Mongolia : Ulaanbaatar Urban Services and Ger Areas Development Investment Program - Tranche 3
Ulaanbaatar city is home to more than 1.44 million people. The central city core with comprehensive utility services is surrounded by vast, substandard, and unserved ger areas of about 100 square kilometers. Ger areas accommodate about 60% of the city's population (about 840,000 inhabitants) and have spread and expanded through successive waves of migration. These settlements of low- and medium-income households are characterized by loosely aligned plots, creating irregular unpaved pathways. The majority of households living here have land tenure. Lack of basic urban infrastructure and services in ger areas has caused severe pollution that threatens city residents' health. Obsolete household coal stoves for heating, and traffic congestion caused by unplanned road networks have helped generate some of the highest levels of air pollution in the world.
Project Details
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Project Officer
Mamatkulov, Raushanbek
Sectors Group
Request for information -
Country/Economy
Mongolia -
Sector
- Water and other urban infrastructure and services
Related Projects
| Project Name | Ulaanbaatar Urban Services and Ger Areas Development Investment Program - Tranche 3 | ||||||||||||
| Project Number | 45007-009 | ||||||||||||
| Country / Economy | Mongolia |
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| Project Status | Active | ||||||||||||
| Project Type / Modality of Assistance | Loan |
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| Source of Funding / Amount |
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| Operational Priorities | OP1: Addressing remaining poverty and reducing inequalities OP2: Accelerating progress in gender equality OP3: Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability OP4: Making cities more livable OP5: Promoting rural development and food security OP6: Strengthening governance and institutional capacity OP7: Fostering regional cooperation and integration |
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| Sector / Subsector |
Education / Education sector development Transport / Urban roads and traffic management Water and other urban infrastructure and services / Urban policy, institutional and capacity development - Urban slum development |
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| Gender | Effective gender mainstreaming | ||||||||||||
| Description | Ulaanbaatar city is home to more than 1.44 million people. The central city core with comprehensive utility services is surrounded by vast, substandard, and unserved ger areas of about 100 square kilometers. Ger areas accommodate about 60% of the city's population (about 840,000 inhabitants) and have spread and expanded through successive waves of migration. These settlements of low- and medium-income households are characterized by loosely aligned plots, creating irregular unpaved pathways. The majority of households living here have land tenure. Lack of basic urban infrastructure and services in ger areas has caused severe pollution that threatens city residents' health. Obsolete household coal stoves for heating, and traffic congestion caused by unplanned road networks have helped generate some of the highest levels of air pollution in the world. Households exclusive reliance on open pit latrines and a poor solid waste collection system has led to poor sanitation, along with limited access to water supplied by water kiosks. There is a lack of basic social and public facilities, such as green spaces, parks, sports centers, kindergartens, and primary health centers. The upgrading of ger areas is constrained by inadequate urban infrastructure, lack of urban planning, poor urban services, and limited public spaces and facilities. On 12 December 2013, the Asian Development Bank (ADB) approved the Ulaanbaatar Urban Services and Ger Areas Development Investment Program using multitranche financing facility (MFF) modality, comprising three tranches. On 16 April 2020, the President approved the extension of the MFF availability period from 9 years to 10 years (or from 31 December 2022 to 11 December 2023) to ensure the timely implementation of tranche 3. The total program cost is $320.00 million, of which $163.70 million will be financed by ADB; $96.00 million by the Municipality of Ulaanbaatar (MUB); and up to 50.00 million euros ($60.30 million equivalent at the time of approval) parallel cofinancing by the European Investment Bank. This program is the result of a successful policy dialogue between ADB and the MUB that catalyzed the (i) integration of ger areas in the Ulaanbaatar city master plan for the first time in December 2013, and (ii) adoption of a priority service and economic hubs (subcenters) development strategy in ger areas as a catalyst for more polycentric and inclusive city development. Under this program, a road map has been developed to establish a network of well-developed city subcenters to provide jobs, housing, and economic opportunities with reduced soil and air pollution. The program has introduced a paradigm shift and replicable mechanism to systematically extend modern infrastructure and key social facilities to ger area. The framework financing agreement was signed on 9 December 2013 and ratified by the Mongolian Parliament on 23 May 2014. Tranche 3 of the MFF will align with the program strategic road map to support the redevelopment of two additional subcenters in the eastern and western ger areas (Sharkhad and Tolgoit). |
