“MONGOLIAN RAILWAY” STATE OWNED SHAREHOLDING COMPANY
"In accordance with Resolution No. 82 issued by the Government of Mongolia on March 5, 2008, a state-owned legal entity was established to oversee and manage assets funded by the state budget within the railway sector and based on this resolution, Mongolian Railway is a state-owned national company established by Resolution No. 189 dated March 20, 2008 of the State Property Committee.
Currently, the company operates from its headquarters and various stations, including Tsogttsetsii and Tumurtei, along with a regional logistics center in Zamyn-Uud. With a workforce of over 550 employees, the company plays a vital role in implementing the government's railway transportation policy and ensuring efficient management and organization of the national railway infrastructure.
It operates in conjunction with affiliated and subsidiary companies such as 'Tavantolgoi Railway' LLC, 'Shiveekhuren Railway' LLC, 'Mongolian Port Group ' LLC, Artssuuri-Nariinsukhait-Shiveekhuren Railway' LLC, and ‘Choibalsan-Khuut-Bichigt Railway' LLC.
The draft resolution, issued to Mongolian railway SOSC, has been officially approved that the concession right to build, operate, and transfer for 426.6 km of the east vertical or Choibalsan-Khuut and Khuut-Bichigt railways and 1255 km of the western vertical or Artssuuri-Shiveekhuren-Nariinsukhait railway were approved by the Resolution No. 28 of The Government of Mongolia of 2013.
As for the 416.1 km Tavantolgoi-Zuunbayan railway, the superstructure of construction was completed and the first commercial train was tested.
Zuunbayan railway LLC was established at the cabinet meeting. Erdenes-Tavantolgoi JSC will own 66% of Zuunbayan Railway LLC, with Mongolian railway SOSC owning 34%.
The first 50 kilometers of rail track the 414.6-kilometer Tavantolgoi-Zuunbayan railway was installed.
The Government of Mongolia approved the Resolution no. 135 “Measures for Tavantolgoi – Zuunbayan railway project” on 10th April 2019.
“Mongolian Railway” SOSC (MTZ) and “Mongolia mining properties management” LLC (Mongolia MP management), which is fully invested by “Inner Mongolia mining asset management” Co., Ltd from the Inner Mongolia Autonomous Region, People’s Republic of China established “Mongolian port group” LLC. MTZ has 51% and Mongolia MP management has 49% of the company.
MTZ had the special rights to build “Tavantolgoi-Gashuunsukhait” railway base infrastructure dated 8th August 2018. It’s cancelled and granted the special rights to build “Tavantolgoi railway” company for 5 years by the Resolution number of 242 of Government of Mongolia.
Resolution No. 232 of the Government of Mongolia dated 1st August 2018 ratified joint company “Nariinsukhait-Shiveekhuren railway” intensifying railway construction of Shiveekhuren-Sekhe border checkpoint to operate in 2019.
As the result of the International Consultative Meeting, a recommendation paper was developed, which says that the eastern railway corridor will make a significant contribution to the regional development of Russia, Mongolia and China by creating transit route between Russian and Chinese railway networks, create the shortest freight corridor between neighboring countries connecting Asia to Europe, improve regional trade and economic cooperation of the three countries and enable commercial utilization of Mongolian eastern mining deposits
Preliminary Feasibility study ofWagon Factory Project was completed. Ukrainian Techwagonmash company has submitted a comprehensive introduction on the wagon maintenance and assembling factory, which was reflected in the preliminary feasibility study. This project was supported by the Ministry of Road and Transport development and MTZ SOSC and UBTZ JVC jointly started wagon assembling project headed by MRTD on 4 May 2017 accoriding to the Resolution Nr. 83.
Preliminary feasibility study of Nariinsukhait – Shiveekhuren railway was completed Preliminary feasibility study of Nariinsukhait – Shiveekhuren railway was conducted by engineers and specialists of Mongolian Railway SOSC.
