By Ch.KHALIUN
On Wednesday, the Ulaanbaatar – Investment 2015 business forum took place under the slogan “Partnership for Development”, focusing on state and private sector partnership and development of the capital city.
The forum was jointly organized by the Ulaanbaatar Chamber of Commerce (UCC) and City Governor’s Office. State and business representatives discussed the city’s tourism center, and cooperation in making UB more safe, healthy, and green. It was attended by parliament and government members, representatives from the City Council, international organizations, and entrepreneurs.
As of today, Ulaanbaatar generates 63 percent of the nation’s GDP (13.3 billion MNT), and 1.3 million people live in the city. Estimates suggest that the population of UB will continue to grow, reaching 1.5 million by 2020, and 1.7 million by 2030.
With growth, the city’s energy consumption will increase from nearly 1.5 million kWh to 5.8 million kWh by 2030. UB serves as the main business center of Mongolia, but there are many unresolved issues such as air pollution, poor infrastructure, traffic congestion, and population centralization.
The forum participants said that by improving cooperation between the state and private sector pleasant conditions for living, doing business, and drawing investment will be created in UB. In 2013, Parliament approved a general plan for UB development through 2020, and a document for development trends through 2030. Approximately 25.4 trillion MNT is necessary for developing the city in accordance with the plan.
UB Mayor E.Bat-Uul said, “If we don’t cooperate with the private sector, we won’t be able to implement objectives of the plan through 2030. Mutual trust is vital in cooperating with investors.” During the forum, the Mayor proposed transferring urban development initiatives to the private sector.
Many forum attendees agreed that the problem with projects implemented by state and private sector partnership (SPSP) is that equality doesn’t work. The state doesn’t bear any monetary risk, while the private sector bears all the risk, including repayment of loan interest. From now on, the sides will have the same responsibilities in accordance with agreements.
An international court of arbitration will be established in UB to solve agreement disputes, and a corporation dedicated to Ulaanbaatar’s development will be created to oversee SPSPs. Representatives from the private sector will have a dominant position on the board of the corporation.
President of the UCC J.Od introduced ten principles that are necessary in implementing effective SPSPs, determined by the Urban Land Institute, an organization that provides leadership in the responsible use of land and in creating and sustaining thriving communities worldwide.
Projects that are to be implemented in UB must be definite, and companies need to make all information transparent. The sides should jointly determine their vision, understanding the interests of their partners and main participants, and correctly estimate the risk and profit. Not following these principles leads to the failure of partnerships, J.Od reminded the forum’s attendees.
Chairman of the City’s Procurement Office Yu.Idertsogt said, “We will focus on making all information about bids transparent in accordance with law, and balancing the composition of the Committee of Inquiry.” He also promised that purchasing by the city will be fair.
In order to implement Ulaanbaatar’s general plan for development 25.4 trillion MNT is necessary, but only two trillion MNT is available from the state and city budget. In the last three years, approximately 900 billion MNT was spent on development projects in UB without the private sector’s participation.
From 2013 to 2014, 23.6 billion MNT was approved for spending, and 515 projects are ready for implementation. The total cost of these projects stands at 1.6 trillion MNT, and the private sector has proposed implementing 142 projects for 946 billion MNT cost.
In 2015, 37 projects will be undertaken by the private sector, 30 of which have been announced through a selection process and are starting preparations for project implementation.
Head of Invest Mongolia Agency L.Narantuya introduced major projects that need the private sector’s participation, calling for investment.
General Director of the UCC O.Amartuvshin introduced the initiatives of the UCC. The UCC worked on the Khan City 2025 project, proposing to make Ulaanbaatar a vital city center in Asia.
Mayor E.Bat-Uul said that projects to be implemented with the private sector’s participation can be introduced to international financial organizations like Asian Development Bank (ADB) and European Bank for Reconstruction and Development for consideration for funding.
Permanent Representative of the ADB Robert Schoellhammer pointed out that the location of UB is strategic in Eastern Asia and should be considered an advantage in business. He pointed out that developed countries focus on partnership to draw investments for major projects.