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| Project Rationale and Linkage to Country/Regional Strategy | Ulaanbaatar city is home to over 1.44 million people. The central core of the city largely comprises apartment blocks with comprehensive utility services. Surrounding the central core is a vast, low density, about 100 square kilometers of peri-urban area (so-called ger areas) with poor infrastructure that accommodates about 54.5% of the city's population (approximately 800,000 inhabitants). Ger areas have spread and expanded through successive waves of migration. These settlements of low- and medium-income households are characterized by loosely aligned plots, creating irregular pathways that remain unpaved. The majority of households living here have land tenure. Lack of basic urban services causes severe pollution that threatens the city residents' health because of (i) unimproved individual coal stoves used by most ger area residents during winter which generate high air pollution; (ii) poor sanitation, since households almost exclusively rely on open pit latrines; (iii) poor solid waste collection which creates highly unsanitary living conditions, along with limited access to water supplied by water kiosks; and (iv) traffic congestion caused by unmanaged road network. The upgrading of ger areas is constrained by inadequate urban infrastructure, lack of urban planning, poor urban services and limited public spaces and facilities. | ||||||||||||
| Impact | Improved living conditions in Ulaanbaatar (Ulaanbaatar City Master Plan [2030]) |
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| Project Outcome | |
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| Description of Outcome | A network of livable, competitive, and inclusive subcenters in Ulaanbaatar's ger areas |
| Progress Toward Outcome | Similar to Tranche 2, Tranche 3 also encountered project implementation delays due to COVID-19 pandemic travel restrictions, PRC-Mongolia border restrictions, Russian invasion of Ukraine, substantial price escalation and cost overruns, which resulted in reluctance of bidders to bid for the packages under the project and multiple cases of rebidding; and challenges with the MUB counterpart financing due to sharp economic slowdown and the state budget fiscal challenges. Following the extension of the MFF program until 11 Dec 2026, Tranche 3 will also be processed for extension until that date. |
| Implementation Progress | |
| Description of Project Outputs | Roads and urban services expanded within the targeted subcenters and connectivity between subcenters improved Economic and public services in targeted subcenters improved Institutional capacity for program management and urban development strengthened |
| Status of Implementation Progress (Outputs, Activities, and Issues) | Under ADB financing, all consulting services packages have been awarded, as well as the civil works contract for the training center in Tolgoit subcenter and site cleaning works for subcenter locations (phase 1). The following five works packages were advertised in December 2022 and March 2023: roads and associated utility pipelines (phases 1 and 2); telecommunication, electrical substations, and power distribution cable line in Tolgoit subcenter; green and public spaces (phases 1 and 2); and landscaping and playground for kindergarten. The primary health center and the primary school packages will be advertised in October 2023. The following three works packages have been awarded under EIB financing: flood protection and drainage in Tolgoit subcenter; water, sewage, and heating secondary connection in Tolgoit kindergartens and schools using advanced technology; and shelter for victims of gender-based violence. Six EIB packages were advertised in the last 4 months. |
| Geographical Location | Ulaanbaatar |
| Safeguard Categories | |
|---|---|
| Environment | B |
| Involuntary Resettlement | A |
| Indigenous Peoples | C |
| Summary of Environmental and Social Aspects | |
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| Environmental Aspects | The initial environmental examination and environmental management plan for tranche 3 were prepared based on the feasibility study report, and were disclosed on the ADB website on 8 April 2020. A general environmental impact assessment for tranche 3 was issued by the Ministry of Environment and Tourism in October 2019, which concluded that tranche 3 is subject to detailed environmental impact assessment (DEIA) pursuant to the requirements of the Mongolian Law on Environmental Impact Assessment (2012). The draft DEIA has been prepared and is expected to be approved by the Ministry of Environment and Tourism after public consultation meetings at the khoroo (municipal subdistrict) level are conducted. Approval of the DEIA is a prerequisite for starting the civil works. Public consultation meetings that identified environmental issues and concerns, and appropriate impact mitigations, were conducted in June 2019 in Sharkhad and Tolgoit. The environmental assessment and review framework prepared for the entire investment program was updated and disclosed on the ADB website on 8 April 2020. The project implementation consulting team will develop and deliver training courses to MUB and PMO staff to strengthen their capacity to oversee and monitor contractors' implementation of the environmental management plan. |
| Involuntary Resettlement | The 2016 resettlement framework for the MFF has been updated based on the implementation experiences in tranche 1 and to reflect the changes in the national requirements. The updated resettlement framework for tranches 2 and 3 is compliant with ADB's Safeguard Policy Statement and does not lower the standards adopted in the 2016 resettlement framework. A land acquisition and resettlement plan (LARP) for the two tranche 3 subcenters has been prepared based on the feasibility designs and the updated resettlement framework. The LARP will be updated upon completion of the detailed designs of the subprojects. A total of 846 land parcels with a land area of 297,740 square meters will be affected, of which 474 will be fully affected. A total of 1,350 households will be affected, including 1,324 residential households and 26 business entities; 1,270 of the 1,350 affected households will experience major impacts. In addition to the 26 business entities, economic displacement impacts will occur to 87 residential