Sudalgaa

JAPAN INTERNATIONAL COOPERATION AGENCY MINISTRY OF ROADS, TRANSPORTATION, CONSTRUCTION AND URBAN DEVELOPMENT ULAANBAATAR CITY GOVERNMENT
THE STUDY ON CITY MASTER PLAN AND URBAN DEVELOPMENT PROGRAM OF ULAANBAATAR CITY (UBMPS)
Final Report
Volume 1: Summary
March 2009
Tugrug (Tg.) 1 = 0.081 Yen US$ 1 = 95.37 Yen US$ 1 = 1,177 Tg. (exchange rate of December 2008)
PREFACE
In response to a request from the Government of Mongolia, the Government of Japan decided to conduct a study on The Study on City Master Plan and Urban Development Program of Ulaanbaatar City in Mongolia International Cooperation Agency(JICA). and entrusted to the study to the Japan
JICA selected and dispatched a study team headed by Dr. Shizuo IWATA of ALMEC Corporation and consist of ALMEC Corporation, Oriental Consultants Co., Ltd. and Aero Asahi Corporation between February, 2007 and March, 2009.
The team held discussions with the officials concerned of the Government of Mongolia, and conducted field surveys at the study area. Upon returning to Japan, the team conducted further studies and prepared this final report.
I hope that this report will contribute to the promotion of this project and to the enhancement of friendly relationship between our two countries.
Finally, I wish to express my sincere appreciation to the officials concerned of the Government of Mongolia for their close cooperation extended to the study.
March 2009
Eiji HASHIMOTO, Deputy Vice President Japan International Cooperation Agency
March 2009
Eiji HASHIMOTO Deputy Vice President Japan International Cooperation Agency Tokyo
Subject: Letter of Transmittal Dear Sir,
We are pleased to formally submit herewith the final report of the Study on City Master Plan and Urban Development Program of Ulaanbaatar City. This report compiles he results of the study which was undertaken both in Mongolia and Japan from February 2007 to March 2009 by the Team comprising ALMEC Corporation, Oriental Consultants Co., Ltd., and Aero Asahi Corporation. We owe a lot to many people for the accomplishment of this report. First, we would like to express our sincere appreciation and deep gratitude to all those who extended their extensive assistance and cooperation to the Team, in particular Ministry of Roads, Transportation, Construction and Urban Development in Mongolia and Ulaanbaatar City Government. We also acknowledge the officials of your agency, and the Embassy of Japan in Mongolia for their support and valuable advice in the course of the Study. We hope the report would contribute to the sustainable development of Ulaanbaatar City.
Very truly yours,
IWATA Shizuo Team Leader Study on City Master Plan and Urban Development Program of Ulaanbaatar City (UBMPS)
UB Central Area
District Location Map
Satellite City
Satellite City Location Map
ii Map of Ulaanbaatar City
Administrative Boundary
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iv
Location of Ger Areas
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The Study on City Master Plan and Urban Development Program of Ulaanbaatar City (UBMPS) Final Report Volume 1: Summary Table of Contents
INTRODUCTION 1.1 1.2 1.3 1.4 Background .................................................................................. 1 Objectives .................................................................................... 2 Overall Schedule of the Study ........................................................ 2 Structure of the Report .................................................................. 3
VISION AND OBJECTIVES 2.1 2.2 Urban Development Visions ........................................................... 4 Planning Objectives ....................................................................... 5
SOCIAL AND ECONOMIC PERFORMANCE& DEVELOPMENT FRAMEWORK 3.1 3.2 3.3 3.4 Socio-economic Conditions in Mongolia and Ulaanbaatar .................. 7 Long-term Prospects of Socio-economic Development of Mongolia .. 15 Socio-economic Framework 2020 and 2030 for Ulaanbaatar City ..... 17 Potential Industries to Lead Ulaanbaatars Economic Growth........... 21
REGIONAL DEVELOPMENT STRUCTURE 4.1 4.2 4.3 Existing Regional Framework ....................................................... 24 Conceptual Scheme of the UB Metropolitan Area ........................... 25 Economic Functions of Remote Districts ........................................ 26
LAND USE AND ZONING 5.1 5.2 5.3 5.4 Proposed Land Use Concepts ....................................................... 28 Proposed Institutional Framework for Land use Management .......... 29 Overall Land Evaluation ............................................................... 31 Enacted and Proposed Zoning Systems ......................................... 34
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5.5 5.6 6
Proposed Zoning System for Ulaanbaatar City................................ 38 Development of a Compact City ................................................... 41
URBAN TRANSPORTATION SYSTEM 6.1 6.2 6.3 6.4 6.5 Worsening Traffic Conditions ........................................................ 49 Prospects on Traffic Congestion.................................................... 54 Urban Transportation Network Development ................................. 56 Traffic Management and Safety .................................................... 67 Comprehensive Urban Transportation Development ....................... 71
HOUSING POLICY 7.1 Housing Development Issues ....................................................... 76 7.2 History of Government Housing Development Strategies and Programs. 76 7.3 Current Housing Policies and Institutions ...................................... 79 7.4 Proposed Housing Policies and Institutions .................................... 80 7.5 Housing Demand Forecast ........................................................... 88 7.6 Affordable Housing Model ............................................................ 94 LIVING CONDITION IMPROVEMENT 8.1 Planning Issues, Visions and Strategies ......................................... 97 8.2 Planning Methodologies for Living Condition Improvement ............. 99 8.3 Proposed Community-driven Implementation Mechanism ............. 103 8.4 Proposed Detailed Plans of Model Ger Areas in Unur and Dambadarjaa.... 109 URBAN UTILITIES & ENVIRONMENT 9.1 Common Issues on Urban Utilities .............................................. 111 9.2 Water Supply ............................................................................ 112 9.3 Sewerage ................................................................................. 115 9.4 Power Supply............................................................................ 117 9.5 Heating System ........................................................................ 119 9.6 Solid Waste Management........................................................... 121 9.7 Air Pollution Control .................................................................. 122 9.8 Disaster Management ................................................................ 124 DEVELOPMENT FINANCING MECHANISM 10.1 Weak Capacities of Development Funds and Municipal Financing .. 127 10.2 Strengthening of Municipal Financing Capacity ............................ 129
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11
