Project Name
Regional Improvement of Border Services
Project Number
47174-001
Country / Economy
  • Mongolia
Project Status
Active
Project Type / Modality of Assistance
  • Loan
Source of Funding / Amount
Loan 3387-MON: Regional Improvement of Border Services
Source Amount
Asian Development Fund US$ 27.00 million
Loan 3810-MON: Regional Improvement of Border Services Project (Additional Financing)
Source Amount
Concessional ordinary capital resources lending US$ 27.00 million
Strategic Agendas
  • Inclusive economic growth
  • Regional integration
Drivers of Change
  • Gender Equity and Mainstreaming
  • Governance and capacity development
Sector / Subsector
  • Industry and trade / Trade and services

Gender
Some gender elements
Description
The project will address the core problem of inefficient trade processes through rehabilitation and provision of modern equipment in selected border crossing points, upgrading the Customs Automated Information System and preparatory work for the establishment of a single window system.
Project Rationale and Linkage to Country/Regional Strategy

Located between the People's Republic of China (PRC) and the Russian Federation, Mongolia is one of the most sparsely populated countries in the world. As a vast land-locked country (1.5 million square kilometers) regional economic cooperation and trade is critical to promote inclusive economic growth. Geography adds dramatically to the development challenges facing Mongolia resulting in high trade transaction costs.

International trade has always been important for Mongolian economy given its abundance of natural resources and its agricultural sector. In recent years, much progress has been made to liberalize trade regimes and conclude free trade agreements with trading partners like Japan, which would help Mongolia boost exports. However, market access alone is not a sufficient condition for harnessing the benefits of trade for development. Poor trade facilitation significantly reduces Mongolia's competitiveness in global markets. Therefore, improving connectivity and cross-border cooperation will address these high costs.

Mongolia is a member of the CAREC program. Under the framework of CAREC, the Transport and Trade Facilitation Strategy 2020 focuses on the development of six CAREC corridors through infrastructure investments and trade facilitation initiatives to improve the movement of goods and people through and across these corridors. In addition, the National Road Action Plan is aimed at improving transport services, reducing vehicle operations costs and providing regional links to connect Mongolia to the neighboring foreign sea ports.

Impact

Trade and competitiveness increased

Project Outcome

Description of Outcome

Cost and time of compliance with trade procedures reduced

Progress Toward Outcome
Construction work at Sukhbaatar BCP and Borshoo BCP have been completed and subject to State expertise acceptance. Civil works at Bichigt BCP have commenced as of Q2 2023. Construction works for Altanbulag BCP and its linked road are progressed at 85%-95% as of 20 September 2023.

Implementation Progress

Description of Project Outputs

Facilities and equipment at BCPs upgraded and improved

Communication infrastructure for CAIS improved and MCGA system made interoperable.

