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Cross-Border Trade and Transport Infrastructure Development In CrossCross--borderborder tradetrade andand transporttransport infrastructureinfrastructure developmentdevelopment inin NEANEA By:By: Prof.Prof. GotovGotov Dugerjav,Dugerjav, Dr.ScDr.Sc ContentsContents — NEA and Mongolia cooperation — Mongolia’s Macroeconomic Review — Brief description of the Eastern Mongolia — Infrastructure capacity review — Future Development Potential (on- going/planned megaprojects, traffic forecasts) — Road and Rail Transport corridors — Conclusions and Recommendations Gotov Dugerjav 2 I. NEA and Mongolia cooperation Gotov Dugerjav 3 NEANEA cooperationcooperation Northeast Asia : • 3 of the world’s major powers, • 2 of the 5 permanent members of the UN Security Council, and • 2 of the largest economies of the world • 2 of the BRIC’s countries. It is also a home to one of the world’s hottest flash points. The situation in the sub-region remains fragile, although it is relatively stable. Gotov Dugerjav 4 BasisBasis ofof CooperationCooperation This area of the World includes countries with very diverse political and economic conditions. The basis of an international economic cooperation framework could be a combination of rich mineral resources of Mongolia and investment capital and advanced technology from South Korea and Japan, as well as a considerable pool of workforce from China (PRC) and North Korea. Gotov Dugerjav 5 MongoliaMongolia’’ss foreignforeign tradetrade withwith NEA,NEA, millionmillion USDUSD Export Import 2009 2010 2011 2009 2010 2011 Total 1888 385.1 2 908 502.2 4 780 350.5 2 137 673.5 3 200 053.3 6 526 882.4 NEA 1 414 023 2 499 662.6 4 449 328.7 794 553.8 1 355 282.5 2 851 436.7 DPRK - 25.5 - 47.1 798.5 740.0 ROK 15 458.1 30 519.9 1 896.1 155 102.2 181 781.9 350 648.5 PRC 1 393 906.7 2 466 265.5 4 400 735.7 538 582.6 970 976.0 2 007 572.2 Taiwan 94.0 182.0 10.0 3 768.4 5 238.1 8 966.5 Japan 4 564.2 2 669.7 10 694.6 97 053.5 196 488.0 483 509.5 Source: National Statistical Office, Mongolia Gotov Dugerjav 6 II. Mongolia’s economy Gotov Dugerjav 7 GDPGDP growth,growth, MongoliaMongolia Spurred By: — Development of large coal, copper and gold mining projects; — Continued strong flows of FDI doubled between 2010 and 2011; — Public investment being raised; — Strong consumer demand due to disbursement of cash to the citizens. Gotov Dugerjav 8 InfrastructureInfrastructure capacitycapacity reviewreview Summary Transportation Statistics for Mongolia 2007 2008 2009 2010 2011 Freight (Thousand tones) 23,281.6 23,904.4 24,729.7 29,415.9 43,956.6 By Rail 14,072.6 14,646.9 14,164.5 16,753.2 18,327.4 By Road 9,207.1 9,255.7 10,563.8 12,610.2 25,635.3 By Air 1,887.2 1,847.0 1,369.3 1,641.6 2,930.9 Freight (Million TKM) 9,030.2 9,051.4 8,981.3 12,106.4 16,300.2 By Rail 8,360.7 8,261.4 7,817.0 10,286.7 11,382.2 By Road 661.9 782.1 1,160.7 1,834.0 4,910.3 By Air 7,720.6 7,926.5 3,666.7 4,169.5 7,708.6 Passengers (Million) 209.9 231.6 232.4 250.7 296.2 By Rail 4.5 4.4 3.1 3.5 3.8 By Road 205.0 226.9 229.0 246.7 291.8 By Air 0.4 0.4 0.3 0.4 0.6 Passengers (Million PKM) 3,263.1 3,607.3 3,173.1 3,607.4 4,696.1 By Rail 1,406.4 1,400.5 1,003.1 1,220.0 1,400.1 By Road 869.7 1,215.0 1,535.9 1,480.2 2,321.8 By Air 987.1 991.9 634.1 907.2 974.1 Source: Mongolia Statistical Yearbook 2011, National Statistical Office, Ulaanbaatar 2011 Gotov Dugerjav 9 BriefBrief descriptiondescription ofof thethe EasternEastern MongoliaMongolia Gotov Dugerjav 10 SharesShares toto totaltotal GDPGDP Share to total GDP, Eastern 100% aimags 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2009 2010 2011 Agriculture Industry Services Gotov Dugerjav 11 III. Current situation of Transport corridors in Mongolia and NEA Gotov Dugerjav 12 MillenniumMillennium RoadRoad RoutesRoutes Source: Ministry of Roads, Transportation, Construction and Urban Development, Mongolia Gotov Dugerjav 13 MainMain MongoliaMongolia RoadRoad CorridorsCorridors Route 1 (GTI Road corridor- 1a among the studied trans- GTR transport corridors): Ulaanbaatar- Undurkaan- Choibalsan- Sumber- Nomrog. This route will be constructed in the framework of the Millennium Road in nearest future. Route 2: Altanbulag-Darkan-Ulaanbaatar-Choir- Sainshand- Zamyn Uud This route is being built now and will be completed in 2013. The development plans for the route include implementation of an international highway construction project. Gotov Dugerjav 14 RoadRoad conditionsconditions inin thethe RoadRoad CorridorCorridor--1a1a Earth road between Choibalsan and Sumber (Nomrog) Earth road between Undurkhaan and Choibalsan (324 km ) Paved road between Ulaanbaatar and Undurkhaan (331 km) Gotov Dugerjav 15 TransportTransport NetworkNetwork inin EasternEastern MongoliaMongolia Types of Roads in Eastern Mongolia Road Distances in Eastern Mongolia Type of Road