IMPROVEMENT OF INSTITUTIONAL AND LEGAL FRAMEWORK 11.1 Planning Issues......................................................................... 137 11.2 Enhancement of the Urban Development Law ............................. 138 11.3 Legal System to Realize Housing Policies ..................................... 139 11.4 Legalization of Development-Related Laws .................................. 140 11.5 New Legal Framework for Urban Planning Projects ...................... 141 CITY DEVELOPMENT PROGRAM 12.1 General .................................................................................... 142 12.2 Overall Program until 2030 (Long List) ........................................ 142 12.3 Priority Projects (Short List) and Profiles ..................................... 166 12.4 Financial Affordability Assessment .............................................. 177 ACTIONS FOR IMPLEMENTATION OF THE MASTER PLAN 13.1 General .................................................................................... 178 13.2 Institutionalization Process for Revision and Approval of the New Master Plan ................ 179 13.3 Organizational Restructuring for Urban Planning Administration .... 179 STEP FORWARD
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12
13
14
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List of Figures
Figure 1.1 Figure 2.1 Figure 3.1 Figure 3.2 Figure 3.3 Figure 3.4 Figure 3.5 Figure 3.6 Figure 3.7 Figure 3.8 Figure 3.9 Figure 3.10 Figure 3.11 Figure 4.1 Figure 4.2 Figure 5.1 Figure 5.2 Figure 5.3 Figure 5.4 Figure 5.5 Figure 5.6 Figure 5.7 Figure 5.8 Figure 5.9 Figure 5.10 Figure 5.11 Figure 5.12 Figure 5.13 Figure 5.14 Figure 6.1 Figure 6.2 Figure 6.3 Figure 6.4 Figure 6.5 Figure 6.6 Figure 6.7 Figure 6.8 Figure 6.9 Figure 6.10 Figure 6.11 Figure 6.12 Figure 6.13 Figure 7.1 Figure 7.2 Figure 7.3 Figure 7.4 Figure 7.5 Figure 7.6 Figure 7.7 Figure 7.8 Overall Schedule of the Study .............................................................................. 2 UB Vision 2020 and Refined UB Vision 2030 ...................................................... 6 Changes in the Population of Mongolia and Ulaanbaatar City ............................ 8 Distribution of Population by Age Groups in 2000................................................ 9 In-migration and Out-migration Patterns .............................................................. 9 Population Changes in Ulaanbaatar City by District .......................................... 10 Changes in Economic Activities and Per-capita Products.................................. 11 Contribution of Industries to GDP Growth .......................................................... 11 Distribution of GRDP by Industry ....................................................................... 12 Number of Business Enterprises by Industry ..................................................... 13 Economic Projections for Mongolia and UB City................................................ 18 Population Growth of Ulaanbaatar City .............................................................. 20 Necessary Government Support for Leading Industries .................................... 23 Conceptual Scheme of the Ulaanbaatar Metropolitan Area ............................... 25 Proposed Development Structure for Ulaanbaatar Metropolitan Area ............... 27 Basic Strategy for Land Use & Urban Expansion in Ulaanbaatar City ............... 29 Overall Structure of Planning System and City Master Plan .............................. 30 Legal Framework for Land-use Management .................................................... 31 GIS-based System for Evaluating Land Development Suitability ...................... 32 Land Development Suitability based on Natural Conditions (UB Metropolitan Area) ................................. 33 Development Potential of Ulaanbaatar City based on Adequate Land Utilization (Ulaanbaatar City) .............. 35 Proposed Zoning System for Ulaanbaatar City .................................................. 40 From Urban Sprawl to a Compact City ............................................................... 42 Comparison of Population between Trend and Compact City Scenarios .......... 43 Comparison of Population Density between Trend and Compact City Scenarios ..... 44 Population Distribution under a Compact City Concept by 2030 ....................... 44 Concept of a Compact Ulaanbaatar City ............................................................ 46 Image of Underground Malls at Railway Stations .............................................. 47 Proposed Green Network in Ulaanbaatar City ................................................... 48 Travel Demand by Purpose ................................................................................ 49 Travel Demand by Mode .................................................................................... 49 Hourly Distribution of Travel Demand................................................................. 51 Assumed Daily Traffic Congestion on Existing Road Network in 2007 (Full Link Capacity) ...................................................................... 53 Assumed Daily Traffic Congestion on Existing Road Network in 2007 (80% of Link Capacity)................................................................. 53 Traffic Congestion by 2030 under a Do-nothing Scenario ................................. 54 Concept of the Future Transportation Network .................................................. 60 Proposed Road Types ........................................................................................ 60 Preliminary Mass Transit Location Plan ............................................................. 64 Preliminary Estimate of Line 1 Ridership and Most Efficient Operation............. 64 Road Network in Ulaanbaatar City by Number of Lanes ................................... 66 Existing Signalized Intersections ........................................................................ 68 Proposed Urban Transportation Network Development Plan for 2030 .............. 72 History of Housing Policies, Strategies, and Programs in Mongolia .................. 77 Physical Development Plan Proposed by UB City ............................................. 78 Current Housing Policy Framework in Mongolia ................................................ 79 Social Housing Corporation Model ..................................................................... 82 Interest/Down Payment Subsidy Model ............................................................. 84 Proposed Housing Policy Framework ................................................................ 87 Analytical Flow of Housing Demand Forecasts for 2020 and 2030 ................... 89 Forecast of Housing Stocks by Type in 2020 & 2030......................................... 92 x
Figure 7.9 Figure 7.10 Figure 7.11 Figure 7.12 Figure 7.13 Figure 8.1 Figure 8.2 Figure 8.3 Figure 8.4 Figure 8.5 Figure 8.6 Figure 8.7 Figure 8.8 Figure 8.9 Figure 8.10 Figure 8.11 Figure 8.12 Figure 8.13 Figure 9.1 Figure 9.2 Figure 9.3 Figure 9.4 Figure 9.5 Figure 9.6 Figure 9.7 Figure 9.8 Figure 10.1 Figure 10.2 Figure 10.3 Figure 10.4 Figure 10.5 Figure 10.6 Figure 10.7 Figure 11.1 Figure 12.1 Figure 12.2 Figure 12.3 Figure 13.1 Figure 13.2
