The Ministry of Road, Transportation, Construction
and Urban Planning organized a meeting on Saturday to introduce to domestic and
foreign investors, diplomatic representatives, and officials of international
organizations the railway policy and law on concession, so that those keen to
bid for constructing the railway would get a clear idea of what was expected of
them.

Deputy Minister L.Gansukh explained that the
development policy envisions two basic phases of growth, one between 2007 and 2015
and the other from 2016 to 2020. In this total period economic growth is
expected to be at an annual average of 14-15%, and the GDP is likely to reach
USD41 billion, with per capita GDP projected at USD5,000 in 2015 and USD12,000
in 2020. All this, however, depended on Mongolia’s success in exporting its coal
and other mineral resources to the best markets and the proposed new railway
was essential for this. It will carry Mongolian products to new sea ports,
freeing Mongolia from dependence on just one market.

The 1,100-km railway, expected to be
constructed within 4 years if not earlier, will have four sections. The
Tavantolgoi-Tsagaan Suvarga-Zuunbayan stretch will be 400 km long, the Sainshand-
Baruun-Urt one 350 km, the Baruun Urt- Khuut one 140 km, and the
Khuut-Choibalsan 150 km. The gauge will be 1,520 mm. The railway will serve the
coal basin of Tavantolgoi, the copper deposit of Tsagaan Suvarga and
Aduunchuluut, and also areas like Chandgana, Talbulag and Khuut that have coal,
zinc, tungsten and fluorspar. It should be able to transport about 50 million
tons of minerals annually, about 3.5 times more than at present.

After the meeting Gansukh told our reporter that
no decision has yet been taken on the modalities of offering the contract for
construction though some foreign companies — from Russia, China, North Korea
and South Korea — have shown interest in the work. Asked what the main
selection criteria would be, he said they would be the technical competence.
The selected company will most likely be asked to do the work with its own
funds, to be reimbursed by the Government when it starts to earn mineral
revenues.