Mongolia Builds a Regional Logistics Facility on People's Republic of China Border

Source: ADB. 2010. Proposed Loan and Grant—Mongolia: Regional Logistics Development Project. Report and Recommendation of the President. Manila.
Source: ADB. 2010. Proposed Loan and Grant—Mongolia: Regional Logistics
Development Project. Report and Recommendation of the President. Manila.

The Government of Mongolia, supported by the Asian Development Bank (ADB), will build a high-tech, multimodal logistics facility in Zamyn Uud on the southeast border with the People’s Republic of China (PRC). The facility will help expand and speed up trade of Mongolia, and increase its global competitiveness.

ADB will provide loan and grant assistance of $45 million equivalent for the Regional Logistics Development Project to put up this container terminal. The new terminal will have modern customs and quarantine facilities and road-and-rail access, which will reduce transit times, expand capacity, and improve staff productivity.

Advisor for Knowledge Management and Capacity Development in ADB’s East Asia Department Manmohan Parkash said, “This is the first ADB project to promote coordinated improvements in transport infrastructure and trade facilitation, including a logistics center, harmonized cross-border regulations and procedures, and modernized customs and quarantine systems.”

“Historically Mongolia has been a north–south landbridge for goods and people moving between the PRC and the Russian Federation and on to Europe. Developing a modern and efficient logistics center will reduce costs for exporters and importers and promote international and regional trade.”

In recent years, Zamyn Uud has come to serve as the gateway for Mongolia’s sharply rising trade with the PRC, handling more than 80% of imports coming from the PRC. The bulk of exports from Mongolia also pass through the same border point on the way to Tianjin port in the PRC. The growth in traffic has rapidly outstripped existing facilities, creating lengthy delays in trade and traffic movements—shipments to the capital Ulaanbaatar now require 50–60 days. The new facility will address these acute delays and facilitate faster border crossing times.

The development of the facility will also create livelihood opportunities in the service sector for poor, rural herders living in areas surrounding the center, as well as opening up prospects for public–private partnerships and private investment in other transport-related infrastructure.

Upon completion in December 2015, a private operator will be engaged to manage the facility. ADB will provide training and other support to government staff engaged in implementing and overseeing the project.

ADB’s loan of $40 million and grant of $5 million will cover about 63% of the $71.64 million project. The Government of Mongolia will provide the remaining $26.64 million. The Ministry of Road, Transportation, Construction, and Urban Development is the executing agency.

Related Links

Project Details:

News Release: ADB Funds Logistics Center to Help Mongolia Expand, Speed Up Trade