Change in Housing Unit by Type ........................................................................ 92 Anticipated Housing Gap between Demand and Supply ................................... 93 Apartment Unit Sales Prices in 2007 (US$/m2) .................................................. 94 Household Income Distribution Pattern in Ulaanbaatar City in 2007 ................. 94 Affordable Housing Models for Average Households in Ulaanbaatar City ......... 95 Important Aspects of Basic Urban Services in Ger Area .................................... 97 Basic Strategy for Ger Area Improvement.......................................................... 99 Development Orientations of Residential Areas in UB City.............................. 100 Basic Concepts of Living Conditions Standards ............................................... 101 Image of a Neighborhood Residential Unit ...................................................... 102 Images of Future Housing Types ..................................................................... 103 Planning Process and Stakeholders of the NADEP ......................................... 104 Planning Process of NADEP and Project Implementation for Ger Area Development ............... 105 Basic Concepts and Approaches of Land Readjustment ................................. 107 Processes of Land Adjustment and Land Pooling............................................ 107 Weighting and Rating System for Land and Asset Valuation ........................... 108 Proposed Concept Plan for Dambadarjaa ....................................................... 109 Proposed Concept Plan for Unur ..................................................................... 110 Concept of Cluster System............................................................................... 111 Overall Coverage of Infrastructure and Utilities ............................................... 112 Demand-Supply Balance in Water Supply ....................................................... 114 Concept of a Collective Industrial Wastewater Treatment System .................. 117 Electric Power Demand-Supply Gap ................................................................ 119 Demand-Supply Gaps in Heating for Residential Use ..................................... 120 Citizens Opinion on Most Important Public Service ...................................... 122 Integrated Measures to Combat Air Pollution................................................... 123 Composition of Tax Revenue between the Central and Local Governments of Various Countries .............................. 128 Strategic Framework for Financing Public Services ......................................... 129 Matching of Cost Payments and Benefits with Public Services ...................... 131 Operation and Maintenance Financing Strategies ........................................... 132 Capital Financing Strategy 1 ............................................................................ 133 Proposed Community-based Financing System .............................................. 134 Summary of Proposed Strategies for Financing Capacity Enhancement ........ 136 Legal Integration of Three Urban Planning Laws ............................................. 137 Overall Framework for Formulating Development Programs ........................... 143 Inter-linkages between Development Visions and Issues ................................ 144 Mutual Relations among Development Programs............................................ 144 Enhancement of Urban Planning Administration in Ulaanbaatar City .............. 180 Organizational Framework with External Affiliated Entities .............................. 181
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List of Tables
Table 3.1 Table 3.2 Table 3.3 Table 3.4 Table 3.5 Table 3.6 Table 3.7 Table 3.8 Table 3.9 Table 3.10 Table 3.11 Table 4.1 Table 5.1 Table 5.2 Table 5.3 Table 5.4 Table 5.5 Table 6.1 Table 6.2 Table 6.3 Table 6.4 Table 6.5 Table 6.6 Table 6.7 Table 6.8 Table 7.1 Table 7.2 Table 7.3 Table 7.4 Table 7.5 Table 7.6 Table 7.7 Table 7.8 Table 7.9 Table 8.1 Table 8.2 Table 9.1 Table 9.2 Table 9.3 Table 9.4 Table 9.5 Table 9.6 Table 10.1 Table 10.2 Table 10.3 Table 11.1 Table 12.1 Table 12.2 Table 12.3 Table 12.4 Table 12.5 Table 12.6 Changes in the Population of Mongolia and Ulaanbaatar since 1998 ................. 8 Major Export and Import Items ........................................................................... 14 Foreign Direct Investment by Industry................................................................ 14 Foreign Direct Investment by Country ................................................................ 15 Target Average Growth Rates in MDG-based NDS and IMF Report 2006 ........ 15 Population Scenarios Prepared by NSO-UNFPA ............................................... 16 Average Annual Growth Rates in UBMP-2020 and MP 2015 ............................ 17 Assumed Growth Rates of Mongolias GDP and Ulaanbaatars GRDP ............ 18 Existing Population Forecasts for Ulaanbaatar City ........................................... 19 New Population Forecasts for Ulaanbaatar City until 2030................................ 19 Household Characteristics in Ulaanbaatar City from 2007 to 2030 ................... 20 Development Directions for Three Remote Districts in Ulaanbaatar City .......... 26 Development Suitability Scores of Land Types .................................................. 32 Proposed Model for a Zoning System ................................................................ 37 Proposed Special Policy-based Zoning System................................................. 38 Designated Areas in the Draft Zoning Map ........................................................ 39 Comparison of Urbanization between Trend and Compact City Scenarios ....... 43 Transportation Demand by Mode and Purpose ................................................. 49 Accessibility of Urban Transportation in Ulaanbaatar City ................................. 51 Impact Analysis of Urban Growth on Transportation by Scenario ...................... 55 Basic Strategies for Urban Transportation Development ................................... 58 Bus Performance Indicators in Ulaanbaatar City, 2007 ..................................... 61 Road Length by Classification ............................................................................ 65 Comparison of Travel Speeds in 1998 and 2007 ............................................... 67 Traffic Impact Analysis ........................................................................................ 73 Planning Profiles for the Physical Development Plan Proposed by UB City ..... 78 Percentage of Imported and Homemade Construction Materials ...................... 81 Expected Roles of Proposed Organizations for Housing Development............. 83 Roles and Functions of Proposed Housing Financing Organizations ................ 86 Current Structure of Housing Stocks by Type in 2007........................................ 88 Peoples Preference to Move, Rebuild or Improve Current Houses .................. 90 Desired Housing Pattern for Rebuilding and New Construction upto 2030 ....... 90 Housing Units to be Rebuilt and Constructed by Housing Type ........................ 91 Projections of Housing Stocks by Housing Type in 2020 and 2030 ................... 91 Proposed Policy Targets and Standards .......................................................... 101 Contents of the NADEP .................................................................................... 104 Assumed Per-capita Water Consumption Volume ........................................... 113 Projection of Wastewater Volume to be Treated .............................................. 116 Projection of Future Demand for Electric Power .............................................. 118 Current Supply Capacities of Electric Power Plants (June 2008) .................... 118 Projection of Residential Heating Demand from 2007 ..................................... 120 Projections on Solid Waste Generation for 2010, 2020 and 2030 ................... 122 Government Budgetary Structure ..................................................................... 127 Municipal Revenue Sources of Ulaanbaatar City (2006 and 2007) ................. 128 Sectoral Financing Framework for Infrastructure Development and O&M ...... 135 Legal Framework to be Studied for Land and Housing Development.............. 141 Summary of Project Investment Costs ............................................................. 147 Program Categories and Project Codes .......................................................... 148 Proposed Ulaanbaatar City Development Program for UBMPS 2020 and 2030.. 149 Concept of Priority Subsectors for Planning Issues ......................................... 168 Priority Scoring Evaluation for Proposed Projects ........................................... 170 Summary of the Priority Programs/Projects ..................................................... 175
