MONGOLIA: Support to the Development of Transport Intermodal Projects
Background
Landlocked Mongolia has a vast territorial expanse and low population density that create unique challenges for economic development and infrastructure investments. World Bank-financed Mongolia Infrastructure Sector Assessment Program (InfraSAP) study recommended that infrastructure should be inserted as part of an integrated value chain in those places with the highest concentration of economic activity and freight flows. The existing transport options in Mongolia, however, both domestically and to the Russian and Chinese borders, are inefficient and costly. The lack of specialized facilities for air freight also hinders the transportation of goods.
A dry port would provide a more convenient and efficient way to transport goods to and from Mongolia, reducing costs and improving trade facilitation. Additionally, it would help streamline customs procedures and reduce the time required for exporting and importing goods, increasing the volume of transit freights. The government is in the process of identifying a potential location to establish a dry port, starting with Zamiin Uud, and analyzing the feasibility based on various parameters, such as traffic levels projected growth, location, etc.
PPIAF Activity
The ongoing PPIAF activity encompasses a comprehensive approach to enhancing Mongolia's transportation sector, emphasizing the development and modernization of transport and intermodality infrastructures. It also seeks to catalyze private sector involvement and streamline international transport processes. Overall, the PPIAF activity proposes a strategic intervention to improve Mongolia's transportation infrastructure by promoting private sector participation, enhancing legal and regulatory frameworks, conducting foundational studies for key projects, and bolstering the capacity of stakeholders through targeted training and development programs.
Key Components
- Analysis of Transport and Intermodality: The analysis will help outline an integrated transportation system that links roads and railways, creating a seamless transition between modes for more efficient goods movement. It will also assess how the private sector could be more involved in the railway mode of transportation and increase competition with the road sector. Recommendations for facilitating intermodal transport will focus on smoothing the interchange between roads and railways and help initiate measures to simplify and harmonize procedures for maritime cargo border crossings.
- Review of Legal and Institutional Framework: An in-depth review of Mongolia's legal and institutional framework is planned to better facilitate private sector involvement in transport intermodality projects. This will include identifying existing gaps and bottlenecks, both within Mongolia and in its dealings with foreign counterparts. Based on the review, draft proposals for new laws and regulations will be prepared to encourage and govern private sector participation.
- Pre-feasibility Study of the Dry Port of Zamiin Uud: The study will assess the economic, technical, legal, and financial parameters of the project and determine the potential for private sector engagement in the establishment and operation of the dry port. It will provide preliminary insights into the viability of the project and the conditions needed for private investment.
- Capacity Building and Training: The objective here is to empower both public and private entities with the knowledge and skills necessary for the development and modernization of Mongolia's transport and intermodality sector. Training programs will cover innovative transportation models, international trade procedures, public-private partnerships, project evaluation and design (covering technical, legal, financial, and procurement aspects), project supervision and management, and more.
The establishment of a dry port in Mongolia can help greatly enhance the country's trade capabilities and contribute to its economic development. From November 6th to November 10th, 2023, the government of Mongolia held a transport week under the theme "Strengthening Regional Transport and Logistics Connectivity," where the early results of the undertaken activity were presented and the Prime Minister stressed the importance of the dry port. Based on the study’s preliminary findings, the Minister of Road and Transport Development further requested a similar analysis conducted on Zamiin Uud to five additional locations.