households that have income-generating activities on their residential parcels. A total of 5,170 people are estimated to be affected. A social housing facility with 50 apartment units will be constructed under tranche 3 and will be utilized for relocation of affected households without legal title to the impacted properties. The institutional arrangements and grievance redress mechanisms for resettlement implementation established under tranche 1 will be continued for tranche 3, with adequate enhancements incorporating tranche 1 implementation experiences and lessons. While the PMO and MUB have the required capacity and staff with experience in implementing LARPs, ADB will continue its technical assistance programs for capacity building initiatives on livelihood restoration and the training of PMO, MUB, and Land Management Agency staff on the implementation of LARPs. The PMO will be supported by consultants on the preparation and implementation of LARPs. The MUB is committed to work closely with ADB to ensure compliance with ADB requirements on involuntary resettlement. |
| Indigenous Peoples | The indigenous peoples safeguard requirements are not triggered, as the population in the project areas does not include communities that could be treated as such under ADB's Safeguard Policy Statement. |
| Stakeholder Communication, Participation, and Consultation | |
| During Project Design | Extensive consultation has been done to obtain all required data for feasibility study through quantitative and qualitative interviews, i.e., 4,500 households for socioeconomic survey; 724 households for willingness-to-pay survey; 485 residents for land acquisition and resettlement; 323 residents for initial environmental examination; and 237 community members for focus group discussions, including school boys and girls, and project stakeholders from various municipal departments and agencies. The CAP, SDAP, and SME development plans for Tranche 3 have been prepared and aim to ensure inclusion of views from a range of interested parties in developing and reviewing respective designs, plans, and activities; and help in the resolution of complex issues, gain consensus and support from stakeholders, reduce problems in implementation, improve project design, and increase impacts. |
| During Project Implementation | The PMO with support of consultants will undertake consultations with key stakeholders as outlined in the stakeholders' communication plan. Communication with stakeholders will be managed by the PMO environmental and/or social safeguards specialist. The PMO will ensure local stakeholders are consulted, that information on the project is disseminated, and that questions and complaints are addressed quickly and effectively. The community participation component builds off the participation process initiated during the tranche 3 processing and has a focus on community-based planning. During implementation, the development of a framework with a transparent mechanism to regulate urban and land redevelopment will support continuous dialogue with the communities and will ensure the integration of the current resident into the urban redevelopment process. |
| Business Opportunities | |
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| Consulting Services | All consultants will be recruited according to 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). All procurement contracts will contain anticorruption provisions as specified by ADB. Procurement will be carried out by the PMO with support and guidance from the detailed design consultants and project implementation support consultants. |
| Responsible ADB Officer | Mamatkulov, Raushanbek |
| Responsible ADB Department | Sectors Group |
| Responsible ADB Division | Water and Urban Development Sector Office (SG-WUD) |
| Executing Agencies |
Ulaanbaatar Municipal Government |
| Timetable | |
|---|---|
| Concept Clearance | - |
| Fact Finding | - |
| MRM | 17 Apr 2020 |
| Approval | 26 Jun 2020 |
| Last Review Mission | - |
| Last PDS Update | 21 Sep 2023 |
Loan 3946-MON
| Milestones | |||||
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| Approval | Signing Date | Effectivity Date | Closing | ||
| Original | Revised | Actual | |||
| 26 Jun 2020 | 30 Dec 2020 | 15 Mar 2021 | 11 Dec 2023 | - | - |
| Financing Plan | Loan Utilization | ||||
|---|---|---|---|---|---|
| Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
| Project Cost | 76.95 | Cumulative Contract Awards | |||
| ADB | 25.05 | 25 Oct 2023 | 12.02 | 0.00 | 48% |
| Counterpart | 51.90 | Cumulative Disbursements | |||
| Cofinancing | 0.00 | 25 Oct 2023 | 2.60 | 0.00 | 10% |
| Status of Covenants | ||||||
|---|---|---|---|---|---|---|
| Category | Sector | Safeguards | Social | Financial | Economic | Others |
| Rating | - | Satisfactory | Satisfactory | Satisfactory | - | Satisfactory |
Loan 3947-MON
| Milestones | |||||
|---|---|---|---|---|---|
| Approval | Signing Date | Effectivity Date | Closing | ||
| Original | Revised | Actual | |||
| 26 Jun 2020 | 30 Dec 2020 | 15 Mar 2021 | 11 Dec 2023 | - | - |
| Financing Plan | Loan Utilization | ||||
|---|---|---|---|---|---|
| Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
| Project Cost | 18.60 | Cumulative Contract Awards | |||
| ADB | 18.60 | 25 Oct 2023 | 7.63 | 0.00 | 43% |
| Counterpart | 0.00 | Cumulative Disbursements | |||
| Cofinancing | 0.00 | 25 Oct 2023 | 5.02 | 0.00 | 28% |
| Status of Covenants | ||||||
|---|---|---|---|---|---|---|
| Category | Sector | Safeguards | Social | Financial | Economic | Others |
| Rating | - | Satisfactory | Satisfactory | Satisfactory | - | Satisfactory |
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Related Publications
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ADB to Help Redevelop Two Subcenters in Ulaanbaatar's Ger Areas
ADB has approved loans totaling $43.65 million as part of a program to support the redevelopment of two additional subcenters in the eastern and western ger areas of Ulaanbataar, Mongolia.
