Russia and Mongolia sign memorandum to build railway line to Tavan Tolgoi
MOSCOW. Oct 15 (Interfax) - OJSC Russian Railways (RZD) and Mongolia's Ministry of Roads, Transport, Construction and Urban Development have signed a memorandum on starting a project to build the Zuunebayan-Dalanzadgad railway line that would connect with the Tavan Tolgoi coalfield, RZD said in a statement.
Both sides agreed to support a joint Russo-Mongolian project to develop OJSC Ulan Bator Railways and build new rail infrastructure in Mongolia. KOO Development of Infrastructure prepared the project.
The document stipulates that the line's construction start very soon in order to secure the development of fields in the South Gobi region of Mongolia.
RZD is ready as of November to start gradual financing of up to $250 million for design work and construction of the line.
Owing to a decision to increase Ulan Bator Railways' capital by $250 billion, RZD and Mongolia's Ministry of Roads, Transport, Construction and Urban Development decided to implement systematic measures normalize the company's operations.
According to the memorandum, RZD will facilitate a fast solution for providing Ulan Bator Railways a bank loan worth $145 million so that the Mongolian company's management can implement necessary efforts.
In addition, according to the terms of an memorandum for cooperation between Ulan Bator Railways, RZD and CJSC Transmashholding from August 25, RZD will provide professional support to the Mongolian company in its acquisition of new locomotives, development of a repair and servicing center and the establishment of a wheel repair workshop. In addition, technical and personnel support will be provided in 2010 for capital repairs.
Mongolia's Ministry of Roads, Transport, Construction and Urban Development will facilitate the creation of economically viable tariffs on domestic cargo transport, the transfer of Ulan Bator Railways' social facilities to Mongolian state and municipal authorities, and solutions for the company's debt on international loans.