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D.Sumiyabazar: Digital transformation in public transport will be implemented in cooperation with domestic companies

During the cabinet meeting on May 18, Prime Minister L.Oyun-Erdene instructed to implement the renovation of the capital city's public transport fleet in two stages in 2022-2024. Mayor of Ulaanbaatar and Governor of the Capital City D.Sumiyabazar presented the progress of the renovation of public transportation in Ulaanbaatar city.

975 buses being operated for public transportation in Ulaanbaatar are due to be removed from the service by the end of 2022. It is planned to renovate 60 percent of the public transportation fleet or 591 buses will be added this year and raise it to 86 percent in 2024 and a total of 975 buses will be added with international financial support through a public-private partnership.

Initially, 110 electric buses, 410 diesel buses, 40 trolleybuses and 30 medium-sized buses are scheduled to be imported.

During the introduction of the renovation of public transportation in Ulaanbaatar city, Mayor of Ulaanbaatar D.Sumiyabazar answered questions from journalists.

-How public transport renovation will be financed?

-The renovation of the capital city's public transport fleet will be financed from domestic and foreign sources. Specifically, the funding sources will be made available by the China Development Bank, the Export-Import Bank and the domestic banks of Mongolia.

-What projects are currently being implemented to reduce traffic congestion?

- We plan to add 591 buses to public transportation by August 20 with the state budget and private sector, international partnerships, as well as foreign and domestic sources. The public transportation fleet has not been renovated since 2009. A work has begun to install RFID sensing devices on 169 traffic lights. It is scheduled to be completed by August 20.

-LRT is necessary in Ulaanbaatar. If the city's congestion issue is not be tackled quickly, it will rapidly reach acute level of gridlock in 2024. Some measures on reducing traffic congestion in Ikh and Baga Toiruu will be taken such as the transition from monocentric to polycentric city, and the connection of sub-centers by ring road.

- The IMF has reportedly suspended the construction of the LRT. Is it true?

-No. this is a misinformation. The topic on issuing a guarantee of USD 510 million was discussed by the cabinet. Ulaanbaatar has full potential to build LRT with concession and other postpaid financial terms. Therefore, Ulaanbaatar has to be its own budget governor in order to resolve the issues.

The Feasibility Study estimates that the total cost of the 18.1 km road, including land acquisition and contingencies, will be USD 926 million. The actual cost is USD 960 million. LRT project is a key solution to reduce congestion. The other key solution is a construction of ring roads.

-How will 591 buses be financed by the state and private sector?

-Since 2015, with the introduction of Ulaanbaatar smart cards, subsidies of public transport of MNT 53 billion increased to about MNT 180 billion. The introduction of smart cards has increased public transport subsidies by 130 billion. Therefore, smart cards will be removed from public transport in the city. Digital transition to public transportation will be implemented in cooperation with domestic companies.

-According to the Law on the Legal Status of Ulaanbaatar city, a legal environment has been created for the city to issue bonds. Would you please elaborate on this?

- It is mandatory to consult with the Ministry of Finance to issue bonds, securities, implement concessions, and operate the capital city development fund.

Ulaanbaatar’s assessment is to be conducted in July and be completed by September. After conducting the assessment, the bond issue will be discussed with the Ministry of Finance and presented to the Government.


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