Mongolia : Regional Logistics Development Project

Sovereign Project | 41192-013

The Project is implemented in Zamyn-Uud, a relatively poor area. The region is a desert and many people are poor and the economic growth necessary to reduce rural poverty has failed to develop because of inadequate transport services and high costs. The local governments and people living in the region see the development of the logistics facility as a key investment for addressing this problem. Logistics development is a part of the Government's program for the integrated development of free economic zone in this poor region, which shares borders with the People's Republic China (PRC) and is the main gateway for Mongolia's trade with the PRC and other parts of the world. The development of this facility is expected to play an important role in facilitating and integrating this poor and underdeveloped region, and stimulating international, regional and domestic trade. The proposed Project is in line with the National Development Plan and the Government's Regional Development Strategy.

Project Details

  • Project Officer
    Ganbaatar, Anand
    East Asia Department
    Request for information
  • Country/Economy
    Mongolia
  • Modality
  • Sector
    • Transport

Related Projects

Project Name
Regional Logistics Development Project
Project Number
41192-013
Country / Economy
  • Mongolia
Project Status
Closed
Project Type / Modality of Assistance
  • Loan
Source of Funding / Amount
Grant 0240-MON: Regional Logistics
Source Amount
Asian Development Fund US$ 5.00 million
Loan 2719-MON: Regional Logistics
Source Amount
Asian Development Fund US$ 40.00 million
Strategic Agendas
  • Environmentally sustainable growth
  • Inclusive economic growth
  • Regional integration
Drivers of Change
  • Gender Equity and Mainstreaming
  • Governance and capacity development
Sector / Subsector
  • Transport / Transport policies and institutional development

Gender
Some gender elements
Description

The Project is implemented in Zamyn-Uud, a relatively poor area. The region is a desert and many people are poor and the economic growth necessary to reduce rural poverty has failed to develop because of inadequate transport services and high costs. The local governments and people living in the region see the development of the logistics facility as a key investment for addressing this problem. Logistics development is a part of the Government's program for the integrated development of free economic zone in this poor region, which shares borders with the People's Republic China (PRC) and is the main gateway for Mongolia's trade with the PRC and other parts of the world. The development of this facility is expected to play an important role in facilitating and integrating this poor and underdeveloped region, and stimulating international, regional and domestic trade. The proposed Project is in line with the National Development Plan and the Government's Regional Development Strategy.

The Project is a key intervention in the transport sector, with many technical, operational, safety, and economic benefits. It seeks to introduce well developed logistics terminal equipped with modern technology for enhanced efficiency, increased throughput, and improved reliability-all of which will lead to a more affordable, faster, cheaper, safe transport services in Mongolia. ADB intervention in financing this facility is playing a catalytic role in facilitating the flow of further foreign and private capital to finance the development of logistics in Mongolia.

Project Rationale and Linkage to Country/Regional Strategy

Mongolia is a landlocked country and such countries face greater transportation challenges. Located between two large neighbors, Mongolia has no direct access to seaports and has to depend upon RF and the PRC for access to seaports. In the recent years, trade flows have been reoriented from RF and most of the imports (over 80%) are now coming from the PRC, from a border point in the southeast of the country called Zamyn-Uud. The bulk of Mongolia's exports also travel through Zamyn-Uud on its way to Tianjin port, the only port available to Mongolia for the export of its goods and international trade in the PRC. As consequence, the traffic handled at Zamyn-Uud witnessed explosive growth rates in the recent years. However, Zamyn-Uud is now badly congested, thereby affecting the imports, exports and the transit traffic. Though a number of reasons contribute to these delays (non-availability of rolling stock, change of gauge, delays at customs), the main reason is the grossly inadequate development of logistics at Zamyn-Uud in particular and in Mongolia in general.

Efficient and well-developed logistics are identified as the key to a cost effective and competitive transportation. Trade logistics, or the capacity to connect to international markets to ship goods, is critical for developing countries to improve their competitiveness, reap the benefits of globalization, and fight poverty more effectively in an increasingly integrated world. A World Bank funded study based on a world survey of international freight forwarders and express carriers, indicates that facilitating the capacity to connect firms, suppliers and consumers, are crucial in a world where predictability and reliability are becoming even more important than costs. Countries ability to connect to global markets is fast becoming a key aspect of a country's capacity to compete, grow, attract investment, create jobs and reduce poverty, and for those unable to connect, the costs of exclusion are large and growing. Unfortunately, Mongolia's performance in all indicators of logistics management is at the bottom end. Based on a worldwide survey completed by more than 800 logistics professionals, World Bank developed a comprehensive cross-country assessment of logistics performance in 155 countries called logistics performance index. Mongolia has an overall logistics performance index ranking of 141 (1 is the best and 155 is the worst), and its ranking for customs procedures is 149, logistics costs (including freight rates) is 144, infrastructure quality is 133, ability to track and trace shipments is 122, and timeliness in reaching a destination is 147. Mongolia's ranking clearly indicates serious issues in the development of logistics, which in turn is hurting its competitiveness and has serious repercussions for country's economic performance.

