Incredible but true.
Bloomberg report — Feb 22, 2016 Mongolia is seeking a $1.3 billion loan from the Export-Import Bank of China to complete a railway connecting its Tavan Tolgoi coal deposit with the Chinese border, a project that has stalled because of lack of funds.
To read the entire article, go to bloom.bg/1mU7yDE
Officials from Mongolian Railway SOSC are meeting in China for talks with the bank to secure the loan, Idesh Ivshin, the company’s head of projects, said Monday in an interview in Ulaanbaatar.
The 240-kilometer (150-mile) railway will increase export volumes and lower the cost of transporting coal to Mongolia’s biggest customer at a time when weak prices are tightening margins. Coal is Mongolia’s nation’s second-largest export earner, accounting for $556 million last year. The Ministry of Finance may also offer a government guarantee, said Manduul Nyamdeleg, Head of Financial Markets and Insurance Division.
These are practically the same terms that many consultants, including myself, have been suggesting to Mongolia for about a decade.
The proposal would need to be ratified by the Mongolian cabinet. That ratification is not a sure thing.
He believes that the railway could be completed by 2018 if work begins AGAIN this year.
According to terms under discussion, the Export-Import Bank would appoint a Chinese contractor to construct the railway, Idesh said. That would replace the existing agreement with South Korea’s Samsung C&T, which has stalled over a debt of more than $30 million that the railway says it can’t pay due to lack of funds. The two sides are negotiating a settlement, according to Idesh.
THE ACTUAL FACTS ARE MORE LIKELY THAT the Mongolian government either can’t or refuses to pay the giant KOREAN Samsung company for work on parts of the under obstruction already “expensed” Gobi project.
An official at the Export-Import Bank of China’s press office in Beijing told Bloomberg reporters that he couldn’t immediately comment.