Tenders
| Tender Title | Type | Status | Posting Date | Deadline |
|---|---|---|---|---|
| EXTERNAL ENVIRONMENTAL MONITORING | Firm - Consulting | Closed | ||
| Institutional Development and Capacity Building for Subcenter Development | Firm - Consulting | Closed | ||
| External land acquisition and resettlement monitoring | Firm - Consulting | Closed |
Contracts Awarded
| Contract Title | Approval Number | Contract Date | Contractor | Address | Executing Agency | Total Contract Amount (US$) | Contract Amount Financed by ADB (US$) |
|---|---|---|---|---|---|---|
| DAHP: Dambadarjaa Heating Plant | Loan 3946 | 20 Oct 2023 | China Second Metallurgy Group Co. Ltd. | 83A, Yellow River Street, Rare Earth High-Tech District, Baotou, Inner Mongolia, PRC | Ulaanbaatar Municipal Government | 23,463,368.72 | 4,217,709.23 |
| Engagement of PMO staff | Loan 3947 | 09 Jul 2023 | Municipality of Ulaanbaatar | Ulaanbaatar, Mongolia | Ulaanbaatar Municipal Government | 1,594,424.61 | 1,587,433.91 |
| Land acquisition and resettlement costs | Loan 3947 | 09 Jul 2023 | Municipality of Ulaanbaatar | Ulaanbaatar, Mongolia | Ulaanbaatar Municipal Government | 2,400,000.00 | 2,400,000.00 |
| Land acquisition and resettlement costs | Loan 3946 | 09 Jul 2023 | Municipality of Ulaanbaatar | Ulaanbaatar, Mongolia | Ulaanbaatar Municipal Government | 7,800,000.00 | 7,800,000.00 |
| T3-CS01: Institutional Development and Capacity Building for Subcenter Development | Loan 3947 | 01 Feb 2023 | CRISIL Risk & Infrastructure Solutions Limited (IND) | CRISIL House, Central Avenue Road, Opp D'Mart, Hiranandani Business Park, Powai, Mumbai, Maharashtra 400 076 India | Ulaanbaatar Municipal Government | 1,610,917.00 | 1,610,917.00 |
| T3-CS03: External Environmental Monitoring | Loan 3947 | 25 Aug 2022 | Baruun Khuasai LLC | Ulaanbaatar, Mongolia | Ulaanbaatar Municipal Government | 117,184.27 | 116,554.38 |
| TBC: Training Center in Tolgoit Subcenter | Loan 3947 | 25 Aug 2022 | (JV) Mandalt Construction LLC | Ulaanbaatar, Mongolia | Ulaanbaatar Municipal Government | 1,698,841.65 | 1,689,709.98 |
| T3-CS02: External land acquisition and resettlement monitoring | Loan 3947 | 02 Aug 2021 | Urban Future Planning Consultancy LLC | Ulaanbaatar, Mongolia | Ulaanbaatar Municipal Government | 199,018.51 | 199,018.51 |
Procurement Plan
| Title | Document Type | Document Date |
|---|---|---|
| Ulaanbaatar Urban Services and Ger Areas Development Investment Program - Tranche 3: Procurement Plan | Procurement Plans | May 2023 |