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Economic Policy Reform and Competitiveness Project

U.S. Agency for International Development

Mongolia’s transportation infrastructure issues highlighted at international conference

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Mr. Buyantsogt Asralt, Board member of Eastern Asia Society for Transportation Studies (EASTS) and Technical Secretary of Mongolian Transportation Study Center (MTSC), Mr. Jambaa Khashbat, Associate Professor of the Mongolian University of Science and Technology (MUST), and Mr. Sandagdorj Otgonbayar, EPRC Policy Analyst, represented Mongolia at the Eighth EASTS Conference and Expo 2009 held in Surabaya, Indonesia, during 16-20 November. B. Asralt and J. Khashbat presented and discussed a paper on the “Current situation of the transportation sector in Mongolia”, S. Otgonbayar presented and discussed two papers; one on “Estimation of indirect effects of export sector on non export sector: the case of Mongolia” and another on “Public Private Financing the Zamyn Uud Logistics Facility.
The paper on “Estimation of indirect effects of export sector on non export sector: the case of Mongolia” highlighted forward and backward linkages of export and non export industries and recommended the consideration of cross-industry linkages when designing and implementing economic policy. The study demonstrated the point that Mongolia has given insufficient attention to critically important transportation infrastructure to accommodate extraction from larger mine sites as policies have so far failed to identify backward linkages between mining sector growth and infrastructure demand. Another point stressed in the paper was the impact of the failure to estimate the technical capacity of cargo transshipment and border crossing facilities when promoting growth of an import-dependent sector such as construction. Direct effects examined include increased inflation and construction costs indirectly impacting in banking sector loan portfolios and the competitiveness of domestic construction companies.

Otgonbayar’s paper on “Public Private Financing Zamyn Uud Logistics Facility” S. attracted much interest from conference participants. Experts from China and Indonesia actively shared their practical experiences on implementation of PPPs. For example, China in 2007 signed eleven contracts for a total of USD 3.8 billion to develop five roads through a Build-Operate-& Transfer (BOT) mechanisms, four seaports—three BOTs and one concession mechanism—and two airports—one BOT and one partial divestiture. Indonesia signed six road development projects for a total of USD 1.2 billion.

EASTS is an umbrella organization of transportation science societies established with the primary objectives of fostering and supporting excellence in transportation research and practice and stimulating professional exchanges on various aspects and modes of transportation. Founded in November 1994, EASTS currently has twenty-two member countries or local associations. In 2008 Mongolia became a full member of EASTS. Mongolia’s local association, MTSC, is headed by Mr. Kh. Battulga, Minister of Roads, Transportation, Construction and Urban Development.

The conference provided Mongolian experts with an opportunity to present cases and challenges faced in the transportation sector of Mongolia, share knowledge and learn from experiences of other countries. International experts attending the PPP sessions emphasized the importance of implementing a pilot project in Mongolia as international experience shows that countries learn a lot through the actual implementation of PPP projects. EPRC will continue to encourage the idea of using a PPP mechanism to develop the logistics facility in Zamyn Uud. EPRC will continue to encourage the idea of using a PPP mechanism to develop the logistics facility in Zamyn Uud.
 

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