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Abbreviations
ADB AH ATC BCR BPO BRT CBD CBO CCTV CDM CF CODI CO2 ECOSAN FA FAR FDI FIDP FIRR Gcal GDP GIS GRDP GOM GTZ HDF HDFI HIS HRD ICT IMF JICA kWh LLC LP LR MC MCUD MDF MDG MECS MET MFALI MFE MHFC MIK MME MNE MNT MOF MOSA MRT MRTCUD Asian Development Bank Asian Highway Area Traffic Control Building Coverage Ratio Business Process Outsourcing Bus Rapid Transit Central Business District Community Based Organization Closed-circuit Television Clean Development Mechanism Community Finance Community Organizations Development Institute Carbon Dioxide Ecological Sanitation System Financial Assistance Floor Area Ratio Foreign Direct Investment Fiscal Investment& Loans Program Financial Internal Rate of Return Giga calorie Gross Domestic Product Geographic Information System Gross Regional Domestic Product Government of Mongolia Deutsche Gesellschaft fur Technische Zusammenarbeit (German Technical Cooperation) Housing Development Fund Housing Development Financing Institute Household Interview Survey Human Resource Development Information Communication Technology International Monetary Fund Japan International Cooperation Agency Kilowatt hour Limited Liability Company Land Pooling Land Readjustment Mortgage Corporation Ministry of Construction and Urban Development Mongolian Development Fund Millennium Development Goal Ministry of Education, Culture and Science Ministry of Environment and Tourism Ministry of Food, Agriculture and Light Industry Ministry of Fuel and Energy (then) Mongolian Housing Finance Corporation Mongolian Mortgage Corporation Ministry of Minerals and Energy Ministry of Nature and Environment (then) Mongolian National Tugrug / Tg. Ministry of Finance Mongolia Software Industry Association Mass Rapid Transit Ministry of Road, Transport, Construction and Urban Development xiii
MRTT MW NADEP NDS NGO NHA NOx NSO-UNFPA ODA OECD O&M PCU PFI PPP R&D SFC SWM TA TPS UB UB-METS UBIFC UBMP-2020 UBMPS UCA UK UN-HABITAT UPA UPRDI USA USAID USUG UTS VOC WWTP WWWMP
Ministry of Road, Transport and Tourism (then) Megawatt Neighborhood Area Development Plan National Development Strategy Non-Governmental Organization National Housing Authority (in Thailand) Nitrogen Oxide National Statistical Office and United Nations Population Fund Official Development Assistance Organization for Economic Co-operation and Development Operation & Maintenance Passenger Car Unit Private Finance Initiative Public Private Partnership Research and Development Social Housing Corporation Solid Waste Management Master Plan Technical Assistance Thermal Power Station Ulaanbaatar Ulaanbaatar Metro-Transit System Ulaanbaatar Infrastructure Financing Corporation Exiting Ulaanbaatar Master Plan targeting the year 2020 Study on City Master Plan and Urban Development Program of Ulaanbaatar City in Mongolia Urban Control Area United Kingdom United Nations Human Settlements Program Urban Promotion Area Urban Planning, Research and Design Institute United States of America United States Agency for International Development Ulaanbaatar Water and Sewerage Authority Ulaanbaatar Transit System Volatile Organic Compounds Wastewater Treatment Plant Water & Wastewater Master Plan
xiv
2nd Steering Committee (October 2007)
1st Donor Meeting (October 2007)
Learning Session (July 2007)
Workshop on Infrastructure, Ger area improvement and Environment (June 2008)
Model Project on Ger Area Improvement Residential Meeting in Unur (June 2008)
Model Project on Ger Area Improvement Residential Meeting in Dambadarjaa (Feb. 2009)
Final Seminar (February 2008) xv
4th Steering Committee (February 2009)
xvi
This Summary Report compiles only essences of outcomes of the Final Report with a purpose to facilitate constructive discussions among all officials and stakeholders concerned. Viewing the target years 2020 and 2030, basic concepts on structuring Ulaanbaatar City are comprehensively presented in this report, covering key planning issues. Further technical aspects may be referred to Volume 2: Main Text and Volume 4: Technical Appendices.
The Study on City Master Plan and Urban Development of Ulaanbaatar City (UBMPS) FINAL REPORT Vol.1 Summary
1. INTRODUCTION
1.1
Background
Mongolia has been witnessing a rapid reform toward market economy and this has brought a huge change in the structure of the Ulaanbaatar Capital Region since the collapse of the socialist regime in 1992. For one, the population of Ulaanbaatar City has grown rapidly. In 1935 it was around 10,000; in 1944 after World War II it reached about 30,000; and in 1998 it was 650,000. At present the population has grown to more than 1 million at an average growth rate of more than 4.0% p.a. during the period between 2000 and 2007. The Master Plan for Ulaanbaatar City was officially launched in 2001 with the target year 2020 (often referred to as UBMP-2020 in this Report). The Master Plan is well organized and adopts international planning methodologies. It also provides a clear insight into the causes and effects of rapid urbanization in Ulaanbaatar City toward the year 2020 and offers appropriate vision on physical urban development based on a rational projection of rapid motorization and on environmental measures to reserve watershed and water resources. However, overall urban growth management and land-use control remain to be issues that need further study. Various donors and nongovernmental organizations (NGOs) have cooperated with Ulaanbaatar in terms of individual infrastructure and housing programs and projects including Ger area improvement. However, it seems that the Ulaanbaatar City government, as well as the ministries concerned, has not made the best use of these assets, know-how, and experiences gained from these projects/programs to carry out their daily administrative services. Although the coordination of donor contributions is inherently a task of the Mongolian side, a common insight into urban planning issues should be shared among donor organizations. Under such circumstances, the Mongolian government requested the Japanese government to conduct The Study on City Master Plan and Urban Development Program of Ulaanbaatar City. In response to its request, the Japan International Cooperation Agency (JICA) selected a consultant team, led by ALMEC Corporation under JICAs procurement regulations. The consultant team, or JICA Study Team, headed by Dr. Shizuo Iwata, was dispatched to Mongolia to commence the study in March 2007.
1.2
Objectives
The objectives of the study, which were mentioned in the Scope of Work agreed upon by both governments, are threefold, as follows: To revise the current master plan (i.e., UBMP-2020) for the target years of 2020 and 2030 to include measures against expanding Ger areas in response to rapid socio-economic changes; To prepare action plans and make recommendations to agencies in implementing the revised master plan; and To transfer technology to improve the capacity for city planning of implementing agencies.
1.3
Overall Schedule of the Study

