FINANCING FOR MONGOLIA’S

TRANSPORT SECTOR

Experience and Future Directions for the

Asian Development Bank

Coaltrans Mongolia 2012

ADB transport strategy in

Mongolia

Rural connectivity and poverty reduction

Regional integration and trade

Central Asian Regional Economic Cooperation (CAREC Program

Border crossings and facilities

Reducing logistics costs

UB urbanization

Asset management

Private sector participation and PPPs

ADB financing for transport

Approved Projects (Loans/Grants)

5 road sector projects ~$185 million

1 logistics facility ~$45 million

2 aviation sector projects ~$60 million

Planned/Proposed Projects

2 road sector loans ~$125 million

Urban transport project ~$215 million

UB logistics facility ~$65 million

Technical Assistance provided for aviation and roads/proposed for logistics and urban transport

Western Regional Road – Existing condition

Western Regional Road – Existing bridge

ADB Financed Transport Projects

Road Development

Project, 1995

Second Road Development

Project, 1999

Regional Road

Project, 2004/2008

Regional

Logistics, 2010

Western Regional Road

Phase 1, 2008

Western Regional Road Corridor

Development Program

– Tranche 1, 2011

Western Regional Road Corridor

Development Program –

Tranches 2 &3, 2013-2016

UB Airport//Air Nav

System, 1993/1995

Experience to date - roads

History of rapid cost escalation

Procurement delays

Lack of experience with

international practice (e.g.

FIDIC)

Lack of maintenance

Need for capacity development

in sector

Second Road Development

Western Regional Road

Regional Road

Road sector challenges and

opportunities

0

2000

4000

6000

8000

10000

12000

1992 1997 2000 2006 2009 2012 2015 2021

Improved earth

Gravel

Paved

Km road works completed 2000-2008

0

100

200

300

400

500

600

2000 2001 2002 2003 2004 2005 2006 2007 2008

km

Network expansion plans to 2021 (km)

Sector production needs to increase rapidly.

GDP growth > 15% after 2012 Fiscal balance to improve in parallel Sector resources to rise quickly after 2012

Demand for road works will expand fast Government Action Plan National Development Strategy

Sources: DOR, National Development Strategy, ADB calculations

Strategies to address road sector

constraints

New financing modalities – multi-tranche financing facility (MFF) Long term investment programs

Provide incentives for reform

Match financing to project readiness

Explicit support to develop domestic contracting industry

Support sector performance through capacity development technical assistance $2 million grant - Japan Fund for Poverty Reduction (JFPR)

Prepare and implement sector roadmap

Comprehensive sector

development

Road Sector

CDTA

Management

for

Development

Results TA

Loan financed

Capacity

Development

$2 million JFPR financing

Implement sector roadmap

Consulting support

for management and

procurement

Road asset

management system and

training

Procurement

specialists

Consolidated PMO

International

consultant support PIU

Added PIU staff

Consultant support for road sector

program monitoring - dual posted at

MNRM & EA

Immediate implementation support

MFF

New direction for ADB support:

Logistics

Zamyn-Uud approved 2010 Ulaanbaatar proposed 2013

46

Figure 4-2: General Location of ZULC

New direction for support: Urban

transport UB Urban Transport Project

(2012 proposed)

Bus network upgrade/BRT

Road network improvements

Traffic management

Pedestrian improvements

BEFORE

AFTER

BRT Network Plan - 2020

Future opportunities

Railways

High impact for Mongolian development

Needs greatly exceed ADB resources allocated to Mongolia

PPP? PPP advisory role?

ADB technical assistance to railway subsector

Infrastructure tariff study

Proposed consultant support for Development Bank of Mongolia

Seeking other opportunities

Thank you