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  • Closed Compact Report:  Closed Compact Report: Mongolia Compact
  • October 2015

North-South Road Project

  • $79,750,000Amount at Project Inception
  • $74,775,867Total Disbursed

Estimated Benefits

Estimated Benefits for the North-South Road Project
Time Estimated Economic Rate of Return (ERR) over 20 years Estimated beneficiaries over 20 years Estimated net benefits over 20 years
At compact closure 9.4 percent 161,000 $273,000,000

Estimated benefits corresponds to $74.77 million of project funds, where cost-benefit analysis was conducted.

Project Description

The North-South Road Project sought to mitigate Mongolia’s inadequate transport infrastructure in a key segment of a critical economic corridor by constructing an all-weather road and connecting Mongolian markets to key trading partners.

Infrastructure is critical for the future development of Mongolia due to the country’s small population and large geographic land area. Mongolia has vast mineral resources but lacked adequate and reliable road transport infrastructure. Nearly half of Mongolia’s population is concentrated in Ulaanbaatar, and approximately 60 percent are located along the crucial economic road and rail corridor between Russia and China. A portion of this link, the Choir-Sainshand Road, was unpaved, forcing drivers to make frequent detours to avoid its potholes and deep trenches. The quality of the road, and the driving style required to navigate it, negatively impacted neighboring pastureland.

MCC funded the design of 19 additional kilometers to allow for construction on the entirety of the 176-kilometer road. Following approval of the project in 2009, significant increases in the cost of works for the North-South road led to a decision to re-allocate compact funds from the Bayanzurkh Bridge and the Ulaanbaatar-Nalaikh road to finance work on the Choir-Sainshand segment. These two investments of the project were dropped entirely.

Additional funds were made available after the Rail Project was withdrawn from the compact.

Evaluation Findings

MCC is planning an evaluation of the North-South Road Project that will measure road maintenance, annual traffic, and vehicle operating costs. The evaluation design will be posted in 2018, with the final report expected by 2020.

Key performance indicators and outputs at compact end date

Key performance indicators and outputs at compact end date
Activity/Outcome Key Performance Indicator Baseline End of Compact Target Quarter 1 through Quarter 20 Actuals (as of Dec 2013) Percent Compact Target Satisfied (as of Dec 2013)
All Activities Kilometers of roads completed 0 176.4 176.4 100%
Kilometers of roads under design 0 20 19.3 97%
Percent disbursed of road construction contracts 0 100 90.9 91%