Impact

International and regional trade promoted in Mongolia

Project Outcome

Description of Outcome

An efficient, competitive, and reliable multimodal transport system developed at Zamyn Uud

Progress Toward Outcome
Under the project the contractor constructed the 4.347 km link road between Zamyn-Uud soum, ZULC and Zamyn-Uud " Ulaanbaatar state road in 2019. The construction of additional 1.184 km standard gauge railway in ZULC commenced on 2 September 2019 and completed in the same year.

Implementation Progress

Description of Project Outputs

1. A multimodal facility with facilities for road-to-road, road-to-rail, and rail-to-rail transshipment developed at Zamyn Uud

2. Terminal equipment and management systems procured and installed

3. Strengthened institutional capacity

Status of Implementation Progress (Outputs, Activities, and Issues)

The procurement of Zamyn-Uud Logistics Center (ZULC) civil works package was awarded and the contract was signed between Ministry of Road and Transport Development, project executing agency (EA) and China Railway 21st Bureau Group Co.,Ltd, the winning bidder on 1 February 2016. The contract for the construction supervision consultant was awarded to the Joint Venture of Soosung Engineering Co., Ltd. (Republic of Korea), Geo Zuraglal LLC (Mongolia), and NBCC LLC (Mongolia) and the contract was signed on 24 June 2016 with the EA.

Under the counterpart funding, the supplier for two rail mounted gantry cranes was selected and signed a contract with EA on 12 May 2017. The contractor completed the installation of gantry cranes at the project site. The EA awarded a contract for Computer-Based Interlocking (CBI) Railway Signaling and Communication works to the successful bidder and signed the contract on 19 March 2018.

The construction ZULC including CBI Railway Signaling and Communication work and the government financed rail mounted two gantry cranes were completed.

In Q2 2019, the PSC meetings were held three times and the decisions were made on (i) construction of additional 1.2 km railway with standard gauge in ZULC using the uncommitted loan and grant funds; (ii) the MTZ to complete the design and drawing of 1.2 km railway with standard gauge including the state expertise by early Aug 2019 ; and (iii) make a variation to the contract with China Railway 21st Bureau Group Co. Ltd, the existing contractor, for the construction of 1.2 km standard gauge railway. The EA and the contractor signed the contract variation and submitted the copy of it to ADB for issuance of PCUS. With this additional work, the EA is also making a contract variation to the consultant's contract for the construction supervision.

On 24 April 2019, the EA signed the contract variation with China Railway 21st Bureau Group Co.Ltd , the existing contractor, for the construction of 4.347 km access road between ZULC and Zamyn-Uud-Ulaanbaatar state road network and Zamyn-Uud soum. The contractor completed the link road construction work in 2019.

The updated procurement plan was approved on 10 July 2019, which includes the two new packages for Goods under Shopping method. Following the PP approval, the EA/PIU awarded the contracts in Q3 2019 and goods were supplied.

Recruitment of international consulting firm completed.

By the end of 2018, the construction ZULC including CBI Railway Signaling and Communication work and the government financed rail mounted two gantry cranes were completed. The technical commission working group, which was appointed from the Ministry of Road and Transport Development and other project stakeholders, visited the project site on 7 December 2018 and inspected the construction works. On 28-29 December 2018, state commission working group, was fielded in the project site and commissioned ZULC.

On 24 April 2019, state owned shareholding company MTZ (Mongolian Railway), the owner of the ZULC, and joint stock company UBTZ (Ulaanbaatar Railway) signed the lease agreement for the operation of ZULC.

Geographical Location
Zamiin Uud

Safeguard Categories

Environment
B
Involuntary Resettlement
C
Indigenous Peoples
C

Summary of Environmental and Social Aspects

Environmental Aspects
Environmental Management and Environmental Monitoring Plans have been prepared and responsibilities for implementation assigned. A full environmental impact assessment is not required.
Involuntary Resettlement
The project has not required any resettlement of affected people through land acquisition because it is a vacant desert area.
Indigenous Peoples
No indigenous peoples have been identified. If there were any, they would not be adversely affected by the project.

Stakeholder Communication, Participation, and Consultation

During Project Design
Five consultative meetings were held in Zamyn-Uud with local officials, businesses, and area residents during 2009-2010. Surveys were conducted of 450 area households (1,623 people), 90 businesses, 314 women, 130 poor households, and 7 minority households. In addition, some informal individual discussions and conversations were held with a number of residents. All support the project, which they expect will have positive impacts on theri lives through increased economic activity.
During Project Implementation
Support actions and assist in resolving implementation constraints in consultation with relevant Government counterparts and other stakeholders

Business Opportunities

Consulting Services

All consulting services will be recruited according to ADB's Guidelines on the Use of Consultants (2013, as amended from time to time). A total of 172 person months of consulting services (60 international, 112 national), grouped into one pakcage will be funded under the Project, to support the EA in (i) Preparation of detailed design and implementation supervision; (ii) training of PIU staff; (iii) terminal operations management; (iv) environmental monitoring; (v) procurement management; and (vi) project implementation and institutional capacity improvement. Consultants will be engaged using QCBS, with standard ratio of 80:20.

