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Legal Summary of Railway Transportation Regulation of Mongolia

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Legal Summary of Railway Transportation Regulation of Mongolia Legal summary of Railway transportation regulation of Mongolia 1. Introduction Mongolia is the shortest railway /total rail major industrial areas of Erdenet (copper, line – 1908 km/ corridor connecting Asia 164 km), Baganuur (coal, 95 km), Bor- and Europe. Its railway history dates back Undur (fluorspar, 60 km), and Zuunbayan to 1938 which the first steam train started (previously a major military unit, 50 km). running between Ulaanbaatar and Nalaikh UBTZ is both infrastructure manager and in that year. Principal role of the railway the only transporter (carrier) operating on connecting those two cities was to supply this infrastructure. UBTZ employs 14,046 factories and peoples of Ulaanbaatar with people nowadays. coal. In the late 1930s, a railway connecting Erentsav to Bayantumen for The statistics of Mongolian railway: military purpose was built. It played a vital Total length 1110 km strategical role in Battles of Khalkhin Gol. Line type Single-track In 1947, a railway construction connecting Naushki, Russia to Ulaanbaatar began Track gauge 1520 mm according to a Cooperation Agreement between Mongolia and Union of Soviet Carrying 25 mill. ton per year Socialist Republics. After 2 years, on 6 capacity June, the “Ulan-Bator Railway” company Throughput 14 couple trains per day (UBTZ) which is jointly owned by the capacity governments of Mongolia (50%) and the Russian Federation (50%) was established. Rolling stocks 6577 wagons The infrastructure of UBTZ consists of 182 locomotives 1,815 kilometers (km) of broad (Russian) gauge lines in two main parts: Maximum 90 km/hour for speed passenger train o The main line Sukhbaatar— Zamyn-Uud, connecting the 80 km/hour for freight northern (Russian Federation) train and southern (People's Republic of China borders of Mongolia (1,110 km). The Mongolian Railway Company (MTZ) o The eastern line Ereentsav— is a joint-stock company 100% owned by Choibalsan, connecting the the state. It acquired three locomotives Dornod aimag (province) to the using funds from the state budget and rents Russian Federation (238 km). these to UBTZ. It plans to purchase more using a soft loan from the Government of There are also several branch lines of the the People’s Republic of China. The main line, including four connecting to the Government of Mongolia intends for MTZ 1 to become a transporter and eventually an o at the Sukhbaatar station is 2 hours infrastructure owner taking the and 55 minutes /175 minutes/ and government shares in new railways once o at the Naushki station is 3 hours concessions are terminated. and 55 minutes /235 minutes/, which takes longer for 1 hour. 2. Legal framework of Railway Transport in Mongolia Domestic regulation International regulation The Railway Transportation Safety Law, approved by Parliament in 1996, legalized Mongolia is a member country of the the roles and obligations of public Organization for Cooperation of Railways administration organizations in the railway /OSJD/ which was established in order to transportation sector. This law was create and improve the coordination of approved in order to regulate traffic safety International rail transport. Thereupon, however, this law was invalidated. railway transport regulations of Mongolia comply with the following agreements and By approving the Law of Mongolia on rules: Railway Transport on 5 July, 2007, the principals of the railway transport o Agreement on the International operation were determined and ensuring of Passenger Transport by Rail railway traffic safety was regulated. The (SMPS); key principles governing rail transport, as o Agreement on the International stated in the Law, are to: Goods Transport by Rail (SMGS); o Rules on use of Passenger Coaches o ensure coordination of the railway – PPW; transport under integrated o Rules on use of Freight Wagons – regulations; PGW; o ensure regular control and o International Passenger Tariff – supervision; MPT; o ensure access, quality and safety of o Uniform Transit Tariff – ETT. railway transport services; o ensure sustainable operations in the As a landlocked country between Russia railway sector; and China, Mongolia entered into o create conditions for market following bilateral agreements: competition in railway transport o Minutes of the meeting of the sector; Mongolian-Russian Railway o coordinate railway transport with Commission; the other transport sectors. o Minutes of the meeting of the This law encourages competition and Mongolian-Chinese Border accepts all forms of ownership, thereby Railway Commission. enabling new approaches to the Technological time of train receiving development of the sector. For example, procedure: o Article 4 paragraph 4.1: “This law regulates all railway transportation 2 activities whatever the type and UBTZ carries passengers which the most form of ownership.” of them are carried over quite long o Article 5 paragraph 5.1.5: “Create distances (average of 339 km for domestic conditions for market trips and 526 km for international trips). competition.” The railway organization (e.g. UBTZ) shall set the railway transportation service Also, it has important provisions charges and tariffs related to the legal concerning structure in the railway sector: monopoly in accordance with the Law of o a distinction between infrastructure Railway transport and the Law on Unfair managers (holder of rail Competition. While the international infrastructure) and rail transporters railway transportation tariffs must be set in (Articles 3.1.16–7); and consistency with Mongolian international o the infrastructure manager to use the agreements. Changes in tariffs are to be infrastructure itself or provide for its use publicly announced 10 days prior to by a rail transporter (Article 19.1.1). In effectiveness. brief, the infrastructure manager must provide access to other rail transporters but can also operate on the infrastructure itself. In 2010, State Policy on Railway Transportation was adopted by the Parliament of Mongolia. The policy aims at intensifying the social and economic development of Mongolia and providing sustainable development. The key elements are to: o improve the legal environment and structure of the sector through the introduction of competition; o construct new lines which would either be majority state owned or under some form of concession (with ownership transferring back to the state after a certain period), their general alignment to be established by the state; o upgrade the capacity and In the latest update, 10204.69 thousand ton technology of the existing UBTZ freight was exported while, 2975.1 main line. thousand ton freight was imported in 2019. 3. Transportation of freight and Also, 3893.09 thousand ton freight was passengers transited through Mongolia. 222,000 passengers were transported in December, 2019. 3 4. Types of License of Railway o to have professional staffs required Transport Operation for conducting railway transportation operation; Three types of licenses related to the o to comply with the law on Railway Railway Transport Operation are issued by Transportation, common Ministry of Road and Transport regulations of the railway Development, including (a) license on transportation and other relevant construction and use of infrastructure; (b) regulations and standards; license on manufacturing, assembling, and o to ensure railway traffic safety and maintenance of infrastructure; and (c) to comply with the orders relevant license on conducting railway transport to the traffic control of the train of services. the Integrated Center for Traffic 5. Rights and Obligations of the Regulation; Parties to Transportation o to maintain the operation of the Operation owned railway object regular and normal, and to keep records of Infrastructure manager, Transporter them, and to inspect and provide (Carrier), Organizations and Individuals services in accordance with are the parties to transportation operation. established procedures and technologies; Common rights of the parties o to allocate certain amount of o to conduct railway transport operational incomes to ensure operation in accordance with the railway transportation safety; decisions made to implement the o to submit a report about operation Law on Railway Transportation; of the railway transportation to a o to approve and enforce the rules competent authority in accordance and procedures of technical and with common rules of the railway technological operation which is transportation; binding in domestic in order to o other obligations set out by law. implement legislations, general set Rights and obligations of the of railway transportation rules, Infrastructure manager other regulations and standards; o to determine and enforce fees and The Infrastructure operator has following tariffs for railway transportation rights: services in accordance with this law and other relevant laws, o to use the infrastructure itself or regarding sustainable economic provide for its use by a rail development of the country and the transporter under an agreement; interest of customers; o to charge the transporter for use of o other rights set out by law. infrastructure, and for other maintenance and services Common obligations of the parties stipulated in the contract; o to approve infrastructure traffic o to have a license and certificate; plan in accordance with relevant 4 regulations and make proposal to o to receive fees settled by the it; agreements; o other rights set out by law. o other rights set out by law. The Infrastructure manager is undertaken Transporters
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