Mongolia Brief June 26, 2014 Part II
From Bad to expensive?
June 26
(Mongolian Economy) It was six or seven years ago when Mongolia first set out
to build 1,800 kilometres of new railway to increase the volume of exports to
China.
The issue became hugely political, however, and even though the matter
was considered settled in 2010 – after the State Great Khural barely passed a
strategy for rail development – some issues remain unresolved.
The 2010 rail
policy proscribes 400 kilometres of rail between Dalanzadgad, Tavan Tolgoi,
Tsagaan Suvarga and Zuunbayan; 350 kilometres between Sainshand and Baruun-Urt;
140 kilometres between Baruun-Urt and Khuut; and 150 kilometres between Khuut
and Choibalsan. But construction never launched in 2010 as it was supposed to,
with very little explanation as to why. Parliamentarians blame investment
challenges.
Although the
initial phase of the project has yet to kick off, some work for the second
phase has launched. The second phase includes the construction of small spurts
or rail, such as 45.5 kilometres between Nariinsukhait and Shivee Khuren; 267
kilometres between Ukhaakhudag and Gashuun Sukhait; 380 kilometres between
Khuut and Tamsagbulan; and 200 kilometres between Ukhaa Khudag and Gashuun
Sukhait. The excavation of 267 kilometres of rail between Ukhaa Khudag and
Gashuun Sukhait launched last year.
However,
crucial details such as how ownership should be divided, the costs, and what
specifications should be used are still matters for debate.
Ownership
The government
announced an open international tender bid in 2009 for a contract to lead the
railway construction project. That contract was awarded to Mongolian Mining
Corporation, which owns the Ukha Khudag mine.
But another
tender was announced in 2012 that invited seven companies from Australia, China
and South Korea to participate. South Korea’s Samsung C&T Corporation
eventually won the contract to lead the construction of 267 km railway between
Ukhaa Khudag and Gashuun Sukhait. Another 12 Mongolian companies are assisting
in the construction. Mongolian Mining received compensation from the government
for the lost tender.
According to a
preliminary estimate, construction will require USD 5.2 billion in total. That
is a sum greater than the annual budget. Investment is the only option left to
finance the project. However, the government will have to be clear about its
relationship with its partners.
Former
President of the Russian Federation’s Republic of Kalmykia Kirsan Nikolayevich
Ilyumzhinov has expressed interest in investing in the project. Ilyumzhinov, a
millionaire who held office from 1993 to 2010, has promised to invest up to USD
1.6 billion for the project.
“If we could
sign the agreement soon, we are willing to start the construction work,” he
said. Ilyumzhinov plans to establish a consortium for the project, including
Spain’s Uchi Yel - one of the world’s top 10 railway builders that has
constructed more than 6,000 kilometres of rail in countries such as the United
States and China.
Ilyumzhinov has
also invited Canada’s Bambarde and Rau Ji De to join the consortium, in
addition to companies from Russia, France and Britain. He is also interested in
working with Russian Railways (RZD). All that is left is to draw up a
shareholder agreement with the Mongolian government.
Costs
Mongolia
Mining’s Ukha Khudag mining subsidiary Energy Resource launched construction of
the railway between Tavan Tolgoi and Gashuun Sukhait. The Mongolian Railway
Engineering Association (MREA) says it has repeatedly notified officials at the
Ministry of Road and Transport of the USD 2 million per kilometre of rail price
tag for construction between Gashuun Sukhait and Tavan Tolgoi.
But according
Mongolian Railway project director A. Zorig, that is not enough. “The cost
Energy Resource [planned to] spend for the project construction ranged from USD
2.5 million to USD 3.2 million per kilometre,” he said.
The MREA
estimate would not provide a rail with a load capacity large enough for the
freight Mongolia plans to deliver by rail, Zorig said.
Gauge
Although
construction has already begun in some places, a critical issue remains
unresolved: should Mongolia build its rail using the standard gauge used in
China or Russia’s broad gauge? Although the 2010 policy strategy calls for the
broad gauge, the issue is set to be discussed once again after the Khural
recommences for the spring session.
Politicians
have argued hardest over the gauge issue. Many argue the broad gauge that is
standard in Russia is not practical for use since most exports will be heading
for China, which uses an incompatible, narrow gauge.
MREA argues
that the narrow gauge is the standard in most countries, excluding a few
countries such as Spain. Still, there is little justification for using the
broad gauge preferred by Russia, says the Association, and installing rails
with both gauges looks unfeasible.
