The document discusses the potential for a public-private partnership (PPP) project to develop a logistics park in Zamyn Uud, Mongolia. It analyzes the current demand and revenue potential from import/export cargo processed through the area. Over 1.5 million tons of cargo were processed in 2008, with annual growth rates over 50% in recent years. Based on 2008 transaction volumes and estimated growth rates, the logistics park could generate $32-62 million in revenues over 30 years for the PPP, depending on the discount rate and growth assumptions used.

1. Mongolia’s gateway logistics park
in Zamyn Uud: Potential PPP?
Chemonics International
Ulan Bator – Mongolia
1
July 2010

2. Agenda
1. PPP Project for Zamyn Uud logistics park
2. Potential center of revenues for PPP
3. Current demand
4. Revenue estimation for PPP
2

3. 1. PPP project for Zamyn Uud
logistics park
3

4. Zamyn Uud flow of cargo
ENTER BY ROAD
Final GOM
clearances
Weigh Mixed Manual
Scale Loads inspection Overland by road
PRC Road-Rail Overland by rail UB
transfer
Homogenous Scanner
Loads inspection
Rail-Rail transfer Final
Document Discharge Load to GOM
check from UBTZ clearance
PRCRR s
ENTER BY RAIL Preliminary
GOM clearances
4

5. 5

6. Survey in Zamyn Uud
April 16th to 19th 2008
Problem % of Complains
Waiting time for Permission Letter in Erlian 68%
Stay overnight for closure of Mongolian border 94%
Waiting time for weight in scale zone 64%
Road to scanner in bad condition 53%
Traffic jam and chaos in waiting area for inspection 55%
Traffic jam and chaos in waiting area for customs for lack of 75%
space
Lack of road or in bad condition 79%
Transshipment to the wagon is slow and number of wagons 83%
is insufficient 6

7. Beginning of Goods loaded in Erlian
transportation
Chinese border
Mongolian border
Interview point 1 Scale
Areas covered in Questionnaire 2 Areas covered in Questionnaire 3
Documentation for specialized Documentation for specialized
Specialized inspection Specialized inspection
Customs documentation Customs documentation
Physical inspection of mixed goods Scanner inspection homogeneous
cargo
Areas covered in Questionnaire 4
Provision of wagons for transshipment
End of
transportation Road to rail transshipment Interview point 4
7

8. Value of import cargo
processed in Zamyn Uud by truck
Year Value Million US$
2004 54.2
2005 72.3
2006 96.0
2007 208.0
2008 368.2
Total Accumulated 2004- 2008 798.7
8

9. Value of import cargo
Zamyn Uud by truck monthly and weekly
Value by month Value by week
Period
Million $ Million $
Average 2008 30,686,883.2 7,671,720.8
Average 9 months 2008
36,480,003.2 9,120,000.8
(excluding nov-dec-jan)
Average May-Jun-July 44,512,630.6 11,128,157.6
9

10. Cost of lack of infrastructure
Zamyn Uud weekly ($ dollars)
20% of Total weekly
5% of indirect
Period opportunity opportunity
costs
cost cost
Average 2008 1,534,344.1 383,586 1,917,930.2
Average 9 months
2008
1,824,000.1 456,000 2,280,000.2
(excluding Nov-
Dec-Jan)
Average May-Jun-
2,225,631.5 556,407 2,782,039.4
July 10

11. 2. Potential center of revenues
for PPP
11

12. Flow of revenues
Road to Rail Rail to Road Rail to Rail
Imports Exports Imports
Fee Fee
Fee
Fee Fee
Logistic Park
Warehouse Gas Station
Development Co.
Revenues from the
Business or fee
Tariff for rent m2 Revenues from the
and % of business Business or fee
Commercial Real Estate
Parking
Services Development
12

13. 3. Current demand
13

14. Current demand
14

15. Annual import tons and annual growth rate
in Zamyn Uud
Tons by Tons by
Year Total Growth rate
truck railway
2004 311,627 212,664 -
524,292
2005 362,563 222,957 11.7%
585,520
2006 416,260 228,300 10.1%
644,561
2007 698,593 293,589 53.9%
992,182
2008 1,189,794 350,744 55.3%15
1,540,539