Preliminary assessement of economical feasibility of Ereentsav – Choibalsan – Khuut – Bichigt railway, the Eastern Vertical Corridor The works to develop a financial modeling by project investment vesions and a modeling to predict results of research for freight amount of national, international and transit freight by 30 years dynamic and preliminary assessment of feasibility study for Ereentsav – Choibalsan – Khuut – Bichigt railway, Eastern vertical corridor has been conducted.
Assessement of economical feasibility of Khuut – Bichigt railway MTZ SOSC calculated its financial benefit by developing financial modeling considering freight amount in near future and estimated investment. Freight amount within 100 km from Khuut – Bichigt railway considering deposit capacity of the legal entities, special licenses andminiral reserves of Dornod and Sukhbaatar province.
The Standing Committee on Economy of Parliament discussed Resolution draft of “Actions to implement State Policy on Railway Transport” and amendment to include Zuunbayan – Khangi railway to this resolution on 25-27 January 2017. Parliament of Mongolia discussed amendments to State policy on Railway transport to include Zuunbayan – Khangi railway which was supported by the Standing Committee on Economy of Parliament and resolution draft of Action to implement State policy on railway transport on 25-27 January 2017.
Order Nr. 6 of Deputy Prime Minister of Mongolia, 13 January 2017 A working group headed by Deputy Minister of Road and Transport Development was established within the purpose of intensifying biletrial trade and economic cooperation and implementation of the Tianjin Logistics and Transport project in Dunzian free trade zone of Binhai new area of Tiajin city of PRC.
MTZ and CREC of PRC signed a Memorandum of Understanding within the frame of Zuunbayan – Khangi, Khuut – Choibalsan railway. MTZ and CREC of PRC signed a Memorandum of Understanding within the frame of Zuunbayan – Khnagi, Khuut – Choibalsan railway in December 2016 and a preliminary research for feasibility study was submitted in December 2017.
Zuunbayan – Khangi railway project was approved by the Government of Mongolia on 21st December 2016 and Government Note 61 was published. Action plan of the Government of Mongolia for 2016 – 2020 was approved by the Parliament Resolution 45 on 9th September 2016 and its subclause 2.144 reflects that “Consturction work of Zuunbayan – Khangi will be started”. The content of the Parliament resolution for “Actions to implement the State Policy on Railway Transport” was approved by the Ministry of Road and Transport Development and Ministry of Justice and Home Affairs in September 2016 and following that resolution a working group headed by the Minsiter of Road and Transport Development was established in December 2016.
Received the midterm report of Khuut – Numrug railway project in May 2016. Strategy Implementation Administration of Changchun, Jilin and Tumen-Gol of Jiling, PRC financed the preliminary feasibility study of Khuut – Numrug railway which was conducted by China Railway Design Corporation. The midterm report of the feasibility study was introduced in May 2016.
Joined OSJD in April 2016 Mongolian Railway SOSC submitted a request to join as an affiliated member of Organistaion for Co-opertaion between Railways (OSJD) on 8th Spetember 2015 and membership request of Mongolian Railway SOSC was approved by Generel Directors meeting in 25-29 April 2016.
Government Resolution 77 on 1st Febraury of 2016 33.4km railway from Tumurtei deposit in Khuder soum, Selenge province to Khandgait Station of Boldtumur Eruu Gol LLC and its terminal were transferred to MTZ SOSC. MTZ SOSC started transport operations on 3rd April 2016 and 1.7 million tons of iron ore has been transported as of 1st quarter of 2018.
A working group to develop a preliminary research on the feasibility of Zuunbayan – Khangi railway was established according to the A/64 Resolution of Chief Executive Officer of Mongolian Railway SOSC on 22nd December 2015. Mongolian Railway SOSC developed a preliminary research on the feasibility of Zuunbayan – Khangi railway and it was supported by the Ministry of Road and Transport Development in September 2016.
