Mongolian Railway Project of MCA cancelled

Mongol Messenger (B. Ooluun) - Mongolia signed a Compact Agreement with US through MCC to receive a USD285 million grant from the US Millennium Challenge Account (MCA) and implementations of five projects are currently underway. However an implementation of the Railway project where the largest investment was to be made or USD 188 million was stopped. The Ulaanbaatar Railway Joint Stock Company, (UBTZ), in which Mongolia’s Government and the Government of the Russian Federation each owns a 50 percent shares operates Mongolia’s railway system. Since the Russian side informed that they refused this project, so the project has been impossible to continue.

While a joint team selected through the international open tender under the Rail project Implementation agreement was doing audits in the Ulaanbaatar Railway from January 19, 2009, the Ulaanbaatar Railway informed the Millennium Challenge Account of Mongolia (MCA Mongolia) that Gennady Petrakov, Chairman of the General Committee of UBTZ (head of the Federal Railway Transport Agency, Russia) sent a letter to stop auditing from March 5 and informed that this would be discussed at the next meeting. UBTZ’s General Committee held a meeting on April 20, at which the MCA’s Rail Project was refused. The project reached a situation to stop.

A. Gansukh, Deputy Minister of Road, Transport, Construction and Urban Development, said “The Mongolian side did not officially inform to Russian side about the implementation of MCA project and that was so irresponsible on their side. There is no choice but to consider the Russian side’s position.”

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Archived Comments
2009-04-28 20:39:12
Big brother is still keeping the younger one on a short leash, huh?
Roy Dongen
2009-04-28 22:34:10
The first comment on this article by efww that Russia likes to keep Mongolia dependent couldn't be more true in my opinion. It is shocking to hear that the arrogant attitude of the Russian shareholder in Ulaanbaatar Railways simply refuses a grant (gift) of 188 million for the much needed upgrade of Ulaanbaatar Railways because of some procedural matters since the project is already 2 years on its way. In the meantime there is talk about a 250 million investment by the Russian side into the Ulaanbaatar Railways. But probably this will the usual kind of tricky investment. We can already foresee the Russian side claim that since it is a 50/50 joint venture the Mongolian site should invest equally. If not, at least 50 % should be transferred in a loan? It sounds like a similar deal as with the agricultural support. 300 million of support was claimed in the press. But since this money, controlled by the Russian Agricultural Bank can only be spend on Russian (in many cases inferior or at least not the worlds best) products, this is in fact just an export credit for Russian companies. This loan can be hardly be seen as just help for Mongolia but more as part of trying to revive Russia's own, fundamentally unsound economy. So the conclusion clearly has to be that the Mongolian people now get deprived of a gift of 188 million by Russia and the children of Mongolia will be deprived of a better infrastructure much needed for the environmental friendly and sustainable future of Mongolia. Instead of that, Mongolia and its future generation will have to carry the burdens loaded upon by their northern neighbor with its colonial attitude. Lets hope that Prime Minister Putin during his visit to Mongolia has the decency to apologize to the people of Mongolia and recalls the decision made by those who have no eye at all for the interests of Mongolia.
2009-04-29 10:55:24
so much for 'the third neighbor'policy. the question is, is this 'the revenge of geography' or the revenge of the sith?
2009-04-30 23:34:56
this is a highly censored site.
2009-04-30 23:42:01
Mr. Dongen seem to be implying that the MCA "gift" is really a gift without strings attached. And his "the children of Mongolia will be deprived of a better infrastructure much needed for the environmental friendly and sustainable future of Mongolia" makes me want to puke. First go out and do an environmental impact assessment in all areas where uranium, copper and gold will be expolited, then talk about enviroment. Americans are exploring for uranium 70km outside UB, so much for a friendly third neighbour.
2009-04-30 23:57:58
how is this site censored, seegii?
2009-05-06 06:05:49
seegii, please puke and pick them up by yourself!
2009-05-06 20:22:01
probably the Mongolian side did not inform their Russian partners about the grant as not to share the free cake from the MCG ...
2009-05-06 20:54:53
I second Roy's opinion, sentimentality aside. There is no gift giving in politics as seegii said. I'm thinking, may be Mongolia should have another joint venture with whoever, even China, but Russia and build a parallel lane with the same gauge as the Chinese railway. Even better, to have the same parallel system East-West. This way Mongolia will put their neighbours into competition.