After the plenary session, Mayor E.Bat-Uul and J.Od signed a declaration of city and private partnership for development.
The forum was jointly organized by the Ulaanbaatar Chamber of Commerce (UCC) and City Governor’s Office. State and business representatives discussed the city’s tourism center, and cooperation in making UB more safe, healthy, and green. It was attended by parliament and government members, representatives from the City Council, international organizations, and entrepreneurs.
As of today, Ulaanbaatar generates 63 percent of the nation’s GDP (13.3 billion MNT), and 1.3 million people live in the city. Estimates suggest that the population of UB will continue to grow, reaching 1.5 million by 2020, and 1.7 million by 2030.
With growth, the city’s energy consumption will increase from nearly 1.5 million kWh to 5.8 million kWh by 2030. UB serves as the main business center of Mongolia, but there are many unresolved issues such as air pollution, poor infrastructure, traffic congestion, and population centralization.
The forum participants said that by improving cooperation between the state and private sector pleasant conditions for living, doing business, and drawing investment will be created in UB. In 2013, Parliament approved a general plan for UB development through 2020, and a document for development trends through 2030. Approximately 25.4 trillion MNT is necessary for developing the city in accordance with the plan.
UB Mayor E.Bat-Uul said, “If we don’t cooperate with the private sector, we won’t be able to implement objectives of the plan through 2030. Mutual trust is vital in cooperating with investors.” During the forum, the Mayor proposed transferring urban development initiatives to the private sector.
Many forum attendees agreed that the problem with projects implemented by state and private sector partnership (SPSP) is that equality doesn’t work. The state doesn’t bear any monetary risk, while the private sector bears all the risk, including repayment of loan interest. From now on, the sides will have the same responsibilities in accordance with agreements.
An international court of arbitration will be established in UB to solve agreement disputes, and a corporation dedicated to Ulaanbaatar’s development will be created to oversee SPSPs. Representatives from the private sector will have a dominant position on the board of the corporation.
President of the UCC J.Od introduced ten principles that are necessary in implementing effective SPSPs, determined by the Urban Land Institute, an organization that provides leadership in the responsible use of land and in creating and sustaining thriving communities worldwide.
Projects that are to be implemented in UB must be definite, and companies need to make all information transparent. The sides should jointly determine their vision, understanding the interests of their partners and main participants, and correctly estimate the risk and profit. Not following these principles leads to the failure of partnerships, J.Od reminded the forum’s attendees.
Chairman of the City’s Procurement Office Yu.Idertsogt said, “We will focus on making all information about bids transparent in accordance with law, and balancing the composition of the Committee of Inquiry.” He also promised that purchasing by the city will be fair.
In order to implement Ulaanbaatar’s general plan for development 25.4 trillion MNT is necessary, but only two trillion MNT is available from the state and city budget. In the last three years, approximately 900 billion MNT was spent on development projects in UB without the private sector’s participation.
From 2013 to 2014, 23.6 billion MNT was approved for spending, and 515 projects are ready for implementation. The total cost of these projects stands at 1.6 trillion MNT, and the private sector has proposed implementing 142 projects for 946 billion MNT cost.
In 2015, 37 projects will be undertaken by the private sector, 30 of which have been announced through a selection process and are starting preparations for project implementation.
Head of Invest Mongolia Agency L.Narantuya introduced major projects that need the private sector’s participation, calling for investment.
General Director of the UCC O.Amartuvshin introduced the initiatives of the UCC. The UCC worked on the Khan City 2025 project, proposing to make Ulaanbaatar a vital city center in Asia.
Mayor E.Bat-Uul said that projects to be implemented with the private sector’s participation can be introduced to international financial organizations like Asian Development Bank (ADB) and European Bank for Reconstruction and Development for consideration for funding.
Permanent Representative of the ADB Robert Schoellhammer pointed out that the location of UB is strategic in Eastern Asia and should be considered an advantage in business. He pointed out that developed countries focus on partnership to draw investments for major projects.
After the plenary session, Mayor E.Bat-Uul and J.Od signed a declaration of city and private partnership for development.
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