Memorandum of Understanding on 21 July 2015 Memorandum of Understanding to conduct feasibilty study, develop engineering design and calculation, finance construction work and operate, transfer and own base structure of Nariinsukhait – Shiveekhuren railway was signed between Mongolian Railway SOSC and Mongolian Alt LLC.
Memorandum of Understanding on 22 May 2015 Memorandum of Understaning for the implementation of Khuut – Numrug railway project was signed on 22 May 2015 with the Administration of Hyangan province of Inner Mongolia and the Strategy Implementation Administation of Changchun, Jilin and Tumen-Gol of Jiling, PRC. с
Memoradum of Understanding for conducting Feasibilty study of Ereentsav – Choibalsan, Khuut – Bichigt railway was signed with Baxin Railway LLC on 7th May 2015. Within the frame of MoU Baxin Railway LLC was responsible for conducting the preliminary feasibility study of Khuut – Bichigt railway which will be connected to Zuunkhatavch port of Chinese railway network and China Railway Design Corporation conducted and submitted the draft feasibility study.
Feasibilty study of the Tianjin Transport and Logistics center project, as well as and joint company’s contract and statute draft was conducted. The preliminary feasibility study of the project has been conducted by Construction Design Institution of Tianjin City under the cooperation between Ulaanbaatar Representative Office SBA and Tianjin Port Group of PRC. Contract and statute draft of Mongolian and Chinese joint company has been prepared based on that preliminary FS.
Technical consulting service contract for energy supply МТЗ-ЗҮ-2014-03 with Montsakhir LLC Contract date:МТЗ-ЗҮ-2014-03 contract was signed on 25 July 2014. Ministry of Energy approved ToR of conducting design of power supply for the stations of Ukhaakhudag – Gashuunsukhait railway in 2013. According to the approval, bid tender was announced on 30 April 2014 and Montsakhir LLC was evaluated as the best bidder and has been awarded the contract on 25 July 2014. Work performance: Base research for design and power line design was completed.
Signed construction consulting service contract with Urkh LLC (Contract number МТЗ-ЗҮ-2014-02) Contract date: 25 July 2014. Financing for conducting construction design of Ukhaakhudag – Gashuunsukhait railway has been approved by the Mongolian Railway SOSC Board Resolution on 18 March 2014. Therefore, consulting service bid tender was announced. 2 stations and 5 crossings has been planned on Ukhaakhudag – Gashuunsukhait railway, so that work quantity has been estimated for the construction of facilities and infrastructure enginireeing
Paleontology Survey - Agreement No.1359/12 with the Paleontological Center of the Academy of Sciences Contract date: October 7th, 2013. The Paleontological Center executed survey works and fieldworks and completed a report.
Contract MTZ-MUS-2013-05 with the technical advisor “DBI International” Co., ltd Date of contract: September 28th,2013. Compliance monitoring, construction supervision and monitoring were performed under the agreement.
Archeological Survey-Agreement with Institute of Archeology of the Academy of Sciences Date of agreement: 2013. The Archaeological Institute of the Mongolian Academy of Sciences performed archeological surveys along 1800 km route in September and October 2013. 98 artifacts have been newly discovered, of which 27 artifacts will be required to be relocated in case of stripping and utilization activities.
Contract MCA-MALL-2013-03 with financial advisors BNP Paribas, Guggenheim international LLC and Liberty Partners LLC Date of contract: May 24th, 2013. The following tasks were completed. These include: Develop a project financing strategy; Prepare project forecasts and railway tariffs; Calculating project investment costs and operating costs; Determine potential international investors and lenders for the project; Project risk assessment; Develop a marketing plan to create funding sources, get approved by the customer, and fulfill the performance; Estimate the impact of the project on macro and micro levels in domestic and regional economies; Make a financial model of the project's operations and conduct its sensitivity analysis; Develop a tariff policy design; Define favorable terms of lending; Develop a financial model that includes income statement, balance sheet, cash flow statement, repayment and other financial information; Evaluation of "MTZ" SOSC and the designated project company based on the financial modeling; Develop a brochure for investors and lenders and other necessary documentation; Provide investors and lenders with necessary information on the project; Participate in negotiations with potential investors and lenders.
