Mongolia and Russia have signed an intergovernmental agreement on terms for rail freight transit transportation, Interfax reports.
The agreement was signed on Friday by Mongolian Minister of Road and Transport Development Jadamba Bat-Erdene, and Russian transport minister Yevgeny Dietrich, the Mongolian government press office said in a statement.
Under the deal, the two countries will cooperate to implement a flexible tariff policy on freight transit through the territory of two countries, improve the quality of railroad infrastructure and increase freight flow constantly.
The agreement will create new opportunities for businesses in landlocked Mongolia to export their products overseas without any hindrance, the statement said.
Under the framework of the agreement, the Mongolian side will enjoy tariff discounts on the transit transport of its export goods through Russia for 25 years. It took nearly 10 years to sign the agreement, which will take effect after the completion of the necessary legal procedures in each country.
Earlier this month, it was reported that Mongolia has asked for a $1.58 billion loan from Russia for the development of the country’s railways.
The company managing the Mongolian railway system was established in 1949 on the basis of an agreement between the governments of the former USSR and Mongolia with an equal distribution of shares in the authorized capital. Ulaan Baatar Railways is now trying to build all the necessary infrastructure needed for the country to become part of the Russia-Mongolia-China economic corridor.
