Korean builders eye Mongolian rail

A consortium of 19 Korean construction companies is likely to win a 1,000 kilometer railroad construction project in Mongolia worth $3 billion.

According to Lotte Engineering & Construction, the consortium, along with Korea Rail Network Authority, submitted its preliminary business plan as a part of its bid to the Mongolian representatives a week ago.

This followed an agreement by the Korean government to cooperate on the railroad project at the request of the Mongolian government in 2009.

“Countries such as China and Russia have shown interest in the Mongolian railroad project, but as a result of long cooperation, Mongolia has raised its expectations of our technology and governmental support,” said Lim Young-sik, team leader at Korea Rail Network Authority. “The Mongolian government wishes to start the project as soon as possible.”

Construction of the railroad will take place between Taban Tolgoi and Zuunbayan, and Sainshand and Choybalsan, which stretches over 1,040 kilometers.Building is expected to last five years as the Korean consortium will be responsible for the first stage of the planned 5,500 kilometer railway.

Mongolian government officials are expected to visit Korea to sign a memorandum of understanding with the consortium this month.

The railroad construction is related to the exploitation of Mongolia’s abundant coal reserves.

Although the country has plenty of natural resources such as bituminous coal, copper, zinc, and molybdenum, it lacked infrastructure to extract and ship the raw materials.

“The Korean consortium has received a positive response from the Mongolian side on our business plans to connect the Taban Tolgoi mine with the railroad,” said Do Eun-dae, vice president of Lotte E&C.

Taban Tolgoi is estimated to have coal reserves of 6.4 billion tons, making it one of the biggest coal mines in the world.

By Park Il-han, Jung Seung-hyun [seungjung@joongang.co.kr]




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