State (Km) State (%) Local (Km) Local (%) From To Distance (Km) Paved 546 15.6 215 3.0 Ulaanbaatar Ondorhaan 331 Ondorhaan Baruun Urt 229 Gravel 556 15.9 57 0.8 Ondorhaan Choibalsan 324 Improved Earth 305 8.7 7 0.1 Choibalsan Baruun Urt 191 Earth 2,095 59.8 6,876 96.1 Choibalsan Ereentsav 240 Choibalsan Khavirga Port 135 Total 3,502 100.0 7,155 100.0 Choibalsan Tamsagbulag 200 Gotov Dugerjav 16 MainMain MongoliaMongolia RailRail CorridorsCorridors Rail Corridor 1: Suhbaatar-Darkhan-Ulaanbaatar-Sainshand-Zamyn Uud (existing main line); Rail Corridor 2: Ukhaa Hudag (Tavantogoi)- Zuunbayan- Sainshand- Baruun Urt-Khuut-Choibalsan- Ereentsav; The section ”Uhaa Hudag-Zuunbayan-Sainshand-Khuut- Choibalsan” is going to built within 2.5 years. Therefore, the existing section between Choibalsan and Ereentsav needs to be upgraded. Rail Corridor 3 (GTI Rail Corridor -1b among the studied trans- GTR transport corridors): Ukhaa Khudag-Zuunbayan-Sainshand- Khuut- Tansagbulag- Sumber BCP (Nomrog bridge). The section of Rail line “Ukhaa Khudag-Zuunbayan-Khuut” will be built under the route 2. Thus, the new construction of the section between Khuut and Nomrog with total length of 338 km would be main focus area under GTI Transport Corridors Project. Gotov Dugerjav 17 CarryingCarrying capacitycapacity ofof thethe MainMain railrail lineline Gotov Dugerjav 18 ZAMYN UUD BCP q Besides petroleum products 90%- of the total import q 75% of the total export pass through Zamyn Uud BCP q Transit traffic is significant as well. Year/traffic 2007 2008 2009 2010 Imports (tons) 728,056 1,232,829 668,489 870,744 Exports (tons) 34,257 52,719 74,260 75,651 Trucks inward 18,919 34,501 21,446 19,190 Trucks outward 18,106 34,302 21,152 17,453 Cars in/out 80,634/81,659 95,350/95,059 98,493/99,246 116,089/104,844 Passengers in 750,000/766,000 809,000/810,000 698,000/702,000 861,000/863,000 and out figures rounded Gotov Dugerjav 19 NewNew logisticslogistics centercenter inin ZamynZamyn UudUud Gotov Dugerjav 20 MongoliaMongolia andand NEANEA transportationtransportation connectionsconnections Gotov Dugerjav 21 BorderBorder crossingcrossing pointspoints BetweenBetween - Border crossing point MongoliaMongolia andand ChinaChina Gotov Dugerjav 22 IV. Railway Plans in Mongolia Gotov Dugerjav 23 MongoliaMongolia’’ss railwayrailway policypolicy Gotov Dugerjav 24 NewNew railwayrailway constructionconstruction phasesphases Phase II: Phase III: Western Vertical Khuut - Corridor Numrug Phase II: Phase I: Dalanzadgad- Khuut - Tavantolgoi –Tsagaan Bichigt Suvarga-Sainshand- Baruun Urt-Khuut- Choibalsan Phase II: Nariin Sukhait - Phase I: Ukhaa Shiveekhuran Khudag - Gashuun Sukhait Under construction (Samsung) Gotov Dugerjav 25 PlannedPlanned RailRail networksnetworks inin EasternEastern aimagsaimags ofof MongoliaMongolia Gotov Dugerjav 26 ApplicableApplicable legallegal frameworksframeworks Road sector legal and regulatory framework: — Between Mongolia and PRC : Road Transportation Agreement between the People’s Republic of China and Mongolia on June 24, 1991; — Between Mongolia and Russian Federation: International Road Transportation Agreement between Russian Federation and Mongolia on February 07, 1996. Railway sector: The applicable laws of a specific nature applying to the railway subsector as a whole are: — 1996 Law on Railway Safety (1996 Law); — the Law on Railway Transport (LRT); — Parliamentary Resolution approving the establishment of Mongolian Railway Authority (MRA); — MoRTT (now MRTCUD) Regulation dated February 2, 2005 Amendment 2; and — Law of Government Inspection 2003. The applicable agreements of a specific nature applying to the railway subsector as a whole are: — the 1949 Agreement between Russia and Mongolia on the Establishment of the Ulaanbaatar Railway Joint Stock Company (UBTZ) and its protocols (1949 Agreement), and — Multi-Lateral Agreements on Rail Transit Transportation: – the Border Railway Agreement between Mongolia and Russia, 1953; – the Border Railway Agreement between Mongolia and PRC, 1954; and – the Border Railway Agreement between Mongolia, Russia and PRC, 1956. Gotov Dugerjav 27 V. Traffic demand Gotov Dugerjav 28 Review of on-going/planned economic development projects likely to impact future traffic — 1/ Tavan Tolgoi (TT) coal mine project. In 2020, volume of the unprocessed products of the mine would be 67.7 million tons. s: — 2/ Nariin Sukhait (NS) coal mine project. In 2020, volume of the unprocessed products of the mine would be 30.5 million tons. — 3/ Oyu Tolgoi (OT) copper mine project. Expected production volume is 2.1 million tons of copper concentrate. Gotov Dugerjav 29 TrafficTraffic andand TransportTransport demanddemand forecastingforecasting Years Growth rate GDP/capita traffic elasticity Growth percentage GDP Population GDP/capita Passenger Freight
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