But the Ukhaa Khudag to Gashuun suhait railway became problematic. Energy Resource Company which is planning to construct the railroad has now become the one to blame. Officials say putting this railroad would result to too dependent from China and may even raise national security concerns. Energy Resource says “Why would a domestic company putting a railroad to Gashuun suhait be a violation to national security when placing a railroad to Zamiin-Uud is not?” It thinks they are being blamed deliberately.
In June 2008, Government made a protocol signed by PM S.Bayar, Minister for Infrastructure R.Rash to permit Energy Resource Company build a railroad. The National Security Council also discussed the issue because the mine had strategic significance. President of the time N.Enkhbayar opposed this and the matter was postponed for a while.
The issue revealed itself again on 3rd of October this year and Minister for Road, Transportation, Construction and City Development Kh.Battulga decided it needs to be discussed by the National Security Council. But the Security Council did not make a final decision.
Railroad to Gashuun suhait would be 240 kilometers long and freight cost may be less expensive. Dalanzadgad-Sainshand would be 554 kilometers long, but would be possible to connect with Russia and Chinese railways. Furthermore, Industry Park would be established to manufacture final products as well as creating jobs. Energy Resource also says railroad to Gashuun suhait will open the doors to foreign markets. But there are risks related to outflow of Mongolian money to China.
The company on the other hand stated that it also supports the Dalanzadgad-Sainshand and proposed to construct both. Gashuun suhait railway construction already started. But there are those who suspect the officials for giving the rights to construct railroad to Energy Resource without announcing tenders. Maybe it was because the officials are paying the debt to the company for taking away its license to use Tavantolgoi mine.
What will happen next? If the Parliament supports the Gashuun suhait’s project agrees to build both railways, the Sainshand project may not have its desired support. If not approved, the Energy Resourse would have to stop the work which it started. Energy Resource is paying the expense itself while Sainshand is planning to take financial assistance from abroad. It may be settled by the market law since the law says private investments are welcome.
It would be good if both projects are approved and both railways are constructed.
Since Energy Resource is a business company, it will try to build the railroad less costly as possible. This also raises suspicion of quality. Since the railroad of Dalanzadgad-Sainshand would be much shorter, other mines would try to transport their products through it. This may case financial damage to Sainshand road.
The officials are now in charge of making the main decision.
