Mongolia : Ulaanbaatar Urban Services and Ger Areas Development Investment Program

Sovereign Project | 45007-003

The program aims to initiate an urban redevelopment process in ger areas. Improving infrastructure within the ger area subcenters and connectivity with the city core center is critical for inclusiveness and mobility of people and creating clusters of urban subcenters. Better urban planning and development of infrastructure along priority roads will initiate a structural change of subcenter urban fabric. This will (i) improve residents' access to basic urban services, public space, and socioeconomic facilities; (ii) support local economic development; (iii) allow residents and businesses to take advantage of urban economies; and (iv) provide better housing options. The changes in land use and higher urban density will improve water, sanitation, and heating services delivery.

Project Name Ulaanbaatar Urban Services and Ger Areas Development Investment Program
Project Number 45007-003
Country / Economy Mongolia
Project Status Active
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
MFF Facility Concept 0078-MON: Ulaanbaatar Urban Services and Ger Areas Development Investment Program
Asian Development Fund US$ 70.34 million
Ordinary capital resources US$ 89.66 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Private sector development
Sector / Subsector

Water and other urban infrastructure and services /

Gender Effective gender mainstreaming
Description The program aims to initiate an urban redevelopment process in ger areas. Improving infrastructure within the ger area subcenters and connectivity with the city core center is critical for inclusiveness and mobility of people and creating clusters of urban subcenters. Better urban planning and development of infrastructure along priority roads will initiate a structural change of subcenter urban fabric. This will (i) improve residents' access to basic urban services, public space, and socioeconomic facilities; (ii) support local economic development; (iii) allow residents and businesses to take advantage of urban economies; and (iv) provide better housing options. The changes in land use and higher urban density will improve water, sanitation, and heating services delivery.
Project Rationale and Linkage to Country/Regional Strategy

In 2012 Ulaanbaatar had a population of 1.3 million. Since the 1990s, it has had limited formal extension of its core, which largely comprises apartment blocks with comprehensive utility services, including dedicated heating, water, and sanitation. However, successive waves of in-migration with ger tents have reshaped the city's geography, with (i) little upgrading or extension of basic urban services; and (ii) government policy, since 2003, to give each citizen about 700 square meters of land. A vast low-density peri-urban area, named ger areas, now extends around the city core, characterized by unplanned settlement of low- and medium-income households with land ownership, unserviced plots, unpaved roads, and poor facilities. The ger area population is estimated at 800,000, representing 60% of Ulaanbaatar or 30% of the country population. Despite their size, ger areas have until recently been considered temporary settlements. However, their official integration in the 2013 city master plan provides the necessary provision to plan the redevelopment of a formal peri-urban area.

Living conditions in ger areas are difficult. Poor sanitationhouseholds almost exclusively rely on open pit latrinesand poor waste collection have created highly unsanitary living conditions. Air pollution is among the most severe in the world, particularly during winter because of inadequate household heating systems and unpaved roads. Access to water, supplied by kiosks operated by the Ulaanbaatar Water Supply and Sewerage Authority (USUG), is limited. In 2011, most of the 40,000 people migrating to Ulaanbaatar settled in ger areas; by 2022 the population is estimated to grow by 400,000 from in-migration and natural growth. Under current situation, the forecasted population increases is a serious threat to the city environment and the health of the population if the situation is not improved.

Lack of long-term planning, infrastructure investment, and land use regulation in ger areas have resulted in haphazard development, limited availability of space for public facilities, poor access to socioeconomic services, reduced livelihood opportunities, and insecure neighborhoods. The lack of basic urban infrastructure is constraining rational and dynamic urban development, increasing the costs of doing business and of accessing services. The city core where jobs and services are concentrated now has unprecedented congestion. The service gap between the city core and ger areas means ger residents are poorly integrated in the urban economy; it is one of the most urgent and difficult development challenges. While various government and development partner initiatives have significantly improved living conditions in ger areas, approaches have generally focused on specific sectors, failing to design a sustainable vision and provide integrated solutions for the problems of peri-urban development.

Subcenter upgrading. High construction cost, lack of urban planning, and inadequate infrastructure constrain the upgrading of ger areas. These areas are predominately residential with pockets of activity nodes, called subcenters, providing commercial and administrative services. The influence area of a subcenter varies from 30,000 to 100,000 people. Despite the critical function of subcenters in overall spatial and local development, urban services have not been substantially improved. The lack of basic infrastructure limits economic growth and increases negative environmental impacts.

