The Asian Development Bank
(ADB) will help Mongolia build a state-of-the-art road/rail linked logistics
facility to help expand and speed up trade, and increase the landlocked
country”s global competitiveness. ADB”s Board of Directors approved loan and
grant assistance of USD45 million equivalent for the Regional Logistic
Development Project, which will put up a container terminal with road and rail
links in Zamyn Uud on the southeast border with China.

In recent years, strong
economic growth has seen Mongolia”s trade volumes rise sharply with more than
80% of imports now coming from China, via Zamyn Uud, while the bulk of exports
also pass through the same border point on the way to Tianjin port. The growth
in traffic has sharply outstripped existing facilities, resulting in lengthy
delays in trade and traffic movements, with up to 50 to 60 days needed to get
shipments to Ulaanbaatar. With the discovery of large reserves of coal and
minerals destined for markets in the China, the need to upgrade and modernize
the crossing point has become acute.

According to ADB, the new
terminal will have modern customs and quarantine facilities and road and rail
access which will reduce transit times, expand capacity and improve staff
productivity. Management of the facility will be contracted out to a private
operator. ADB will also provide training and other support to government staff
engaged in implementing and overseeing the project.

It will also create
livelihood opportunities in the service sector for poor, rural herders living
in areas surrounding the center, as well as opening up prospects for
public-private partnerships and private investment in other transport-related
infrastructure.

ADB”s assistance will make
up almost 63% of the total project cost of about USD71.6 million. It will
include a 32-year loan of USD40 million with an 8-year grace period carrying an
annual interest charge of 1%, rising to 1.5% for the balance of the term. It is
also extending a grant of USD5 million.

The Government of Mongolia
will provide the remaining USD26.6 million. The Ministry of Road,
Transportation, Construction and Urban Development is the executing agency for
the project which is due for completion in December 2015.