Not
surprisingly, Ilyumzhinov argues Mongolia has more to benefit from the use of
the broad gauge because Mongolia should not be placing even more dependence on
China. Using the broad gauge would likely be costly, however. Transit via a
broad-gauge rail includes an additional cost of USD 2 per tonne once goods
reach the Chinese-Mongolia border, said Zorig. That adds to a sum total loss of
USD 50 million for 25 million tonnes of annual coal shipped to China – which is
the maximum capacity allowed for current rail plans.
Prime Minister
Norovyn Altankhuyag paid an official visit to China last year where he signed a
contract to provide 50 million tonnes of coal a year. How Mongolia could
possibly deliver on this promise with a capacity of only 25 million a year is
anybody’s guess. Mongolia’s rails will also require more railway junctions, or
at least another rail heading north.
If these issues
are ignored and Mongolia simply moves forward with the current plans, today’s
bad situation will likely grow worse – and more expensive.
“White Nights in Leningrad” Solo Exhibition Opened
June 26
(infomongolia.com) Solo exhibition themed "White Nights in Leningrad"
by artist B.Otgontuvden, teacher at Repin Academy of Fine Arts, Saint
Petersburg, Russia, has been opened at the 976 Art Gallery in Ulaanbaatar to
continue from June 25 to July 08, 2014.
The city of St.
Petersburg formerly known as Leningrad is famous for it’s an annual
international arts festival during the season of the midnight sun that normally
lasting from June 11 to July 02.
The White
Nights Festival consists of a series of classical ballet, opera and music events
and includes performances by Russian dancers, singers, musicians and actors, as
well as famous international guest stars.
Related:
‘White
Nights of Leningrad’ Welcomes Visitors – Montsame, June 26
Water Consumption Tariff in Ulaanbaatar City to Be Raised
from July 01, 2014
June 26
(infomongolia.com) On June 13, 2014, the Capital City Water Supply and Sewage
Service Regulatory Board held its regular meeting and resolved to change the
tariff of water usage after consultation with Agency for Fair Competition and
Consumer Protection.
Officials say
the decision was made following a study that aims to cover the costs and bring
quality services to customers and in Ulaanbaatar city, a housing potable water
usage for 1 L is set at 0.48 MNT (Tugrug) and waste water consumption at 0.24
MNT per liter respectively, which will be effective from July 01, 2014.
Currently, utility bills for potable water costs 0.32 MNT per liter and 0.15
MNT for waste water.
In addition, in
order to ensure customers with uninterrupted water supply for 24 hours and to
cover costs for this service, a monthly fee of water usage is set at 2,500 MNT
per household in Ulaanbaatar city and residents of Baganuur and Nalaikh
Districts of Ulaanbaatar and Tuv Aimag will pay a monthly fee of 1,800 MNT.
Moreover,
drinking water rates for industrial enterprises in Ulaanbaatar city are also
changed from 0.91 to 1.20 MNT and waste water from 0.60 to 1.50 MNT per liter.
Good Country Index 2014: Mongolia
June 26
(infomongolia.com) International experts and scholars have released the First
Good Country Index 2014 to measure what each country on earth contributes to
the common good of humanity, and what it takes away.
Using a wide
range of data from the U.N., the World Bank and other international
organizations, each country is given a balance-sheet to show at a glance
whether it’s a net creditor to mankind, a burden on the planet, or something in
between.
The Good
Country Index 2014 surveyed a total of 125 countries in Science and Technology,
Culture, International Peace and Security, World Order, Planet and Climate,
Prosperity and Equality, and Health and Wellbeing categories, where Mongolia is
ranked at the 109th place after overall scores collected.
Mongolia -
Overall Ranking 109th
Science and
Technology - 62
Culture - 96
International
Peace and Security - 38
World Order -
114
Planet and
Climate - 101
Prosperity and
Equality - 50
Health and
Wellbeing – 121
Mongolia to Exploit 30 Tons of Gold in 2014
June 26
(infomongolia.com) The regular monthly "Transparent Mining" press
conference hosted by the Ministry of Mining of Mongolia was held on June 25,
2014 and during the meeting the following report was presented.
- The new
standards for "Coal Category MNS 6456:2014" and "Coal and
Charcoal Products Category MNS 6457:2014" have been registered and entered
into force from June 12, 2014. These standards are determined and submitted by
experts, engineers and professional associations of Mongolia after comparison
studies of standards being developed by United States, Australia, China and
Russia in accordance with international norms.
