OREANDA-NEWS. March 22, 2010. An Ulan Bator Railway general shareholders’ meeting was held today in Ulan Bator. During the meeting, changes were made to the company’s management, and Russian Railways Vice President Vadim Morozov was unanimously elected CEO of Ulan Bator Railway.

Vadim Morozov said his main goal as the head of Ulan Bator Railway is "to transform the railway into a highly efficient transport system working on market principles, and to form and establish a long-term strategy for its development, with clear sources of financing."

"To achieve this goal, the first priority is to swiftly conclude inter-governmental procedures for increasing the authorized capital of Ulan Bator Railway to \\$250 million, by signing a corresponding intergovernmental agreement. Also, a broad range of specific practical steps need to be taken jointly with the Mongolian parliament to resolve the issues of setting economically appropriate tariffs for domestic, export and transit train services, the reimbursement of fuel excises levied on Ulan Bator Railway by the Mongolian government, and the regulation of exchange rate difference for Japanese intergovernmental credit. Resolving these issues will enable us to rectify the financial state of Ulan Bator Railway, ensure its profitable work, and in the very near future allow us to start far-reaching measures for its modernization, with the introduction of modern standards, equipment, and technology, and a modern management structure, and also to raise the carrying capacity of the railway to a level that will support the country’s economic growth", Vadim Morozov said.
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Ulan Bator Railway was founded in 1949 on the basis of an agreement between the Soviet and Mongolian governments, giving them equal shares in the company’s authorized capital. Ulan Bator Railway plays a key role in Mongolia’s transport system. The railway accounts for more than 60% of the country’s freight transport. Ulan Bator Railway has 1815 km of track, and employs around 16,000 people.

The common technical base with Russia’s rail network, including the 1520-mm track gauge, supports the important geostrategic role of Ulan Bator Railway in providing transport and economic links with China. However, the current technical state of Ulan Bator Railway’s main assets (70% of rolling stock and 50% of track superstructure are in a poor state of repair) has a negative impact on the carrying and throughput capacity of the rail system, and prevents the potential transport volume from being reached, including for freight transit.

In view of the important role played by Ulan Bator Railway in trade and economic relations between Russia and Mongolia, its geopolitical significance in organizing freight transit to China and other Asia-Pacific nations, as well as the repeated requests from Mongolia for technical assistance, an agreement was signed in February 2008 on broadening cooperation between Russian Railways and Ulan Bator Railway.

The "Plan for implementing a joint Russian-Mongolian project to develop Ulan Bator Railway and build new railway infrastructure in Mongolia" developed by Russian Railways specialists will enable the efficiency of Mongolian railway transport to be improved both for domestic services, and for transit through the country.

In August 2009, Russian President Dmitry Medvedev signed a decree "On the transfer of government-owned shares in Ulan Bator Railway to the beneficial ownership of RZD", under which the 50% stake in Ulan Bator Railway owned by the Russian Federation was transferred to the beneficial ownership of Russian Railways for a period of five years.