16. Total cargo (tons) processed in Zamyn Uud by road and railway 2004-2008
2004 2005 2006 2007 2008 Average
January 23,866.153 29,277.436 30,225.754 31,966.569 87,333.419 40,533.866
February 19,207.254 22,397.425 32,065.066 29,440.064 81,379.371 36,897.836
March 36,015.163 43,184.018 43,636.150 48,330.923 165,170.691 67,267.389
April 53,873.209 62,905.096 57,763.667 78,421.236 187,587.026 88,110.047
May 57,468.028 57,914.687 62,581.153 86,671.477 189,039.761 90,735.021
June 67,266.459 62,716.385 74,825.930 104,834.253 160,690.731 94,066.751
July 47,856.327 67,932.232 69,396.434 152,588.527 169,283.233 101,411.351
August 49,986.145 64,283.940 75,185.164 130,501.745 117,651.584 87,521.716
September 55,643.238 59,210.501 67,203.198 96,206.249 129,331.700 81,518.977
October 46,706.214 46,979.934 59,773.490 97,003.042 125,471.351 75,186.806
November 33,835.384 39,840.188 39,919.603 66,490.841 68,038.323 49,624.868
December 32,568.693 28,879.147 31,986.077 69,727.999 59,561.815 44,544.746
Total 524,292.268 585,520.989 644,561.685 992,182.925 1,540,539.007
Average 43,691.022 48,793.416 53,713.474 82,681.910 128,378.251 16

17. 2008
2007
2005 2006
2004
Months 17

18. Monthly comparison total 2004-2008
18

19. 3.1 Import cargo (tons) processed
in Zamyn Uud by road/truck
Road-Rail
19

20. Annual import tons and annual growth rate
cargo by truck
Year Tons Growth rate
2004 311,627
2005 362,563 16%
2006 416,260 14.8%
2007 698,593 67.8%
2008 1,189,794 70%
20

21. 2008
2007
2006
2004 2005
21
Months

22. Monthly comparison road 2004-2008
22

23. 3.2 Import cargo (tons) processed
in Zamyn Uud by railway
Rail to Rail
23

24. Annual imports tons and annual growth rate
cargo by railway
Year Tons Growth rate
2004 212,664 -
2005 222,957 4.8%
2006 228,300 2.3%
2007 293,589 28.5%
2008 350,744 19.5%
24

25. 3.3 Import cargo (tons) processed
in Zamyn Uud
Rail to Road
Exports
25

26. Annual transshipment export cargo (tons)
Tons by
Year Tons by railway Total
truck
2004 21.195 707.259 728.454
2005 19.984 1.024.130 1.044.114
2006 23.903 1.309.758 1.333.661
2007 44.631 1.167.951 1.212.583
2008 53.663 1.977.017 2.030.680
26

27. 3.4 Import cargo (tons) processed
in Zamyn Uud
January by type of product
27

28. Type of products imports 2008
Salt; sulphur; stone and
cement.
20% Articles of stone, plaster,
cement or asbestos
3% 46% Iron and steel.
Vegetables, tubers fruits and
11% cereals
Wood and articles of wood
9%
11%
Others
28

29. 3.5 Import cargo (tons) processed
in Zamyn Uud
January – April 2009
29

30. Cargo (tons) imports processed in Zamyn Uud by
road and railway
January-April 2004-2009
2004 2005 2006 2007 2008 2009
January 23866.2 29277.4 30225.8 31966.6 87333.4 34445.4
February 19207.3 22397.4 32065.1 29440.1 81379.4 25981.1
March 36015.2 43184.0 43636.2 48330.9 165170.7 35359.2
April 53873.2 62905.1 57763.7 78421.2 187587.0 67985.0
Total 132961.8 157764.0 163690.6 188158.8 521470.5 163770.7
30

31. 5. Revenues estimation for the
PPP LPZU
31

32. 2008 Road to Rail
$ 2.11 million
Transshipment Rail to Rail
revenues $1.56 million
$3.8 million
Rail to Road
$0.13 million
32

33. First estimation of the business
logistics park Zamyn Uud Case A
PV basic PV potential PV total
Discount rate
revenues revenues revenues
30 years
$ Million $ Million $ Million
10% 61.2 1.6 62.8
12% 48.7 1.3 50.0
15% 37.0 1.0 38.0
33

34. PV of revenues
logistics park Zamyn Uud
Cases B to F
PV total PV total PV total PV total PV total
Discount revenues revenues revenues revenues revenues
rate 30 (0.5%) (1%) (1,5%) (1.8%) $ Million
years $ Million $ Million $ Million $ Million (2%)
Case B Case C Case D Case E Case F
10% 47.2 50.7 55.3 58.9 61.7
12% 39.8 42.5 45.9 48.4 50.5
15% 32.0 33.8 36.0 37.7 38.9
34

35. Comparison of revenues estimation
transshipment cargo
25000000
20000000
15000000
USD
10000000
5000000
0
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
2011-2040
35
0.50% 1% 1.50% 1.80% 2% QRVD

36. THANK YOU
36