Agreement No.MTZ-ZY- 2013-02 with "Nippon Koei" LLC Date of contract: May 14th, 2013. In cooperation with Nippon Koei, a Japanese company, the field survey for the 1800 km long Tavantolgoi - Sainshand - Baruun Urt - Khuut - Choibalsan - Ereentsav, Khuut - Numrug, Khuut - Bichigt railway has been inspected and approved, a technical and economical comparative study of Khuut -Bichigt and Khuut - Numrug railway, "FEED" design, technical drawings and bidding documents have been completed. Dalanzadgad-Choibalsan part of Environmental impact Assesment, developed by “Natural Sustainable” LLC, has been translated from Mongolian into English.
EPC contract with Samsung C&T and “SCTECM” LLC on May 6th 2013 The agreement was signed on May 06, 2013 and works started on May 16, 2013. As of 2018, the progress of the Tavantolgoi-Gashuunsukhait rail project is 51.84%. In accordance with the joint order of the Ministry of Roads and Transport and the State Property Committee on April 12, 2013, issued within the resolution No. 121 of the Government, the rights and obligations of "Energy Resource Rail" Co., Ltd. in the contract with Korean "Samsung C&T" Corporation have been transferred to "Mongolian Railway" SOSC. The contract has been terminated based on a mutually agreed agreement between "Mongolian Railway" SOSC and "Samsung C&T" Corporation SCTECM LLC on September 15, 2016.
Contract MDS-2013-01 with Legal advisors “Sidley Austin” LLP and “MDS Associate” LLC Date of contract: May 1, 2013. Advisors have completed following works in regard to permissions required from the Government in order to provide necessary support: Implementation structure, conditions and scope of the project, the project proprietary design, investments for the MTZ and the project company, possible types of ownership and the description of the general commercial structure covering the contractual issues within the project, financial structure assumptions covering debt and equity capital, legal frameworks in accordance with Mongolian law, mitigation of political risks, tax deductions and remuneration completed defining the economies of the exercise, special permits and more.
Resolution No. 152 of the Government on some measures to increase opportunities for access to seas on April 27, 2013 "Mongolian Railway" SOSC has been appointed to represent Mongolia in a project to develop the joint logistics project in Dongjiangcustoms clearance port within the framework of the Memorandum of Understanding to deepen bilateral economic and trade cooperation in the Binhai New District of Tianjin China signed in 2009. In accordance with the plan approved by the Deputy Prime Minister of Mongolia on June 04, 2013, the "Mongolian Railway" SOSC and "Ulaanbaatar Representative Office" will jointly implemented the "Tianjin-Mongolian Joint Transport and Logistics Center".
Resolution 82 of the Government of Mongolia for initial funding of the project on March 03, 2013 Pursuant to the Resolution No. 82 an agreement was signed on May 06, 2013 with the Development Bank of Mongolia for initial funding of USD 200 millions from total USD 400 millions.
Resolution No. 28 of the Government about Project Financing on January 26, 2013 The Government approved a total of $ 55 million in funding under the Government Resolution 266 of 26 January 2013 to the Board of Directors of the Development Bank. Within the framework of this resolution, the "Agreement on Financing and Repayment Arrangements" was signed between the Development Bank, the Ministry of Economic Development, Ministry of Road and Transport and the MTZ on February 3, 2013. In accordance with this resolution, the tender for the selection of technical, financial and legal consultants for the "New Railway" project was announced on 8th February 2013 and completed on 27th March 2013. As result following companies were selected and awarded a contract: Legal advisors "Sidley Austin" LLP from USA and domestic "MDS Associates" LLP partnership, technical consultant "Nippon Koei" LLC from Japan, financial advisors "BNP Paribas" LLC from France and "Guggenheim Partners" from USA. Technical Supervisor - On 22nd May 2013, the bids were announced and the DBI contracted and awarded a contract.
