UB Railway back posting profits

Russian Railways Vice President
Vadim Morozov told the recent meeting of Ulaanbaatar Railway that the Russian
government’s decision in 2009 to transfer its stake in the company “to the
beneficial ownership of Russian Railways represented an important step in
improving the efficiency of the joint venture railway”. Asserting that Russian
Railways “rigorously fulfills all its obligations in terms of technical support”
for Ulaanbaatar Railway, Morozov said work on laying 108 km of continuous
welded rail track on the Mandal-Davaany line at the end of 2009 had been
finished ahead of schedule, which will allow train speeds to be increased to
120 kmh. The State-owned Russian Railways now holds the 50% of the shares that
the Russian Government held in Ulaanbaaar Railway, while the other 50%
continues to be under Mongolian government ownership.

“Our efforts to stabilize the financial situation of the railway achieved
significant positive results for the first time in the first half of 2010. By
increasing freight flows by 20% and passenger turnover by 16.8% in this period,
year-on-year, the company managed to generate a profit of USD4.3 million. The
goal now is to keep this up and end 2010 with a net profit,” Morozov said.

He revealed that USD1.7 billion is planned to be spent on the modernization of
the existing network, while a further USD1.8 billion would be required to
construct a new rail line to the Tavan Tolgoi coal mine. Another USD500 million
will be needed for the modernization and purchase of rolling stock up to 2015.