The consulting firm for construction supervision of the construction of Zamyun-Uud Logistics center was contracted.

Procurement

All procurement of civil works and goods will be undertaken in accordance with ADB's Procurement Guidelines (2010, as amended from time to time). International Competitive Biddiong (ICB) will be used for civil works and goods contracts estimated to cost more than $1 million and $500,000, respectively. National Competitive Bidding (NCB) will be used for civil works and goods contracts estimated to cost below ICB thresholds but more than $100,000. All ICB contracts are subject to prior review. Prior review and approval of ADB of the procurement documents (bidding and contract) is required. For NCB, prior review for first English language version of bidding documents which will be used as a model for subsequent procurement.

The procurement of civil works for construction of Zamyn-Uud Logistics Center was finalized and contract was signed.

Contact

Responsible ADB Officer
Ganbaatar, Anand
Responsible ADB Department
East Asia Department
Responsible ADB Division
Mongolia Resident Mission (MNRM)
Executing Agencies
Ministry of Road and Transport Development of Mongolia

Timetable

Concept Clearance
15 Oct 2010
Fact Finding
03 Oct 2010 to 08 Oct 2010
MRM
29 Oct 2010
Approval
13 Dec 2010
Last Review Mission
-
Last PDS Update
30 Sep 2020

Funding

Grant 0240-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
13 Dec 2010 03 Jan 2011 23 Mar 2011 30 Jun 2016 30 Jun 2020 18 Dec 2020
Financing Plan
  Total (Amount in US$ million)
Project Cost 5.00
ADB 5.00
Counterpart 0.00
Cofinancing 0.00
Grant Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 19 Aug 2022 5.00 0.00 100%
Cumulative Disbursements 19 Aug 2022 5.00 0.00 100%

Loan 2719-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
13 Dec 2010 03 Jan 2011 23 Mar 2011 30 Jun 2016 30 Jun 2020 17 Dec 2020
Financing Plan
  Total (Amount in US$ million)
Project Cost 66.64
ADB 40.00
Counterpart 26.64
Cofinancing 0.00
Loan Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 19 Aug 2022 35.47 0.00 100%
Cumulative Disbursements 19 Aug 2022 35.47 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory - - Satisfactory

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

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In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.


Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Title Document Type Document Date
Regional Logistics Development Project: Environmental Monitoring Report (July-December 2019) Environmental Monitoring Reports Dec 2019
Regional Logistics Development Project: Environmental Monitoring Report (January-June 2019) Environmental Monitoring Reports Jun 2019
Regional Logistics Development Project: Environmental Monitoring Report (July-December 2018) Environmental Monitoring Reports Dec 2018
Regional Logistics Development Project: Environmental Monitoring Report (January-June 2018) Environmental Monitoring Reports Jun 2018
Regional Logistics Development Project: Environmental Monitoring Report (August-December 2017) Environmental Monitoring Reports Dec 2017
Regional Logistics Development Project: Environmental Monitoring Report (January-July 2017) Environmental Monitoring Reports Jul 2017
Regional Logistics Development Project: Environmental Monitoring Report (January-December 2016) Environmental Monitoring Reports Dec 2016
Regional Logistics Development Project: Environmental Monitoring Report (January-December 2015) Environmental Monitoring Reports Oct 2016
Regional Logistics Development Project: Environmental Monitoring Report (January-December 2014) Environmental Monitoring Reports Dec 2014
Regional Logistics Development Project: Environmental Monitoring Report (June to December 2012) Environmental Monitoring Reports Dec 2012
Regional Logistics Development Project Environmental Monitoring Reports Jan 2011
Regional Logistics Development Project: Initial Environmental Examination Initial Environmental Examination Nov 2010
Regional Logistics Development Project: Initial Environmental Examination Initial Environmental Examination Nov 2010

Evaluation Documents See also: Independent Evaluation

None currently available.


Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
Monitoring and Evaluation Specialist Individual - Consulting Closed
Environmental and Social Development Monitoring Specialist Individual - Consulting Closed
L2719/G0240-MON: Regional Logistics Development Project [W2] Invitation for Bids Closed

Contracts Awarded

Contract Title Approval Number Contract Date Contractor | Address Executing Agency Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
COMPUTER-BASED INTERLOCKING RAILWAY SIGNALING AND COMMUNICATION, RE: W2; Loan 2719 22 Mar 2018 CHINA RAILWAY 21ST BUREAU GROUP CO. LTD. | NO.921, BEIBINHE ROAD, LANZHOU, CHINA CHINA,PEOPLE'SREP.OF Ministry of Road and Transport Development 1,457,426.00 1,457,426.00

Procurement Plan

Title Document Type Document Date
Regional Logistics Development Project: Procurement Plan Procurement Plans Jul 2019