20 years of proposed development solutions and still no results

Trans. by B.DULGUUN

Many things can be done in 20 years, yet Mongolia still hasn’t created solutions for development plans that were first initiated 20 years ago. Will these development plans continue to wait for resolution or can they move forward from the discussion stage?

Hydroelectric power plants
Mongolia has constantly faced shortages of electricity. Currently, 11 small-sized and two medium-scale hydroelectric power plants operate in Mongolia, but their actual production is very poor. After looking for ways to resolve electricity shortage problems and poor production, Mongolia decided it would build a hydroelectric power plant on the Eg River in Khuvsgul and Bulgan provinces, but the project has only been discussed for 24 years. Mongolia continues to import energy from Russia and China annually for 30 million USD.
The total cost of electricity imported from Russia from 1977 to now equals 311 million USD (451 billion MNT). Had this large sum of currency been circulated domestically, who knows what Mongolia could have accomplished in that time. In addition, the price of energy supplied by Russia increases every year. This year, the price rose to 195 MNT per kW, and Mongolia will face a deficit of 13 billion MNT next year to cover the cost. It’s clear that the price of energy will continue to rise, so the government should hurry up in the construction of hydroelectric power plants as well as the other 11 power plants being discussed.
The planned hydroelectric power plant on Eg River has the projected capacity to generate 606 million kWh of electricity annually, and will result in the creation of a 5.7 billion cubic meter freshwater pool. The feasibility study for the project has been completed and the plant will cost an estimated 827 million USD. Former MP D.Odkhuu is the current project manager and has reported that the river is undergoing water and fish population surveys, as well as archaeological studies.
Presumably, Mongolia’s central energy system will see great improvement and the national energy supply will become much smoother once the power plant becomes operational. Most importantly, experts estimate that the hydroelectric plant will enable Mongolia to reduce its energy dependency on imports by developing its own energy sources. Mongolia can benefit considerably if only the project can progress.

Free trade zones
Exactly 20 years ago, in 1995, the parliament approved the establishment of economic free trade zones under Resolution No.87. Later, the law on economic zones for the Altanbulag Free Trade Zone was approved in 2002, and laws for the Zamiin-Uud Free Trade Zone and Tsagaannuur Free Trade Zone were approved in 2003. If work had progressed efficiently, as predicted at the time, Mongolia would’ve established free trade zones at the north and south borders and they would be circulating millions of USD. However, the only free trade zone now open is the Altanbulag Free Trade Zone.
As of November 2014, over 130 foreign and domestic businesses have established investment agreements and own land in the Altanbulag Free Trade Zone. So far, only 21 of these businesses have started doing business there. According to a resolution of the previous government issued in June, the Altanbulag Free Trade Zone should have officially transferred to a permanent system by now.
The primary work planned for the Altanbulag Free Trade Zone is the construction of a 25 km railway from Sukhbaatar soum, the center of Selenge Province, to the free trade zone. Building this railway would be very beneficial for Mongolia, as products from Manchuria could be transported through the Altanbulag Free Trade Zone and all the way to the Dubna Special Economic Zone in Moscow.
According to local news, the railway was going to receive investment from Poland’s Tines Capital Group. Administrators of the free trade zone have highlighted that they hope to establish a concessional agreement with the investors by the end of 2015.
Other countries have already established free trade and economic zones and are gaining more and more profit. Some countries that transferred to a market economy system from a socialist society around the same time as Mongolia are among the countries actively operating free trade zones. Currently, Romania, Turkey, Ukraine, Belarus, Costa Rica, Moldova, Ecuador, and Latvia are operating free trade zones. Rent per square meter in Pakistan and Turkey’s free trade zones cost 2 USD, and in the United Arab Emirates, one square meter costs 7.6 USD. Rent per square meter in China’s free trade zone has reached 25 USD. Rent in the Altanbulag Free Trade Zone costs 0.20 to 0.27 USD per square meter. Despite this cheap price, foreigners are not interested in renting space there.

Mongolia built a 1,110 km railway some 60 years ago. Since then, the railway hasn’t been expanded at all, if we don’t include short railway extensions constructed and paid for by mining companies. Constructing a railway isn’t a major project that can’t be completed in 20 years. Even so, Mongolian decision makers keep arguing over small matters, such as the material for the railway, its width and gauge size, and so on.
Mongolian railway companies developed the New Railway Project, but so far, locals have yet to see a new railway track.
Besides these incomplete projects, there are many more projects that need to be pulled out of the discussion stage and made into actual work. These include the unresolved Tavan Tolgoi and Fifth Power Station projects.

Source: http://economy.news.mn/content/207776.shtml

Short URL: http://ubpost.mongolnews.mn/?p=13923

Posted by on Mar 26 2015. Filed under Opinion. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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