Preparatory work for single-window system undertaken

Capacity of relevant border agencies improved

Status of Implementation Progress (Outputs, Activities, and Issues)
CAIS functional requirements developed. The consultant's contract has been extended until 1 May 2022 due to the COVID-19 outbreak related delays. "The Capacity Development of users of CAIS" is approved by the MCGA. All required equipment for the upgraded CAIS system have been procured and handed over to MCGA in Q2 2019 and Q3 2021. The "Performance Certificate" certifying the completion and acceptance of work packages carried out under the consulting services were submitted as an attachment to the official letter dated 26 April 2022 issued by the MCGA. Testing and introduction of CAIS system improvements and relevant training are carried out in Custom houses and branches. MCGA system/CAIS will seamlessly exchange information with other government agencies' systems through the government's data exchange platform "Khur" and "E-Mongolia" platform started from Q4 2021. CAIS upgrade work has been completed and the EA's final approval of the consultant's report is pending. It's technically impossible to establish separate lanes for inspection of women traders. Thus, during preparation of the additional financing project it's proposed to merge the target with more implementable and practical target indicator of an Universal Standard Facilities (cater to PWD, elderly, and nursing mothers), which are part of the designs of the BCP facilities. Civil works' contracts are progressing at various levels: (i) rehabilitating the Altanbulag BCP stands at 85%, (ii) construction of Single Stop Service Center at Sukhbaatar BCP is completed, (iii) construction of a shortcut road connecting Altanbulag BCP at 95%, (iv) rehabilitation of Borshoo BCP at 99%, and (v) Borshoo BCP road and utility connection at 100%. A civil work contractor for Bichigt BCP road and utility connection is on board in Q4 2022 and commenced its services in May 2023. Civil work contractor for Bichigt BCP facilities is contracted and construction work has commenced on 17 July 2023. Procurement of needed equipment under 4 packages is ongoing and bids were opened on 23 June 2023. The EA's BEC is reviewing the bids. Consulting firm to (i) provide management advisory service and (ii) assess an existing institutional arrangement to carry out preparatory work for the SEW is completed. The consultant submitted "As is" report; "to-be" report; change management report; cost estimates and technical requirement report. The MCGA and Investment and Trade Agency are appointed as the lead agency of FTSEW system by the order 178 of the Government on 17 May 2023. Since the Government has appointed lead agency for the implementation of SEW, the recruitment of the consulting firm to provide technical consultancy to carry out SEW will be initiated. Terms of reference of the consulting firm to provide technical consultancy to carry out SEW need to be updated. Capacity building needs assessment of all border agencies is being conducted by the Capacity Development Specialist and some trainings have been conducted in 2023.
Geographical Location
Nation-wide

Safeguard Categories

Environment
B
Involuntary Resettlement
B
Indigenous Peoples
C

Summary of Environmental and Social Aspects

Environmental Aspects
Implementations of the IEE, EMP and CRVA are on track. Semi-annual Environmental Report for 2023 have been reviewed and uploaded in the ADB website.
Involuntary Resettlement
The LARP has been reviewed and accepted by ADB and posted on ADB's website. Semi-annual Social Monitoring Report for 2023 has been posted on the ADB website.
Indigenous Peoples
None

Stakeholder Communication, Participation, and Consultation

During Project Design
Project was designed in close consultation with relevant stakeholders, including government agencies responsible for regulating international trade, the trade community, and the private sector.
During Project Implementation
The project is being implemented through close coordination with relevant stakeholders, including government agencies and the private sector. The project team closely coordinates and consults with all stakeholders through series of events organized by the project and by the government. Moreover, public consultations were organized in preparations of the EMP and LARP.

Contact

Responsible ADB Officer
Dalaikhuu, Unurjargal
Responsible ADB Department
Sectors Group
Responsible ADB Division
Transport Sector Office (SG-TRA)
Executing Agencies
Ministry of Finance (formerly Ministry of Finance and Economy)
Office of the National Committee for Port Revival

Timetable

Concept Clearance
04 Mar 2016
Fact Finding
01 Feb 2016 to 05 Feb 2016
MRM
11 Mar 2016
Approval
22 Apr 2016
Last Review Mission
-
Last PDS Update
27 Sep 2023

Funding

Loan 3387-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
22 Apr 2016 28 Apr 2016 11 Jul 2016 30 Jun 2022 31 Dec 2025 -
Financing Plan
  Total (Amount in US$ million)
Project Cost 29.07
ADB 27.00
Counterpart 2.07
Cofinancing 0.00
Loan Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 17 Jun 2024 19.94 0.00 76%
Cumulative Disbursements 17 Jun 2024 18.49 0.00 70%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory Satisfactory - Satisfactory

Loan 3810-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
30 Aug 2019 02 Oct 2019 30 Oct 2019 30 Jun 2024 31 Dec 2025 -
Financing Plan
  Total (Amount in US$ million)
Project Cost 29.78
ADB 27.00
Counterpart 2.78
Cofinancing 0.00
Loan Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 17 Jun 2024 15.42 0.00 57%
Cumulative Disbursements 17 Jun 2024 10.72 0.00 40%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory Satisfactory - Satisfactory
 
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Source URL: https://www.adb.org/projects/47174-001/main