This Final Report compiles the outcomes of the study which the JICA Study Team carried out from March 2007 to February 2009. The Study Team completed: (1) Analysis of urbanization trend and urban problems; (2) Assessment of existing conditions; (3) Evaluation of administrative capacity; (4) Planning concepts addressed in the revised plan; (5) Draft proposals for a master plan toward 2030; and (6) Development program containing the recommended projects. Figure 1.1 shows the overall schedule of the study.
Figure 1.1
Year Month
Mapping 1/5,000 Handed-over Handed-over to MCUD to MCUD Revision of Master Plan
Overall Schedule of the Study

2008 6 7 2009 2 3
2007 .. 12
10
11
12
Progress Progress Report Report
Interim Interim Report Report
Draft Draft Report Report
Final Final Report Report
Model Area Projects
Field Field Surveys Surveys
Preparatory Preparatory Work Work
Draft Action Draft Action Plan/Program Plan/Program
Final Plan Final Plan
Source: JICA Study Team
At the beginning of the Study, the Household Interview Survey was conducted. A total of 4,500 households and their members were interviewed to determine their socio-economic characteristics and opinions on existing urban services, such as access to urban services, transport conditions, and others, as well as future development orientations. The results of analysis were utilized to identify current situation, problems and issues, as well as to develop future vision and plans of Ulaanbaatar City.
In the course of the Study, the Study Team conducted a Learning Session, entitled Urban Planning Theory and Technologies and Japanese Experiences during the summer holiday season 2007, as intensive workshops for counterpart personnel and all those responsible for urban planning. The JICA Study Team provided more opportunities to discuss the studys draft proposals with local experts, relevant key informants, and international donors, who were deeply interested in improving Ulaanbaatar City. As a result, sectoral workshops on issues, such as land use and zoning policy; housing policy; transportation sector strategies; infrastructure, environment and Ger improvement, were occasionally conducted during planning. The Final Report is expected to be fully utilized in revising the existing Master Plan 2020 along with the legal process stipulated in the Urban Development Law.
1.4
Structure of Final Report

