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Wednesday, July 6, 2011

Mongolia Briefing is a magazine and daily news service about doing business in Mongolia. We cover topics relating to the Mongolian economy, the market in Mongolia, foreign direct investment and Mongolian law and tax. It is written in-house by the foreign investment professionals at Dezan Shira & Associates

Trans-Mongolian Railway to Boost Cargo Volume

Apr. 10 – The Ulaanbaatar Railway Mongolia-Russia joint venture (UBTZ) transported a record 18.4 million tons of cargo and gained net profits amounting to more than 4.4 billion tugrik last year, according to the company statement which was announced during a regular meeting of the board of directors.

Freight traffic has grown by 10 percent, while the volume of passengers has grown by 9 percent to 3,829,000 in 2011, compared with 2010. The majority of passengers (3,662,600) were carried domestically, and 166,400 passengers internationally.

Freight turnover for the Ulaanbaatar Railway, or the Trans-Mongolian Railway, stood at 11,382,000 tons in 2011.

Last week, the Mongolian Minister of Transportation met with Ulaanbaatar Railway authorities. During the meeting, the two sides discussed the arrangements to be taken on increasing the freight transportation capacity of the county’s main freight transporter, and any reforms that need to be taken within the organization.

The board of directors decided to increase the company’s share capital by July 3, 2012. Last year, the equity capital of the company was already increased by US$250 million. That money was reportedly used for upgrading the equipment and technology of the transporter.

According to statistics, Ulaanbaatar Railway accounts for more than 80 percent of all national freight and 30 percent of all passenger transport within Mongolia. The total track length of the Ulaanbaatar Railway is 1,815 kilometers, and the company employs around 16,000 people.

The Trans-Mongolian Railway connects the Trans-Siberian Railway from Ulan Ude in Russia to Erenhot and Beijing in China through the capital Ulaanbaatar. The Mongolian section of this line runs for 1,110 kilometers (690 miles).

Russian Railways provides technical support to Ulaanbaatar Railway. Since 2007, 1,350 goods wagons have been supplied to Mongolia, and in 2009 Russian Railways reconstructed 108 kilometers of Ulaanbaatar Railway’s track superstructure.

The Trans-Mongolian Railway also has several spur lines:

  • To the copper combine in Erdenet
  • To coal mines in Sharyngol, Nalaikh and Baganuur
  • To the flourspar mine in Bor-Öndör
  • To the former Soviet military base in Züünbayan
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