Impact

Improved living conditions in Ulaanbaatar

Project Outcome
Description of Outcome

A network of livable, competitive, and inclusive subcenters in Ulaanbaatar's ger (yurt or traditional tents) areas

Progress Toward Outcome The availability period for the MFF program has been approved for extension until 11 Dec 2026. Tranche 1 closed on 31 December 2021, and its financial closing will be processed once the arbitration issue with one civil works contractor has been resolved. The loan closing date of tranches 2 and 3 were also extended up to 11 Dec 2026 and all procurement activities are being closely monitored so that all works will be completed within the revised closing date. Three of the four outcome indicators are achieved to date: density of targeted subcenters is 134 person per hectare, the number of establishments increased by 41.9% against 30% target, and the unit production of water has been reduced. One outcome indicator has been partially achieved: percent of population with improved access to water, sanitation, and heating increased to 50%.
Implementation Progress
Description of Project Outputs

1. Roads and urban services are expanded within the targeted subcenters and connectivity between subcenters is improved

2. Economic and public services in subcenters are improved

3. Service providers become more efficient

4. Institutions and capacity for urban development, program management, and service delivery are strengthened

4.1 Subcenter development and community engagement

4.2 Operations and management of service providers improved

4.3 Strengthened program implementation capacity

Status of Implementation Progress (Outputs, Activities, and Issues) Implementation of tranches 2 and 3 slowed considerably due to the loss of the 2020-2022 construction seasons because of the following reasons: (i) seven periods of strict lockdowns and five periods of quarantine related to COVID-19; (ii) constricted and extremely slow cross-border trade because of prolonged restrictions at the People's Republic of China (PRC)-Mongolia border brought about by the PRC's zero-COVID-19 policy and the associated supply chain disruption; the Russian invasion of Ukraine, which further delayed imports of equipment from Europe; (iii) substantial price escalation and overruns in the costs of civil works and goods, which resulted in bidders being reluctant to bid for packages under the project, with multiple cases of rebidding; and (iv) substantial delays in mobilizing MUB counterpart financing because of the slowing economy and the resulting sharp reduction of state budget revenues.
Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects The environmental safeguard category for Project 1 is B. Anticipated impacts from infrastructure components are site-specific and reversible, are not unprecedented in scale, and mitigation measures can be easily designed. An initial environmental examination for Project 1, and an environment assessment and review framework for the entire investment program were prepared and disclosed on ADB's website in accordance with ADB's Safeguard Policy Statement (2009).
Involuntary Resettlement A land acquisition and resettlement framework for the investment program as a whole and resettlement plans for individual subprojects were prepared and disclosed on ADB's website. In view of the preliminary analysis which indicated significant land acquisition and involuntary resettlement, the involuntary resettlement category for Project 1 is A. During PPTA, efforts were made to minimize resettlement.
Indigenous Peoples The categorization for indigenous peoples is C. The review of the subcenters done by TA 7591 indicated that the population in the project area does not include communities that could be treated as indigenous peoples under the ADB's Safeguard Policy Statement (2009).
Stakeholder Communication, Participation, and Consultation
During Project Design Consultation with initial stakeholders included ger area residents, private and public services, service providers in the subcenters, local government, Ulaanbaatar Municipal Government, public utilities (i.e., USUG and heating companies). The PPTA conducted a poverty and social analysis and addressed social safeguards. A socioeconomic survey, affordability survey, stakeholder workshops, focus group discussions, and key informant interviews were also conducted during the PPTA.
During Project Implementation Relevant sections of the Facility Administration Manual such as social action plan, gender action plan, resettlement plan, environmental management plan, and stakeholder communication strategy provide information on stakeholder communication, participation, and consultation for the investment program.
Business Opportunities
Consulting Services The investment program will include a program management facility under which consulting firm will assist MUB in overseeing program development, implementation, and management. Consulting firm specializing in engineering and urban services operation will be engaged to develop the capacity of service providers in compliance with ADB's Guidelines on the Use of Consultants (2013, as amended from time to time).
Procurement All procurement of goods and works will be undertaken in accordance with ADB's Procurement Guidelines (2015, as amended from time to time).
Responsible ADB Officer Mamatkulov, Raushanbek
Responsible ADB Department Sectors Group
Responsible ADB Division Water and Urban Development Sector Office (SG-WUD)
Timetable
Concept Clearance 14 Dec 2011
Fact Finding 20 Jun 2013 to 03 Jul 2013
MRM 02 Sep 2013
Approval 12 Dec 2013
Last Review Mission -
Last PDS Update 26 Mar 2024

MFF Facility Concept 0078-MON

Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 160.00 Cumulative Contract Awards
ADB 160.00 - 0.00 0.00 %
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 - 0.00 0.00 %

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.