A number of separate volumes of reports were prepared for compilation of outcomes of the Study, as follows: Vol.1: Vol.2: Vol.3: Vol.4: Vol.5: Summary Main Text Project Profiles Technical Appendices (English, Mongolian and Japanese) (English) (English) (English)
GIS Maps and Drawings for Urban Planning (English)
Vol.4 Technical Appendices includes: (1) Data-book on the result of the Household Interview Survey HIS), (2) Technical Findings on Transport Analysis in use of STRADA , a JICA-tailored transport analytical model, and (3) Learning Session Materials.
2. VISION AND STRATEGIES
2.1
Urban Development Visions

The existing Ulaanbaatar Master Plan targeting the year 2020 (referred to as UBMP-2020 hereinafter) was created based on analytical research and insights into the reality way back in 2000. Since then, however, many social and economic changes have occurred, bringing to fore the shortcomings of the UBMP-2020 in terms of its effectiveness as a guide for urban growth management. Five (5) future visions for the city of Ulaanbaatar by 2020 are offered in the UBMP-2020, as follows: 1. First Vision: For the city to be a well-developed capital city of international standard; to have a vibrant economy; to be a world-class business center having a competitive edge in the areas of education, information, science. and technology; Second Vision: For the city to have an appropriate policy on land management and urban development, including developing areas with appropriate infrastructure and for improving the housing conditions of all its citizens; Third Vision: For the city to be healthy, to have a safe environment, an active social life, and a progressive legal framework; Fourth Vision: For the city to have a responsive and efficient public administration, having a participatory approach involving the community and the private business sector in civic services; and Fifth Vision: For the city to be an attractive tourist destination in the Asian region.
2.
3. 4.
5.
These visions addressed in the UBMP-2020 are all appropriate and appreciated. Therefore, this JICA study is looking at the same visions over the same planning horizon and is pursuing very similar goals. Two weak points, however, appear in the planning visions of the UBMP-2020: one is the insights into financing capability. A new concept needs to be employed to encourage the private sector to participate in the provision of public services and infrastructures through a public-private partnership (PPP) scheme. Another point to be noted is the development of the legal framework to materialize these visions.
2.2
Planning Objectives
The UBMP-2020 stipulates several planning objectives, as follows: 1. To determine the basic approach to establish comfortable living conditions for the present or future residents and support sustainable city development in new socio-economic situations; To maintain the equilibrium within natural beautiful places, national parks and the ecological system of the fauna and flora; To create a comprehensive environment in conformity with territorial boundaries, space, and characteristics through traditional methods of urban planning; To meet the safety requirements of transportation and engineering infrastructure; To re-develop Ger areas and residential districts and increase housing supply; To enhance industrial zoning structures and improve land use; and To establish interconnected community centers and improve social infrastructure.
2. 3. 4. 5. 6. 7.
No doubt these objectives are all relevant and appropriate for urban planning, and the same have been adopted in this JICA study. But in addition to these, the following have been further examined in the JICA study: 8. To build new urban agglomerations or towns in a planned manner to accommodate increasing housing demand and economic requirements including those of the industrial and service sectors, and looking beyond 2020; To vitalize commerce, recreation/tourism and urban services in the central business district (CBD) even in winter season; To improve peoples mobility with more energy- and time-efficient public transportation systems along significant corridors; To develop an effective urban planning legal framework in conformity with the Civil Law, Land Law, and other relevant acts/regulations; and To develop a comprehensive housing financing system to help improve the housing conditions of low- and middle-income households.
9. 10. 11. 12.
Figure 2.1
UB Vision 2020 and Refined UB Vision 2030