- In order to
decrease fuel supply dependence, new contracts to import fuel have been made
based on international stock market price. As a result of this action, a total
volume of fuel to import from Russia is reduced from 92% (in 2012) to 77% this
year or 15 weight percent. Also, the share of imports from "Rosneft"
Company is reduced to 2-3 times or 30%.
- In 2014,
Mongolia expects to mine over 30 tons of gold in legal frames that would
contribute to the Central Bank’s foreign currency reserve with revenue of about
one billion USD.
- As of May
2014, Mongolia’s production of copper concentrate reached 397.1 thousand tons,
molybdenum production 1.5 thousand tons, gold 2.0 tons, coal 10.0 million tons,
fluorspar 116.2 thousand tons and iron ore 1.8 million tons respectively. In
addition, crude oil production is at 2,736 thousand barrels.
- As of June
24, 2014, an average reserve volume of petroleum products is 36 days
nationwide, of which A-80 grade gasoline for 41 days, AI-92 - 43, Diesel - 33
and TC-1 for 27 days.
Training for Experts on HIV/AIDS and TB Statistics Runs
Ulaanbaatar,
June 26 (MONTSAME) With an aim to upgrade a quality of statistical information
on health, the first-phase training commenced Monday in the Ministry of Health.
This training
has involved 35 HIV/AIDS and tuberculosis experts from 15 provinces. They have
been given information about the latest models of official documents used in
health organizations, also their knowledge and professional skills are being
refined. Ways of accelerating are also touched upon of the H-info 3.0 software
in health statistics.
The trainees
are to hold training-seminar on these matters in their job places and to give
reports to the Health Development Center about it.
The training
will last until Friday, a second phase of the measure will run June 30 to July
4.
Credit Agreement to Be Established with Vnesheconombank
Ulaanbaatar,
June 26 (MONTSAME) An irregular cabinet meeting on Thursday authorized the
Representative Leading Board of the Development Bank of Mongolia (DBM) to
establish a credit agreement of USD 75 million with Russia’s Vnesheconombank.
The money will
be exploited for purchasing a turbine-generator of 100MWatt to be installed in
the #4 thermal power station of the city. Earlier, a contract was established
on financing the project about augmenting the power station’s capability and
regulating a repayment in order to raise a necessary capital for the project,
and the project’s financing is being collected through relevant construction
contracts and the project performances. For the time being, 48.5 million USD
has been given to the project.
Cabinet Backs Draft Amendments
Ulaanbaatar,
June 26 (MONTSAME) At its irregular meeting, the cabinet backed draft
amendments to the laws on customs tariff, customs tax, on VAT.
As the cabinet
decided, these amendments will be submitted to the State Great Khural
(parliament).
Minister Invited to Asian Games
Ulaanbaatar,
June 26 (MONTSAME) A South Korean delegation led by the Incheon Asian Games
Organizing Committee executive president Kim Young was received Wednesday by
Culture, Sport and Tourism Minister Ts.Oyungerel.
The Minister
explained efforts to take part in the Games with as many as possible athletes,
and asked the Committee head to render support in matters relating to visa
issuance and accommodation payment of the Mongolian athletes and their
families. A forty percent of the team are women, she noted.
In return, Mr
Kim promised a support for the above issues and invited the Minister to the
opening ceremony of the Asian Olympic Games scheduled in Incheon, South Korea
from September 19 to October 4, with 439 events in 36 sports and
disciplines set to feature in the Games.
He also noted
that his committee is paying a particular attention to promotion of friendship
and equality matters rather than fiercely fighting for victory.
Incheon was
awarded a right on April 17 of 2007, defeating Delhi, India to host the Games.
Incheon is the third city in South Korea after Seoul (1986) and Busan (2002) to
host the Asian Games. The Mongolian athletes have taken part in the Asian Games
since 1974. This time, Mongolia applied to the S.Korean Organizing Committee
with a participation request for 340 athletes in 25 sports.
Health Minister Meets Sante Sud Director
Ulaanbaatar,
June 26 (MONTSAME) Health Minister N.Udval received Thursday Mr Simon Martin, a
director of Program Department of Sante Sud NGO of France.
Mr Martin was
accompanied by team members of "Organizational Development Policy"
project which is taking place in Arkhangai province.
The Minister
thanked Sante Sud for its successful realization of a series of health projects
and programs in Mongolia, which have been contributing greatly to organizational
development of local health bodies. Noting that similar projects have been
sought after in other provinces, she shared views with Mr Martin about further
cooperation between her Ministry and Sante Sud.
