14.12.2023 Author: Boris Kushhov

Ulaanbaatar is still waiting for its subway – a story showing the problems with relying on Western partners

Ulaanbaatar is still waiting for its subway

Certain treasured wishes and memories inevitably visit us again and again, and such recurrent visions can be a painful experience. Such is certainly the case for almost one in two of Mongolia’s people, who are left waiting as the country once again raises the question of building a subway in the city of Ulaanbaatar.

The megacity, which has almost tripled in size since the beginning of the 21st century, now houses almost half of the country’s population, accounts for an even greater share of its GDP (65%), and attracts the lion’s share of its revenues (up to 80%). As a result, it inevitably suffers from a number of problems, including some that are fairly typical for rapidly-growing Asian cities, and others which are unique to Mongolia, such as the “yurt neighborhoods,” in which the residents burn whatever combustible materials they can find in order to heat their homes. However, this article will focus on a more common problem for developing countries, namely, traffic jams and an underdeveloped transportation infrastructure – a problem which has put the task of building at least one subway line back on the agenda.

The first studies on the perspective of the construction of a subway in Ulaanbaatar date back to 2007. And then in 2011 the city administration conducted talks on the construction of a subway system with the CSR Corporation, one of the largest Chinese transportation and infrastructure construction corporations.

In 2013-2014 provisional approval was granted for another project, a light metro-monorail, to be implemented with the support of the Japan International Cooperation Association and using a $ 600 million dollar soft loan from the Japanese government. However, due to cuts in the Japanese government’s budget for overseas projects, the Japanese partners were forced to abandon this ambitious project. The “foundation stone” of this abortive project, naming the would-be sponsors and contractors and mockingly displaying a now irrelevant completion date, still stands in one of the city’s central districts, in the midst of gridlocked traffic and the constant noise of vehicles, reminding the city’s residents of their cherished but now distant dream. Round about the same time, there was an announcement that certain South Korean companies planned to construct a subway by 2017, but nothing more was heard of this mooted project.

In 2018, there were reports of plans to construct a subway in the capital by 2030 – now at a cost of $1.5 billion, most of which was, as before, expected to come from foreign partners. Two options, a 17-kilometer subway line and an above ground high-speed streetcar line were considered. But no foreign “well-wishers” stepped up with no offers to finance the project. And the proposed subway, which could potentially reduce congestion on the city’s highways by up to 22 percent, was not mentioned in any form in the Mongolian government’s 2020-2024 Action Program, which has a section on measures to address traffic congestion. Neither did the 2019 “Ulaanbaatar City Vision 2040” mention any plans to construct a subway system in the city. In 2020, France granted Mongolia a subsidized loan (with an interest rate of 0.007% per annum) for several tens of millions of euros for the creation of a cable car line, which is scheduled to be launched in 2024. While this project will certainly meet a real need (as many districts the city are located in the higher ground that surrounds the city center), it is not on a sufficiently large scale to solve the traffic congestion in itself.

In 2021, the issue of constructing a subway, this time a hybrid system, was raised again. The cost of this project has been estimated at $3 billion, with an implementation period of eight years. But again, the project was abandoned due to its excessive cost.

Meanwhile, Mongolia’s capital continues to expand rapidly, without any consideration for any failed plans or proposals: in 2018 many were shocked by the prediction that its population would increase to 1.7 million by 2030, but in fact it passed this figure in 2023, and by 2040 it could reach the 2.2 million mark. The traffic situation continues to deteriorate – in 2021, 85% of residents surveyed named it as the city’s worst problem and the average speed on its roads fell from 34 kilometers an hour in 2010 to 13 kilometers an hour in 2023. If that trend continues, traffic will grind to a standstill by 2040. The average resident of the capital spends more than a month a year in traffic jams, costing the country up to 10% of its GDP (about 2.2 billion dollars a year). The efforts made by the city administration to develop above-ground public transport has not had any impact on the alarming trends.

And now there has been a new twist in this long saga, although it is too early to say whether this is a good or bad thing. On November 23, 2023, B. Delgersaikhan, appointed only a month ago as a minister and as Chair of the National Committee on the Reduction of Traffic Congestion in Ulaanbaatar (check the importance of this issue for Mongolia!) joined the city’s new Mayor, H. Nyambaatar in announcing that proposals to construct a subway system would be included in the city’s general development plan for 2024-2027. Naturally, just like the previous proposals, this project is to be implemented with the help from foreign experts and lenders, and senior officials have announced an open international tender for a feasibility study for the “construction project of the century.” Preliminary proposals will be put before Mongolia’s parliament before the end of this year.

However, it should be noted that, every newly appointed Mayor of Ulaanbaatar traditionally returns to the subway project. Therefore, it is too early to describe the latest announcement as a breakthrough.

Over the last decade and a half those hoping to build a subway system in Mongolia have tried, and failed, to attract investors from Japan, South Korea, Europe and America. Naturally, foreign investors are able to organize the digging of hundreds of kilometers of tunnel in Mongolia, but they are only willing to do this if they consider the project to be profitable enough. Thus, the Anglo-Australian mining giant Rio Tinto dug over 200 km of deep tunnels in the Oyuu Tolgoi copper deposit – a project in which Mongolian investors provided just 33% of the costs. But Western investors are not sufficiently motivated, and lack the energy to take on an unprofitable project to construct 10 or 15 kilometers of tunnels for the benefit of their Mongolian partners. After all it is one thing to make a profit out of a “small developing country somewhere in the middle of Asia,” but it is quite another to support it.

Another project to relieve traffic in Ulaanbatuur, proposed about the same time as those discussed above, was a potential joint Russian-Mongolian venture. This proposal was for a rapid light urban rail system based on Ulaanbatuur’s existing railway line, which crosses the city from east to west. Using standard suburban trains would be much cheaper than building new track above ground, let alone constructing underground infrastructure. Nevertheless, although this project was launched in 2014, albeit on a much more limited scale than originally intended, authorization for its further development was never granted. If revived, this initiative could well one day form the basis for Ulaanbaatar’s subway system – but the future of this dream is still very unclear.


Boris Kushkhov, the Department for Korea and Mongolia at the Institute of Oriental Studies of the Russian Academy of Sciences, exclusively for the online magazine “New Eastern Outlook”.

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