Refined UB Vision 2030
UB Vision 2020 1: World-class business city, providing with knowledge-based business opportunities
Following the same visions
2: Livable city with appropriate land

management, infrastructure and housing conditions
+
Two more insights need to be addressed: Financing Capability should be enhanced, encouraging the private sectors participation in provision of public services and infrastructures through a PPP scheme. Legal framework: as the tool for growth management and materialization of the Master Plan.
3: Health city with safe environment,

well social life and progressive legal framework
4: International tourist city with

attractive natural and life-cultural assets in Asia 5: Well-governed city with efficient and responsive public administration for citizens and business sector
3. SOCIAL AND ECONOMIC PERFORMANCE & DEVELOPMENT FRAMEWORK
3.1
Socio-economic Conditions in Mongolia and Ulaanbaatar

In imagining the future perspective of Ulaanbaatar City, a major planning issue to address is determining how big the urbanization will be in the future and how long it will last. Hence, inasmuch as urbanization is affected by social and economic conditions, such as the performance of the national economy and migration patterns which in turn also directly affect Ulaanbaatars population, it is necessary to come up with the social and economic projections for the city. Before doing so, however, Ulaanbaatars current social and economic performance is briefly reviewed.
1)
Population Growth in Mongolia and Ulaanbaatar City

Over the past 18 years the national population increased from 2.1 million to 2.6 million. In the beginning of the 1990s, the annual growth rate decreased gradually from 1.6% to 1.3% after the turmoil of the economic transition. Meanwhile, the population of Ulaanbaatar City increased by 440,000 in the same period, from 590,000 to 1,030,000. Although the population growth rates were less than 1% until 1992, it jumped to 3 to 4% p.a. after 1993 and has continued at a similar rate up to the recent year (see Table 3.1). By the end of the 1990s and the beginning of the 2000s, Mongolia experienced some heavy Zud (snow) damages. Together with an unchecked immigration to Ulaanbaatar City, the capitals population growth rate recorded a high of 6.4% in 1999. After that year, however, growth rates kept at more than 4%, that is 5.5% in 2003, 4.2% in 2002, and 4.0% in 2005. Recently, some interesting phenomena took place: growth rates dropped from 4.0% to 3.0% in 2006, but it increased again to 3.7% in 2007 due to subsidies given to children that year, believed to be a lucky one according to the oriental zodiac calendar. On the other hand, the population growth rate of Mongolia has been stable at around 1.2% to 1.3% since 2002. In 2007, the rate rose to 1.6% due again to the belief that children born that year would be lucky. The share of Ulaanbaatars population to Mongolia increased by 8.6 points in 10 years, from 30.5% in 1998 to 39.1% in 2007, as shown in Table 3.1.
Figure 3.1
000 persons 3,000
Changes in the Population of Mongolia and Ulaanbaatar City
60% Mongolia UB City
2,500
% of UB
2,000
40%
1,500
1,000
20%
500
0 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
0%
Year
Source: Mongolian Statistical Yearbook 2006 and 2005, Mongolia in a Market System Statistical Yearbook 1989 - 2002
Table 3.1
Changes in the Population of Mongolia and Ulaanbaatar since 1998

(Unit: 000 persons) Mongolia Ulaanbaatar City 715 760 787 813 847 893 929 965 994 1,031 Growth Rate of Mongolia (%) 1.4 1.4 1.4 1.5 1.3 1.2 1.2 1.2 1.3 1.6 Growth Rate of UB (%) 4.2 6.4 3.5 3.3 4.2 5.5 3.9 4.0 3.0 3.7 % of UB Influential Events Free migration of people Zud Zud Land privatization (Ger area) Zud
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
2,340 2,374 2,408 2,443 2,475 2,504 2,533 2,562 2,595 2,635
30.5 32.0 32.7 33.3 34.2 35.7 36.7 37.7 38.3 39.1
Land privatization (Summer house)
Source: Mongolia Statistical Yearbook
Looking at the 2000 population, as shown in Figure 3.2, shows that the percentages of working age population (i.e., from 15 to 40 years old) in Ulaanbaatar City were higher than those in Mongolia. It can be said that Ulaanbaatar City had younger populations. Figure 3.2
16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Under 1 1-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70+ Mongolia UB City
Distribution of Population by Age Groups in 2000
Source: Mongolian Statistical Yearbook 2006, Mongolia in a Market System Statistical Yearbook 1989 - 2002, Statistical Handbook Ulaanbaatar
Such a rapid population growth in Ulaanbaatar is influenced by a momentum of immigration. Figure 3.3 shows the changes in migration patterns in Ulaanbaatar City. In the first half of the 1990s, as migration was basically controlled, the numbers of in-migrants stayed within a limit. However, after the introduction of free migration in 1997, the number jumped to 15,000 in 1998, and reached 69,000 in 2004. Figure 3.3
80,000 70,000 60,000 50,000 persons 40,000 30,000 20,000 10,000 0 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
In-migration and Out-migration Patterns