Sante Sud is a
non-governmental organization headquartered in Marseilles, France. It works
with international solidarity and specializes in the training of local human
resources and the promotion of development projects. It actions are based on
the understanding of local needs, the exchange of knowledge and experiences,
and the close collaboration between policy makers and health care workers in
the field. Today, Sante Sud has programs in Africa (Mali, Madagascar,
Mauritania, and the Central African Republic), in the Mediterranean area
(Algeria, Tunisia, and Lebanon) and in Asia (Mongolia).
Citizens of 42 Countries Travel Mongolia Visa-Free between June 25, 2014 and December 31, 2015
June 26
(infomongolia.com) The Government of Mongolia at its regular Cabinet meeting
resolved to allow citizens of 42 countries to enter Mongolia visa-free in the
frameworks of Government Action Plan to boost the country’s economy.
According to
decision, the new regulation is effective from June 25, 2014 until December 31,
2015, where above mentioned citizens can travel Mongolia visa-free up to 30
days with tourist and business purposes.
Moreover, the
Ministry of Foreign Affairs of Mongolia advises foreign citizens to inform
their local relevant authorities regarding new regulations prior traveling Mongolia
and wait for confirmation, if necessary to request updates on databases and if
a visa is required to stay in Mongolia for more than 30 days, Mongolian Diplomatic
Offices abroad are ready to serve promptly.
Related:
42
Countries Can Travel Mongolia without Visa – Montsame, June 26
Mongolia Is Measles-Free Country Certified by World Health Organization
June 26
(infomongolia.com) Mongolia began to immunize its population with a vaccine
against the measles or Ulaan Burkhan disease in Mongolian since 1973.
As a result
from the last 40 years, the World Health Organization (WHO) presented a
Certificate verifying that Mongolia completely prevented the measles disease.
The Certificate
conferring ceremony was held in Ulaanbaatar today on June 26, 2014, where
Director of the Division of Combating Communicable Diseases at the WHO in the
Western Pacific, Dr. Mark Jacobs handed over the Certificate to Prime Minister
of Mongolia N.Altankhuyag.
During the
ceremony Dr. Mark Jacobs noted, “In the region, only Australia, Macau, Mongolia
and South Korea out of 37 countries could prevent the spread of this disease
and this action does not depend on a country development level, only
immunization procedure results and right system would achieve a positive
result”.
The Prime
Minister said, "As a result of 40 years immunization taken against measles
spread, Mongolia becomes the country of measles-free and this is a great
contribution of our health sector’s authorities, doctors, medical staff as well
as nurses”.
In 1940,
Mongolia became the first nation in Asia to eradicate Smallpox infectious
disease or Tsagaan Tsetseg disease in Mongolian language and the WHO certified
Mongolia with polio-free accreditation in 2000.
Related:
Certificate
Granted for Total Elimination of Measles – Montsame, June 26
Conference to Run for Small and Medium Enterprises
Ulaanbaatar,
June 26 (MONTSAME) Small and medium enterprise owners operating in the city
will convene in the Civil Hall this Friday.
At the
conference, the gathered will earn knowledge about a procedure of the
foundation for small- and medium-sized industries, pass to the city authorities
their opinions on the procedure, share views about it with each other.
The procedure
of the foundation aims at supporting increased and environment-friendly
production of small and medium enterprises. It also offers soft, flexible loans
and financial trust services to those business people.
The opinions of
350 entrepreneurs will later be included in a municipal industrialization
support program.
Meeting on Environmental Health Held
Ulaanbaatar, June
26 (MONTSAME) "Environmental health: Current issues in Mongolia and South
Korea" named meeting has been co-organized by the National Center of
Social Health and the School of Social Health at the National University of
Medical Sciences.
The action has
gathered 22 experts from South Korea, headed by Mr Jin Heon Lee, the president
of the Environmental Health Society of South Korea.
Seven reports
have been delivered on urgent problems of environmental health in Mongolia and
South Korea and on related researches. A small exhibition of posters has been
mounted, and the best poster has been selected as well.
The
participants also considered risky factors of environmental health, and decided
to expand the Mongolia-Korea collaboration in researches, in human resources
promotion and training.
Due to increase
in density in urban areas and high development of techniques and technologies,
the air, waters and soil have been polluted, becoming one of the urgent
problems around the world. It has been confirmed that the environmental
pollution increases risks of diseases and illnesses by 20-30%.
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