Title Document Type Document Date
Amendment to the Framework Financing Agreement: Ulaanbaatar Urban Services and Ger Areas Development Investment Program Framework Financing Agreement Jun 2023
Ulaanbaatar Urban Services and Ger Areas Development Investment Program: Revised Facility Administration Manual Facility Administration Manual Jun 2023
Ulaanbaatar Urban Services and Ger Areas Development Investment Program: Proposed Extension of Facility Availability Period Change in Scope, Amount, and Implementation Arrangements Jun 2023
Ulaanbaatar Urban Services and Ger Areas Development Investment Program: Periodic Financing Request 1 Periodic Financing Request Reports Dec 2013
Framework Financing Agreement for Ulaanbaatar Urban Services and Ger Areas Development Investment Program Framework Financing Agreement Dec 2013
Ulaanbaatar Urban Services and Ger Areas Development Investment Program: Facility Administration Manual Facility Administration Manual Nov 2013
Ulaanbaatar Urban Services and Ger Areas Development Investment Program: Report and Recommendation of the President Reports and Recommendations of the President Nov 2013
Ulaanbaatar Urban Services and Ger Areas Development Investment Program: Gender Action Plan for Project 1 Gender Action Plans Nov 2013
Ulaanbaatar Urban Services and Ger Areas Development Investment Program: Procurement Plan Procurement Plans Nov 2013
Ulaanbaatar Urban Services and Ger Areas Development Investment Program Initial Poverty and Social Analysis Dec 2011

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
Ulaanbaatar Urban Services and Ger Areas Development Investment Program: Environmental Assessment and Review Framework Environmental Assessment and Measures Feb 2017
Ulaanbaatar Urban Services and Ger Areas Development Investment Program - Tranche 2: Land Acquisition and Resettlement Framework Resettlement Frameworks Nov 2016
Ulaanbaatar Urban Services and Ger Areas Development Investment Program - Tranche 2: Environmental Assessment and Review Framework Environmental Assessment and Review Framework Aug 2016
Ulaanbaatar Urban Services and Ger Areas Development Investment Program - Bayankhoshuu Subcenter: Resettlement Plan Resettlement Plans Apr 2016
Ulaanbaatar Urban Services and Ger Areas Development Investment Program: Bayankhoshuu Sub-center Sewer Main Collector Pipes - Resettlement Plan Resettlement Plans Jun 2015
Ulaanbaatar Urban Services and Ger Areas Development Investment Program: Selbe Sub-center Sewer Main Collector Pipes - Resettlement Plan Resettlement Plans Jun 2015
Ulaanbaatar Urban Services and Ger Areas Development Investment Program Initial Environmental Examination Oct 2013
Ulaanbaatar Urban Services and Ger Areas Development Investment Program Resettlement Frameworks Aug 2013
Ulaanbaatar Urban Services and Ger Areas Development Investment Program: Selbe Subcenter Improvement Subproject Resettlement Plans Aug 2013
Ulaanbaatar Urban Services and Ger Areas Development Investment Program: Bayankhoshuu Subcenter Improvement Subproject Resettlement Plans Aug 2013
Ulaanbaatar Urban Services and Ger Areas Development Investment Program Environmental Assessment and Review Framework Jul 2013

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
EIB 83097: Ulaanbaatar Urban Services and Ger Areas Development Investment Program: Tranche 1 [WSC16A] Invitation for Bids Closed
Detailed Design and Construction Supervision of Affordable Housing Pilot Project in Selbe Subcenter Firm - Consulting Closed

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

Title Document Type Document Date
Ulaanbaatar Urban Services and Ger Areas Development Investment Program: Procurement Plan Procurement Plans Nov 2013