The Order No. 65 of the Prime Minister of Mongolia on November 13, 2012 Based on the resolution number 121 of the Government of Mongolia a Working Group with 8 persons led by the Minister of Road and Transport was established to negotiate with foreign and domestic investors interested in investing in the construction of the basic railway infrastructure.
Resolution No.121 of the Government of Mongolia on November 3, 2012. The Government of Mongolia's Resolution No. 121 stipulates that the base railway structure included in "The State Railway Policy" is vital to the state's economy and society and issued the license to construct the railway to Mongolian Railway SOSC
On the February 1st, 2012, MTZ joined the International Union of Railways (UIC). The International Union of Railways is the world's largest international railway institution with 197 member states on 5 continents. Members can participate in all its activities, platforms and working groups related to its activities.
Within the framework of the project "Increase the Railway rolling stock fleet", 245 open top wagons were supplied from China. The last 63 wagons of total 245 wagons have arrived into the Zamyn-Uud station on January 17th and have been certified by the government implementing agency "Railway Authority".
Engineer-geological survey - Contract number 1/002 with "Eco Hydro Geo" LLC Date of contract: 2011.03.11. 11 domestic companies led by "Eco Hydro Geo" LLC carried out 29,800 meters drilling at 4967 boreholes and conducted hydrological mapping and field surveys with 1: 50000 scale along "Dalanzadgad - Tavantolgoi - Zuunbayan - Sainshand – Baruun Urt- Khuut - Choibalsan" route.
Geodetic Survey - Contract number 1/001 established with "Geomaster" LLC Date of contract: 2011.03.11. Geodetic Structure and Geodesy Installation Geodetic Structure along the entire route and high resolution mapping of 1: 1000 scope of 1 meter was completed in Mongolian and English as of August 17, 2011.
Environmental Impact Assessment- Contract number 1/003 with "Natural Sustainable" LLC Date of contract: 2011.03.11. In May 2011, 4 domestic companies led by "Natural Sustainable" LLC ") conducted a status survey along the 1165 km railway route.
The first of two of 6,000 horsepower 2T-116 series diesel locomotive produced in Russia and purchased by state budget of Mongolia, was delivered to the “Mongolian Railway” SOSC in January 2010 and the second one was delivered in January 2011. It has been operated by "UBTZ" under a lease agreement since February 02, 2011.
Tender of the "Zamyn-Uud Cargo Terminal (Transport and Logistics Center)" project was cancelled, thus the company has developed a project "Increase of the Railway Construction and Maintenance Rolling Stock Fleet", pursuant to the order of the Railway Authority, Government’s Implementation Agency.
The Resolution No.32 of the State Great Khural approved on June 24th, 2010. According to the Resolution No.32 of the Parliament on June 24th, 2010, “The State Policy on Railway Transport" was approved based on Article 8.1.1 of the Law of Railway Transport.
The "Evolution" MR1001 series locomotive has been purchased by state budget, was delivered in Mongolia in February 2009, and handed over to the "Mongolian Railway" SOSC.
"Zamyn-Uud Cargo Terminal (Transport and Logistics Center)" project and preliminary feasibility study were developed.
According to the Resolution No. 41 of the State Great Khural, dated December 24th, 2008, the company has developed a preliminary feasibility study for the project of "Increase the Railway rolling stock fleet".
According to the Resolution No. 225 of the State Property Committee, dated April 17th, 2008, it was permitted to take into ownership the Transshipment facility at the Zamyn-Uud station, built by the Japanese Government grant and worth of 2.8 billion yen.