The Mongolian rail network comprises approximately 1,900 km of broad gauge/1520mm/ track, of which 1,110 km are on the main line linking Russia to China. This line is built by Soviet construction unit "505" between 1948-1955 and has been owned by the Ulaanbaatar Railways, a Russian and Mongolian joint venture, since 1949.
According to the State Policy on Railway Transportation, ratified by the Parliament in 2010, landlocked Mongolia has to construct 5,600 km of railway in 3 phases in an effort to extend the unified railway network, utilize large mines, and export commodities from those mines. But in order to make this a reality, more than US$5 billion of investment will be needed. This will be a huge challenge, in a country with a GDP of around US$9 billion, in 2012. Besides, policymakers face another challenge to provide a reasonable balance between the interests of private investors and the Government. In spite of that private railways may also be developed more quickly and operated more efficiently than they were operated by government, the Mongolian authority remains reluctant to give permission for two mining companies to construct theirs own private railways into China. In order to minimize a transportation costs, both railways will be built using Chinese narrow gauge, which is provoking fierce debates not only in Mongolia also within those Central Asian states, like Kyrgyzstan and Kazakhstan, where are operating wide gauge railways. There are some risks associated with the development of these private railways. For example, private mining companies have been unwilling to allow competitors to have access to those railways at reasonable prices.
While Russian control over the Mongolia's railway sector is likely to intensify, other neighbor - China is under way to become key partner of Mongolia in the railway sector, as nearest market, as major investor and key transit country. In other words, China’s role and influence in the field of railway and sea access for Mongolia, is growing year by year. Gauge and route debates among Mongols reflect their ambivalent attitudes to two neighbours, emphasizing economic benefits on one hand, but security concerns on the other.
Recently Mongolian Government to consolidate the first and second stage railway base infrastructure construction projects into a unified railway project to be managed and implemented under government authority and financing with the participation of domestic and foreign investors.
D. Shurkhuu, PhD (IIS, Mongolia)