Built between 1947-1961, Trans-Mongolian railway (TMR) connects Ulan-Ude, Russia and Jining, China. Due to limited transportation capacity of 30mln tones per annum along the route, TMR needs to expand to meet transportation demand between China and Russia and China and Europe. The Project aims to increase TMR's transportation by 100mln tones per annum.
Government of Mongolia
Investment, Project Financing, Corporate Advisory
Total transportation volume for international trade between China and Europe reaches 3 billion tones per annum, 98% of which have been conducted by maritime transport. Since 1996, transportation authorities of respective countries including Germany, Poland, Russia, Mongolia, and China have agreed to shift about 20% of total transportation volume into railway transportation by 2025. 600 million tones - which means this 20% - can be divided for Trans-Asian, Trans-Mongolian, and Trans-Sibirian railways, with up to 200 million tones per year, respectively.
In addition to transportation capacity, main advantage of railway transport is its speed: freight can reach from China to Europe within 12 days, a quarter of time required by maritime transport, which needed by high economic integration among countries in coming years.
Another strategic reason for the expansion of TMR is that economic integration between China and Russia has increased fivefold in last ten years and it is expected to increase tenfold in next twenty years, whereas minerals to be exploited by Russia shall be urgently needed and in large volume for industrial outcome by China.
The Project for dual track of TMR shall be another mega project in Mongolia, bringing FDI equivalent to Oyu Tolgoi project.
As think thank for railway transportation, we've been following the initiative since 2004 and organized the financing of bankable feasibility study for the Project. Recently, we contributed to mutual understanding of three neighbors - China, Russia, and Mongolia - on the initiative to have it included into Economic Corridor among them.