The following is an interview with newly appointed executive director of state-owned Mongolian Railway Company Kh.Kherlen about ongoing projects and future plans of the company.

 Congratulations on being promoted to Mongolian Railway’s executive director. Can you tell us how you got to this position?

I’m a lawyer with a master’s degree in technical sciences. As for work experience, I spent the last 10 years working for government agencies, including the State Construction Design Institute, Mineral Resources Authority, Ministry of Industry and Trade, and State Property Committee. I started working as the executive director of Mongolian Railway on October 7.

It’s been 100 days since the new government was established. What has Mongolian Railway accomplished during this period? What kind of major projects have been planned?

Our company is a state-owned company engaged in railway transportation and construction of basic railway structure. We opened a 33.4-kilometer railway from an iron ore mine located in Khuder soum to Yuruu soum in Selenge Province in May. Currently, over 600,000 tons of iron ore have been transported. Our target is to transport a million tons more before the end of the year.

We transport with our own wagons and locomotives, which greatly contributes in improving usage of rolling stocks, learning to use modern technology, and enhancing freight transport in Mongolia. We studied and submitted a proposal to the Ministry of Roads and Transportation to add Zuunbayan-Khangi railway track in the State Policy on Railway Transportation, approved by Parliament in 2010, to start constructing a railway in this route, as specified in the government action plan through 2030.

We also submitted a feasibility study for connecting Tavan Tolgoi-Gashuunsukhait railway with Oyu Tolgoi deposit’s railway station and a report on studies related to Shiveekhuren border checkpoint. The feasibility for Khuut-Bichigt railway station was developed together with the 3rd bureau of China Railway.

Moreover, Mongolian Railway plans to study and carry out projects that are economically significant and support freight transportation and logistics activities. For example, we plan to develop a project for manufacturing and assembling wagons. Around 6,200 trains are used in Mongolia right now. 44 percent of these trains, approximately 2,700 trains, have exceeded their service life. In other words, they have been used for more than 25 years. Using such old trains is very dangerous. Freight trains definitely need to be renewed in the near future. Train parks will have to be upgraded and expanded once railway tracks from Tavan Tolgoi-Gashuunsukhait, Shiveekhuren-Sekhee, Khuut-Bichigt, and Erdenet-Ovoot have been constructed in stages.

Other railway projects specified in the State Policy on Railway Transportation will be launched as well. When these railway projects are completed, there will be a demand for approximately 10,000 trains. Importing this many trains means that our money will fly away to other countries. Therefore, we have formed a working group for developing a preliminary feasibility study for a freight train factory, which produces trains for both narrow and wide gauges, and repairs trains. The working group is currently developing estimates and studying practices of train factories in China, Russia, Ukraine, Germany, Kazakhstan and Uzbekistan. The preliminary feasibility study has been discussed and supported by the Scientific and Technical Council of the Ministry of Roads and Transportation. They acknowledged that the project would be economically beneficial.

How large is Mongolian Railway’s rolling stock right now?

Our company operates with a total of 245 freight trains, two lift trucks, and nine locomotives with high capacity that were manufactured in Russia, China and the USA. We also own the Cargo Transshipment Facility in Zamiin-Uud soum of Dornogovi Province along with nearby 80 hectares of land. As for the basic railway structure, we have 33.4 kilometers of railway track between Khuder and Yuruu soums of Selenge Province with an additional 8.4-kilometer railway track across the Cargo Transshipment Facility.

How is the construction of Transport and Logistics Center progressing?

Mongolian Railway developed the plan for constructing this center. Just recently, our specialists visited Tianjin city of China within the scope of this project. They joined the 2016 Northeast Asia Peace and Development Forum held in Binhai, Tianjin city and presented speeches on the transit economic corridor of Mongolia, Russia and China.

Our representatives introduced projects for Tianjin Logistics Center, Tavan Tolgoi-Gashuunsukhait and Khuut-Bichigt railway routes to heads of large Chinese corporations. Once investment is resolved, a joint company will be established and construction will be started. Industrial researches required for operations are being conducted. We’re working on economically significant projects for enhancing meat export, increasing domestic production of meat and supplying it to our third neighbor countries, producing final products from animal skin and hide, boosting sea buckthorn production, and packaging imported common food products. Opening these factories at Dongjiang Free Trade Port Zone in Tianjin city, which is near a seaport, will not only enable Mongolia to receive free trade zone incentives and get exemptions from customs tax but also boost export and reduce transportation and logistics costs.


 

…I believe that based on accurate assessment of the current situation, Mongolia needs to develop a very good strategy for putting strategically important deposits into economic circulation and get the most benefits out of it…


 

Mongolian Railway is constructing a railway through the New Railway Project. How is this project progressing?

The construction of the Tavan Tolgoi-Gashuunsukhait railway track’s lower structure is at 85 percent completion. We studied foreign investors, and currently we are negotiating with potential investors for the New Railway Project. We expect to see some progress in the eastern routes as the project for building Tavan Tolgoi-Sainshand-Khuut-Choibalsan route has been included in the list of projects to be discussed during Prime Minister J.Erdenebat’s visit to Japan. We have prepared a presentation for it. The Minister of Roads and Transportation will accompany the Prime Minister during his visit as well.

The public is split on whether a railway would benefit the nation. Quite a number of people complain that railways are only good for exporting Mongolia’s wealth and resources to other countries. What’s your opinion on this?

I believe that based on accurate assessment of the current situation, Mongolia needs to develop a very good strategy for putting strategically important deposits into economic circulation and get the most benefits out of it. Everyone says it’s important to construct railways, thermal power plants and industrial complex, but what’s more important than that is identifying the right way and steps, as well as management, for developing these things. In my opinion, I think it’s better to first build railways and earn profit from transporting minerals and then start large projects. Because Mongolia didn’t do this, all projects were launched simultaneously and stopped at the same time due to lack of funds. I’m sure that everyone can see this.

How do you cooperate with Ulaanbaatar Railway JSC? What are the two state-owned railway companies working on currently and plan to do in the future together?

Besides transporting goods with Ulaanbaatar Railway with our own locomotives and equipment, we provide transport services to local entities and mining companies. We have been cooperating in every field, including in the expansion of railway transportation volume, reduction of workload, in boosting service quality, and increasing customer satisfaction.

At present, Mongolian Railway and Ulaanbaatar Railway are collaborating on improving operations of the Cargo Transshipment Facility, built in Zamiin-Uud soum with a grant from the Japanese government to enhance transit capacity and quality of railway services. Our cooperation will continue to expand in the future.

A professional team plays a vital role for conducting transportation operations. What kind of policy do you uphold in terms of human resources and how do you enforce it?

That’s right, a professional team is very important. The key to providing high-quality products and services is skilled personnel. Consistent to company policy, we’re taking various measures to form a skilled team and train professional personal for future activities.

Around 60 staff members, including engineers and technicians, were selected for iron ore transport operations and have been dispatched to rural communities. As part of our scholarship program, we sent 13 students to study and specialize in five different areas at a Chinese institute for transportation engineering, and another three students are studying through scholarship at the Transportation Institute of Mongolia.

We cooperate with vocational education and training centers (VETC) to have people trained within a short period of time. For instance, eight students are studying at the Railway VETC through scholarship. A total of 500 people are being trained in railway industry occupations at VETCs in Nalaikh and Sainshand cities.

What does Mongolian Railway plan to do in the future?

Besides completing ongoing projects at the highest quality, we plan to assist the Ministry of Roads and Transportation on projects aimed to develop some 150 railway related rules and regulations, set standards based on international practices, and amend relevant legislations.

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