www.mrt.gov.mn 1Asian Highway Investment Forum, Bangkok

8 October, 2013

MINISTRY OF ROADS AND TRANSPORTATION, MONGOLIA

GOVERNMENT POLICY FOR DEVELOPING MONGOLIAN ROAD

SECTOR

B.GalbadrakhDirector General, Strategic Policy and

Planning Department

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COUNTRY FROFILELocation: Northern Asia between Russia and PRC (Landlocked)

Area: 1,566,000 sq km (610,740 sq mi)

Land boundaries: 8,158 km, with Russia 3,485 km and with China 4,673 km

Terrain: Vast semi-desert and desert plains, mountains in west and southwest, Gobi Desert in southeast

Sea access: Tianjin/China (1,344 km) and Nakhodka/Russia (4,037 km)

Population: 2.9 million

GDP: 6.125 billion USD (nominal) Real GDP growth rate: 17.2% in 2011

15.0% in 2012.

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Road classification under Sub-clause 11 of “Law of Road” (1998.01.02):1.International road2.State roads3.Local roads4.Domestic roads of Organization and Factory

Specific roads

ROAD NETWORK CLASSIFICATION AND CURRENT STATUS OF DEVELOPMENT OF MONGOLIA

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TOTALState roads 12 722 km

CURRENT STATUS OF DEVELOPMENT OF STATE ROAD NETWORK

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INVESTMENT PLAN FOR EACH YEAR

STRATEGIC PLAN OF DEVELOPING ROAD NETWORK

Government activity of Mongolia

NATIONAL DEVELOPMENT GOALS BASED ON MILLENIUM DEVELOPMENT PLAN

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NEW DEVELOPMENT MID-TERM TARGET PLAN

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Year 2010

Year 2013

Year 2016

Year 2012

Year 2016

Year 2020

In 2013 50%, in 2016 80% of total road construction works will be supervised under arbitral companies.

ROAD NETWORK DEVELOPING GOAL

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INVESTMENT SOURCES FOR ROAD SECTOR

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ROAD CONSTRUCTION WORKS OF LAST 4 YEARS

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AH32Millenium RoadAH4/CAREC 4(a)

AH3/CAREC 4(b)Main Vertical Road 2Main Vertical Road 3

Main Vertical Road 4Main Vertical Road 5Road Network

Baruun-Urt

Altai

Arvaikheer

Bulgan

Murun

Erdenet Darkhan

UlaanbaatarUlaanbaatar

Sainshand

Mandalgovi

Dalanzadgad

Undurkhaan

Ulaanbaishint

Artssuuri Baga-Ilenhi

Khanh

AltanbulagEreentsav

Ulikhan

Khavirga

Bichigt

Zamiin uud

Yarantai

Dayan

Gashuun sukhait

Bayankhongor

Burgastai

Tsetserleg

Zelter

Choir

Zuunmod

UliastaiKhovd

Ulgii

Choibalsan

UlaangomSukhbaatar

Khandgait

FUTURE MONGOLIAN ROAD NETWORK/PROPOSED SECTION TO INVESTORS

AH4

AH3

AH32

Proposed road project

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THE PROPOSED IMPROVEMENT PROJECT OF KHOVD-ULIASTAI SECTION (473 KM) GENERAL : • Connects Khovd, the capital of Khovd aimag (Province), the far western region of Mongolia;Uliastai, the capital of Zavkhan aimag (Province);

• This route is designated as both a section of Asian Highway (AH32) and the Millennium Road;

• The section includes 39 km of paved road, 26 km is under construction and the remaining 408 km is improved track roads;

• The average roughness (IRI) on this section is 6.4 m/km and the current driving time is 12-14 hours.

THE INVESTMENT PROPOSAL:• The improvement of two-lane paved road between Uliastai and Khovd including construction of necessary bridges and cross-drainage structures. The total length of the project road is about 447 km with an estimated cost of about USD 170 million.

• Given the length of proposed investment it would be likely completed two phases with civil works being proposed to begin in 2015 and will be completed by approximately 2017 if found to be economically viable as well as having the funding available.

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BENEFITS:

• The completion of this project will lead to (i) reduced migration of the rural population to cities; (ii) enhanced livelihoods for local residents; (iii) increased and improved international, regional and local connectivity both for passengers and goods transport; (iv) improved infrastructure links and network for tourism industry.

WE WOULD LIKE TO PROPOSE ABOVE FINANCING OPPORTUNITIES FOR YOUR CONSIDERATION AND FINANCING.

THE PROPOSED IMPROVEMENT PROJECT OF KHOVD-ULIASTAI SECTION (473 KM)

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THANK YOU