Interview
UB Railway gearing up for bigger international role
2016-05-10
E.Odjargal finds out from L.Purevbaatar, Director of Ulaanbaatar Railway JSC, the role it expects to play in the planned economic corridor between Asia and Europe through Russia, Mongolia and China.
The three countries of Russia, Mongolia and China plan to include all means of transport in the economic corridor between Europe and Asia. How can Mongolia use its railway network in this?
We in North-East Asia have not yet established a model of international cooperation, while countries in South-East Asia have formed ASEAN and also other organisations to cooperate in specific spheres such as transport. Mongolia will have an important role when similar regional cooperation associations are established in North-East Asia, identifying priority areas of cooperation, and determining their administrative and operational structure. Our gest contribution would be in offering our railway network, built at considerable cost to run in the most difficult conditions of Manzhouli, the Mongolian steppe and Siberia, as part of a regional strategic railway.
Government authorities of Russia, Mongolia and China have agreed that an economic corridor along the regional railway network will be a major part of the projected road map for North-East Asian and Eurasian cooperation. The corridor will facilitate transport and trade and, besides the railway, will comprise gas and oil pipelines, energy lines, highways and flights.
How is the Northeast Asian railway network so important?
The Trans-Siberian Railway in the north and the BAM road behind it connect Europe and Asia. Three railways -- trans-Mongolia, trans-Manzhouli, and trans-Korea -- will be linked to the main line and maybe also the Trans-Amur Railway. Several side or local routes will be connected to the Trans-Siberian to form the largest railway network in North-East Asia. Russia, Japan and South Korea plan to use this network to feed and supplement their seaborne trade. Maybe one-third of this trade will now be on land. A cargo ship from South Korea and the Far East takes two months to reach Europe, but test runs have shown it can be done by rail in 18 days at the most. Quick delivery is essential for efficient trading.
Isn’t there competition between the Russian-sponsored Eurasian economic corridor and China’s Silk Road initiative?
Yes, there is. The Silk Road railway to Europe, passing through Kazakhstan, will be shorter. Incidentally, China has transformed its old Railway Ministry into a corporation. This corporation has determined that the north-easternmost point of the Silk Road will be where the Manzhouli Railway ends.
China will treat the Trans-Siberian Railway as the Silk Road’s northern part. This is where we come in. Ulaanbaatar Railway has always been accepted as a connector to the Trans-Siberian, but now China has suggested that the proposed narrow-gauge railway it will build from Tavan Tolgoi to Gashuunsukhait use the Silk Road railway network with access to the sea. Thus we have a choice between going north and south.
It is not just China, particularly its Shanghai region, that will use the northern railway. Other countries such as South Korea, Japan, and others in the Pacific region will also be able to transport their freight through it.
How much freight is currently carried over the railway in Mongolia?
A conference was held in Sochi in the beginning of March to discuss this year’s international freight transport targets for railways. There it was decided that Mongolian railways will carry 6.2 million tons of transit freight to China, of which 5 million tons would be iron ore. The total volume is one million tons more than in 2015. Freight from Russia to Mongolia will total 1.5 million tons, showing a 45% increase over 2015. This year Russia will send 2.5 million tons of crude oil to China through Mongolia. Ulaanbaatar Railway expects to earn more than $50 million as transit fees.
Ulaanbaatar Railway has been used since 1950 to carry freight between Russia and China. Now it can be a similar important part of a North-East Asia railway network. However, before it can take up added responsibilities, Ulaanbaatar Railway must undergo comprehensive technical and operational upgrading.
Are you clear about what is needed? Where will the money come from and how would the renovation be done?
We have planned technical upgradation to increase the carrying capacity of Ulaanbaatar Railway to 48 million tons by 2020, half of which will be in transit freight. We shall also have dual gauges along the track – the Mongolian (and also Russian) and the standard one used in China -- and these can be changed automatically as the locomotive approaches. The Mongolian Government and the Russian Federation Government had paid $125 million each to increase the capital of Ulaanbaatar Railway and this is now being spent on renovating containers, and upgrading signalling facilities and track maintenance. All this work should be completed by December 2017, by which time our capacity will reach 34 million tons, an increase of 6 million tons over the current capacity.
The Moscow Institute for Transportation and Development Policy offered us three different blueprints for increasing capacity to 48 million tons, and we have made our choice. This calls for having automatically operated dual-gauge tracks, building new crossings with remote control facilities, and also for a new railroad around the Bogd Mountain. When our capacity does reach 48 million tons, our revenue from transit freight transport will increase substantially, likely reaching over $80 million.
How has Russian Railway, which is a co-owner of Ulaanbaatar Railway, responded to the upgrading proposal and programme?
The main purpose of our visit to Sochi was to meet with the new management of Russian Railway. The two Governments had already discussed and agreed on the need for extensive upgrading and the Russian Government had asked the Moscow institute to prepare the project. As I have already said, we chose one from among three they submitted and informed our co-owner, Russian Railway, of this, along with a proposal and a request for its support to help Ulaanbaatar Railway develop its potential to become part of an important international transport corridor. In Sochi, the Russian Railway management informed us that they approved the railway development plan until 2020 and have asked for details of the technical and financial support required from Russia. Their only condition has been that railway management and policy are not affected by political developments in Mongolia.
Will the three countries sign the transit agreement any time soon?
At Russian initiative, a meeting has been scheduled in Tokyo in May to discuss transit freight transportation issues. Cooperation between Russia, Mongolia and China is moving forward smoothly, and their talks on these issues are held under the auspices of the UN. The agreement is expected to be signed at a meeting in Tashkent later this year.