to the State and to the private enterprises - a method used by many developed countries. Also, I think it would be right to acknowledge Energy Resources Rail as the first Mongolian company to develop a railway construction economic assessment, fully prepared and planned in its funding. I trust that the railroad’s construction will be complete within a short time at a high standard.”
During a short interview, the CEO of Energy Resources Rail, L. Oyunbat said “We have generated funding of around USD 800 million for the project by ourselves with the assistance of many international banking and financial organizations without any difficulties. In 2009, a narrowed-down technical and economic assessment was made in cooperation with a German railway company and calculated all the necessary information, ranging from funding, profit and construction.” The banks providing assistance are the European Bank for Reconstruction and Development Bank and the World Bank.
He also elaborated on the conditions of the concession. “First it was agreed that a special permit granted from the State would allow us to use the railway for 30 years after a construction period of 2.5 years. But then this was changed to 19 years and after that 51% of the railway will be transferred to the State.”
According to L. Oyunbat, the management and engineering team will consist of 20 specialists from MVM Rail of Australia and about 40 Mongolian specialists. A total of 600 – 700 direct and 1,000 indirect jobs will be available. “To have qualified employees, our company signed memorandums with the Mongolian University of Science and Technology and the Mongolian Railway Institute,” L. Oyunbat said.
Studies on the impact of families and natural habitats in the close proximity of the soon to be built railway and its accompanying stations were made between 2008 and 2010. Over 1,000 shepherds and locals were interviewed and had their opinions taken into account.
Studies of the life of animals living nearby the railway were undertaken and appropriate changes were made to the project. “The banks we generated our funding from – the European bank for Reconstruction and development (EBRD) and the World Bank – set high standards on the treatment of nature and ecology; and we made sure that sufficient research was made into this and any issues were solved.”
Once the Sainshand – Tavantolgoi – Ukhaakhudag – Gashuun Sukhait railway is built, Mongolia will have a third border exit to the east, besides Zamiin Uud and Erenhot. Also, this railway aims to ease access to the sea. The railway is classified as “heavy-duty, mining” according to Australian and Canadian classification.
The 30 million ton goods travelling on the railroad can generate up to USD 500 million a year.
It has been over 10 years since coal was extracted from Tavan Tolgoi; with the help of about 4,000 coal trucks transporting coal day in and out a total 11 million tons of coal has been exported from Tavantolgoi as of 2011.
Since the State gave permission to Energy Resources LLC to begin work on the construction of the railway in 2008, Deutsche Bahn, a German national railway company has undertaken the technical and economic assessment for the construction. Thus the contract between Energy Resources, Energy Resources Rail, the Ministry of Road, Transportation, Construction and Urban Development(MRTCUD), Mongolian Railway and the State Property Committeehas begun.
According to the assessment, the railroad will stretch for 267 kilometers and will be built from the Tavan Tolgoi area to the border point at Gashuun Sukhait, passing through Tsogt-Tsetsii, Bayan Ovoo and Khanbogd sums of SouthGobi Province. The whole railway will have 20 stations and will have the capacity to have 108 trains travelling at the same time. Annually, it is calculated that up to 30 million tons of goods could be transported through this railroad.
A number of officials, including representatives of the concerned organizations and administrations and the Governor of Tsogt-Tsetsii sum, G. Tog-Urnukh, were present during the opening ceremony.
During the opening ceremony for the railway construction, D. Naranpurev, head of the Road and Transportation Strategy Department from the MRTCUD said, “Although railroad transportation in Mongolia is a very important part of our economic growth, its limit in size and service is available only through one company. So there was definitely a need have more investors to the sector in order to have a greater competitiveness and also to extend the current railway system to better serve the companies in need. The idea to have a contract between the State and private companies to build the Ukhaakhudag – Gashuun Sukhait is both beneficial to the State and to the private enterprises - a method used by many developed countries. Also, I think it would be right to acknowledge Energy Resources Rail as the first Mongolian company to develop a railway construction economic assessment, fully prepared and planned in its funding. I trust that the railroad’s construction will be complete within a short time at a high standard.”
During a short interview, the CEO of Energy Resources Rail, L. Oyunbat said “We have generated funding of around USD 800 million for the project by ourselves with the assistance of many international banking and financial organizations without any difficulties. In 2009, a narrowed-down technical and economic assessment was made in cooperation with a German railway company and calculated all the necessary information, ranging from funding, profit and construction.” The banks providing assistance are the European Bank for Reconstruction and Development Bank and the World Bank.
He also elaborated on the conditions of the concession. “First it was agreed that a special permit granted from the State would allow us to use the railway for 30 years after a construction period of 2.5 years. But then this was changed to 19 years and after that 51% of the railway will be transferred to the State.”
According to L. Oyunbat, the management and engineering team will consist of 20 specialists from MVM Rail of Australia and about 40 Mongolian specialists. A total of 600 – 700 direct and 1,000 indirect jobs will be available. “To have qualified employees, our company signed memorandums with the Mongolian University of Science and Technology and the Mongolian Railway Institute,” L. Oyunbat said.
Studies on the impact of families and natural habitats in the close proximity of the soon to be built railway and its accompanying stations were made between 2008 and 2010. Over 1,000 shepherds and locals were interviewed and had their opinions taken into account.
Studies of the life of animals living nearby the railway were undertaken and appropriate changes were made to the project. “The banks we generated our funding from – the European bank for Reconstruction and development (EBRD) and the World Bank – set high standards on the treatment of nature and ecology; and we made sure that sufficient research was made into this and any issues were solved.”
Once the Sainshand – Tavantolgoi – Ukhaakhudag – Gashuun Sukhait railway is built, Mongolia will have a third border exit to the east, besides Zamiin Uud and Erenhot. Also, this railway aims to ease access to the sea. The railway is classified as “heavy-duty, mining” according to Australian and Canadian classification.
The 30 million ton goods travelling on the railroad can generate up to USD 500 million a year.
It has been over 10 years since coal was extracted from Tavan Tolgoi; with the help of about 4,000 coal trucks transporting coal day in and out a total 11 million tons of coal has been exported from Tavantolgoi as of 2011.
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