TT Issues under discussion

Parliament supported ‘in principle’ the draft parliamentary resolution, tender documents and draft investment agreement regarding Tavan Tolgoi coal deposit, submitted by the government, and decided to discuss them.
Parliament is planning to approve the matter during the spring session;
however, the process of discussion is not so speedy. Government submitted the documents to Parliament on May 27 and Parliament made a decision on June 7 to discuss the matter. In the past week, only Parliament’s working group held a meeting.
At its first meeting, the working group which consists of five members from MPRP Group in Parliament and four members from DP Group agreed to hear suggestions and recommendations from MPs, experts, specialists and government and non-government organizations. The working group members plan to go on site and get au fait with Tavan Tolgoi and Ukhaa Khudag coal mines.
D. Damba-Ochir, MP and head of the working group said, “The working group has a very busy schedule and intends to complete combined suggestions and recommendations by July 1. For an investment agreement for Tavan Tolgoi deposit, government must introduce the draft agreement to Parliament and receive a permit. After selecting an investor by tender and holding negotiations with the investor, the draft investment agreement may be submitted this autumn.”
“First of all, a proposal to bring Tavan Tolgoi deposit into economic circulation was based on an ideology to become a developed country with creative people. Also, it includes intensively developing the mining sector’s supplementary industry and infrastructure sector, equally allocating economic profits to 2.7 million citizens in the form of a share, and giving citizens an opportunity to use the share for their needs in health services, education and apartment purchases. Our important goal is to develop value-added production and retain profits in Mongolia. Processing coal of the Tavan Tolgoi deposit is an inseparable part of this project. It will be implemented as real outcome,” stated Prime Minister S. Batbold in his speech introducing the government’s position at the Parliament session. Government worked out a taxation and financial policy in that direction and some bills on amending tax laws with the concept of supporting valueadded production. The Prime Minister said that when a policy is prioritized to develop domestic industries, Mongolia aspires to export the processed coal and outputs of Tavan Tolgoi deposit to markets of neighboring countries and third countries through as many directions and exits as possible.
Besides, a discussion of the issue of a railway, a main condition to implement this policy, is sluggish in Parliament. A meeting of the working group which was scheduled to discuss state policy on railway transport was delayed 6 times due to lack of turnout;
at last it convened on June 15 and then the Economic Standing Committee discussed the issue. Some proposals offered by the working group caused disputes among members and could not get support from the majority. In a draft State policy on railway transport, it states to construct the basic structure for a 5,500km railroad and realize this work in three stages.
In the first stage, a 1770km railroad will be constructed in route to Tavan Tolgoi-Zuunbayan and Sainshand- Baruun Urt-Choibalsan. In the second stage, a 312.5 km railroad will be constructed in route to Tavan Tolgoi- Gashuunsukhait and Nariinsukhait- Shiveekhuren. In other words, although private sectors were given permission to construct a railroad linking to China before; Government prefers the construction of railroad to Sainshand Industrial Park first. However, the working group offered a proposal to combine two stages. R. Rash, head of the working group explained that the working group’s proposal included resolving the issue of linking Tavan Tolgoi with the current railway line with investors to speed up construction of basic railway structure. He added that the working group considers it is necessary to start railroad construction in Dalanzadgad- Tavan Tolgoi-Zuunbayan and Sainshand-Baruun Urt-Choibalsan in 2010. Road, Transport, Construction and Urban Development Minister Kh. Battulga categorically denied it. “The proposal of the working group fails government policy. If we combine the stages, it will be possible to start constructing a 5,500km railroad from wherever at the same time. They must not plan to construct more railroads at the same time with the one in Dalanzadgad-Tavan Tolgoi to be started within 2010. Also the working group proposed that the railroad gauge be chosen based on the Feasibility Study. But the FS for a railroad running to the southern border was already done and it is short tracks with length of 47km and 270km. In this case, there will not be possibility to establish an Industrial Park in Sainshand and have a sea exit.”
DP member Z. Enkhbold said that the DP Group in Parliament backed the draft resolution. Therefore, in case the working group’s proposal is backed, the DP group needs to take a break. But when a voting was conducted, the number of members with opposite opinion was equal. It led to remain statements of the draft submitted by government unchanged.At the plenary meeting of Parliament, proposals of the working group will be re-discussed.
source: The Mongol Messenger No. 234(989)
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