Narrative
Full Description
Project narrative
On June 1, 2010, China Eximbank and the Government of Mongolia signed a subsidiary preferential buyer’s credit (PBC) agreement for the Railway Rolling Stock Expansion and Renovation Project. The PBC was approved under a $300 million general loan agreement (line of credit) for various projects that was signed by the two governments on June 1, 2010. The borrowing terms of the PBC were as follows: a 1.75% interest rate and a 20-year maturity. The precise face value of the PBC is unknown. However, the borrower was authorized to use the proceeds of the PBC to finance up to 85% of the combined cost of two commercial contracts. Therefore, AidData assumes that the face value of the PBC was equivalent to 85% of $64,289,659 ($54,646,210). The proceeds of the PBC were to be used by the borrower to finance 85% of the cost of two commercial contracts: a $35,692,200 procurement contract between the Ministry of Road, Transportation, Construction and Urban Development of Mongolia (MRTCUD) and China CNR Corporation Limited that was signed on December 23, 2009 and a $28,597,459 procurement contract between MRTCUD and China CNR Corporation Limited and CSR Corporation Limited (formerly known as China South Locomotive & Rolling Stock Corp., Ltd.) that was signed on December 29, 2010. Under the December 23, 2009 procurement contract, China CNR Corporation Limited delivered 5 rolling stock locomotives, 245 freight cars, 1 replacement locomotive and 2 container loaders. Under the December 29, 2010 procurement contract, China CNR Corporation Limited and CSR Corporation Limited delivered two filling machines DC 32IV-15208, one ballast cleaning machine QS2-650-1520, two ballast adjusting machines SPZ-350-152, 57 hopper wagons KZ75-1520 and one locomotive GCY220-1520. This project was completed in 2012. However, its precise implementation start and end dates are unknown. According to a government audit, the rolling stock equipment was successfully delivered but it has not been utilized (due to the Government of Mongolia’s lack of infrastructure, storage facilities, and warehouses) as of 2014.
Staff comments
1. This project is also known as the Increasing the Railway Rolling Stock Project. The Mongolian project title is “Төмөр замын хөдлөх бүрэлдэхүүний паркийг нэмэгдүүлэх” төслийн. 2. The precise face value of the PBC is unknown. However, the borrower was authorized to use the proceeds of the PBC to finance up to 85% of the combined cost of two commercial contracts. Therefore, AidData assumes that the face value of the PBC was equivalent to 85% of $64,289,659 ($54,646,210). 3. The China Eximbank PBC that supported this project is not included in the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020. 4. One source suggests that the value of the December 23, 2009 commercial contract was $39,350,000.00 rather than $35,692,200. This issue requires further investigation. 5. One source suggests that two separate China Eximbank loans may have been issued to finance the December 23, 2009 commercial contract and the December 29, 2010 commercial contract. These contracts may correspond to two projects that are refereed to as ‘Төмөр замын хөдлөх бүрэлдэхүүн хэсгийн зогсоолыг өргөтгөх’ төсөл and ‘Төмөр замын хөдлөх бүрэлдэхүүн нийлүүлэх’ төсөл in Mongolian. If a second loan agreement was signed, there is some evidence that the loan signature date may have been June 13, 2011.