Mongolia Transport Connectivity and Logistics improvement project

active

The proposed project will help Mongolia to establish the backbone of an integrated livestock supply chain infrastructure and institutional capacity. The project will make optimal use of World Bank support by ensuring that interventions are highly selective, as recommended in the InfraSAP study. By introducing and implementing an evidence-based approach to asset management, the project will lay the foundation for nationwide asset preservation. It will also take a major step toward addressing Mongolia’s logistical challengesby tackling the shortfalls in physical connectivity and information asymmetry in logistics and supply chains. It will also deploy technical assistance and capacity building to make transport services and logistics more efficient over the long haul, and undertake a trial of climate resilient road designs in permafrost locations.Priority 1: Remove road bottlenecks and improve maintenanceConnectivity between the selected eight Aimags which are critical for the meat value chain and last-mile connectivity between herding communities and the core transport network will be supported. Out of 15,172 km of roads, the 2,300km of national roads will be the priority. Most of this priority network, constructed since 2010 with funding from several international development partners, such as the ADB and Japanese International Cooperation Agency, alongside the Government of Mongolia, has deteriorated and needs rehabilitation or upgrading. These significant investments are critical for connectivity between herders and markets. A key priority is to develop and preserve existing national roads that are the backbone for the physical connectivity of the meat supply chain, supported by appropriate frameworks for asset management. This is critical to preserve the asset value of roads that have recently been upgraded, thereby avoiding the vicious cycle of build-neglect-rebuild as well as premature failures. Such an asset management approach would help to manage the strategic network on a “life-cycle cost-planning” basis and to implement evidence-based maintenance planning and investment decisions. Improvement of last-mile connectivity to herders is an important and complementary priority.Priority 2: Plan for infrastructure and logistics services to unlock potential of meat supply chainTo achieve maximum potential from the livestock sector, ongoing initiatives aimed at improving its productivity must be supplemented with well-organized warehousing and transportation services. Studies and masterplanning for meat supply chain logistics are key to facilitating investment in logistics, cold storage and processing requirements for the further development of Mongolia’s meat supply chain .Priority 3: Address information asymmetry and administrative barriers by delivering timely information to the right partiesCOVID-19 has accentuated the need for digitalization in many sectors of the economy, including logistics. Information technology solutions to provide herders better market awareness can improve market efficiency and reducer herders costs. Assessment of regulatory frameworks and training are vital to developing national capacity to respond to requirements for meat exports. In addition to the technological interventions, the project will also seek to develop guidelines and regulations to spur the growth of contract logistics services and enhance the role of existing players.Embedded within the activities will be an explicit mandate to respond to the impacts of climate change. The existing transport network is highly vulnerable to adverse climate events triggered by heavy rainfall, severe winters, and floods. The unit costs for new construction are relatively high and have been increasing due to climate change. The Ministry of Road and Transport Development (MRTD) has started to prepare strategies/design guidelines for cost optimization and integrating climate resilience into the road sector. The strategies/guidelines aim to avoid premature failures and improve the design life of road infrastructure; make the best use of existing roads and bridges; promote the use of local materials; and adopt climate-smart solutions, including improved drainage and road surfacing, and innovative and climate-resilient bridge designs. The project will reinforce these initiatives. Construction of a three-kilometer trial section of road using innovative road designs for permafrost environments will enable critical data collection for development of updated testing and road designs standards.