In-migration Out-migration
Year
Source: Statistical Handbook of Ulaanbaatar 3rd Edition, Ulaanbaatar City, 2006
Looking into population changes by district, although the population steadily increased in all six (6) districts in the city, Songinokhairkhan (5.2%) and Bayanzurkh (5.5%) posted higher rates than the average (4.2%) over the last five years. The two districts are the located west and east, respectively, of Ulaanbaatar City. The growth rate in Bayangol, or the central district, was 2.6% in the same period. Figure 3.4
250.0 200.0 000 persons 150.0
Population Changes in Ulaanbaatar City by District

Sukhbaatar Chingeltei Bayangol Songino khairkhan Khan-Uul Bayanzurkh Nalaikh Bagakhangai Baganuur
100.0 50.0
0.0
19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05
Year
Source: Mongolian Statistical Yearbook 2006 and 2005, Mongolia in a Market System Statistical Yearbook 1989 - 2002, Statistical Handbook Ulaanbaatar 3rd Edition
2)
Economic Performance of Mongolia and Ulaanbaatar City

(1) GDP and GDP per Capita In the process of shifting toward a market economy in the 1990s, Mongolias economy stagnated. Only since 2002, did the Mongolian economy start to grow. Figure 3.5 shows the changes in the countrys GDP and Ulaanbaatar Citys GRDP since 1999.1 The average annual growth rate of GDP from 1999 to 2007 was 6.1%; on the other hand, that of Ulaanbaatar City was 7.0%, which is slightly higher than the national rate. However, from 2004 to 2007, the average GDP growth rate of Mongolia was 9.0%, and that of Ulaanbaatar was recorded at 5.1%, which shows a lower rate than the national. This situation implies that the current economic boom in Mongolia in the past years came from the high growth in agriculture as well as in the copper and gold mining industries, which are located outside Ulaanbaatar City. Meanwhile, the share of the citys GRDP to Mongolia increased from 47% in 1999 to 58% in 2003; but it dropped to 50% in 2006.
The nominal GDP of Mongolia in the Mongolian Statistical Yearbook was revised in the 2006 and 2007 editions, and each edition shows the GDP in the recent four years. This is why it is difficult to get the medium and long-term time-series data on GDP now.
10
In the last four (4) years, the average annual growth rate of GDP per capita of Mongolia was 7.7%, but that of Ulaanbaatar City was only 1.3%. Increased number of migrants into Ulaanbaatar City resulted in such a low growth rate. Figure 3.5
Tg Million 1,800,000 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 1999 2000 2001 2002 2003 2004 2005 2006 2007
Changes in Economic Activities and Per-capita Products

Tg 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 GDP-Mon GDP-UB GDPPC-Mon GDPPC-UB
The contributions of industries to GDP growth are shown in Figure 3.6. The share of the tertiary sector is the most predominant and constant, ranging from 3.6% to 4.6%. The share of the secondary sector is also constant, ranging from 1.6% to 2.1%. In 2007, the primary sector recorded a 3.4% contribution to the GDP. This is the reason why the real GDP growth rate recorded as high as 9.9%. Figure 3.6
12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% 2005 2006 2007 Net Taxes FISM Tertialy Secondary Primary GDP Growth Rate
Contribution of Industries to GDP Growth
Figure 3.7 shows the distribution of Ulaanbaatar Citys GRDP by industry from 2002 to 2005. In 2005, the percentage of the primary sector was marginal, and that of the manufacturing sector increased to 30% from 20% in 2002. The combined shares of
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the trade and transport-related sectors show more than 50% of the GRDP in four (4) years. Figure 3.7
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2002 2003 2004 2005
Manufacturing Primary
Distribution of GRDP by Industry

Other Servises Financial intermediation Transport, storage & communication Hotels & Restaurants Trade Construction
Source: Statistical Handbook Ulaanbaatar 3rd Edition 2006
(2) Business Enterprises Figure 3.8 shows the changes in the number of business enterprises in Ulaanbaatar City. The number of enterprises in the trading sector increased by 4.8 times from 2,697 in 1997 to 13,025 in 2005, and its percentage increased from 36% to 51%. While the percentage of the manufacturing sector decreased by 8 points, from 16% to 8% of the total. The development of the wholesale and retail trade and repair industry is supported by individual consumption. Rapid inflow of foreign direct investment (FDI) to the mining industry and remittances from overseas workers 2 seem to stimulate household spending in the automobile and housing markets. In fact, industries such as wholesale and retail trade, as well as construction, are stimulating the economy of Ulaanbaatar City. Since these industries will not be an engine of the citys economy in the long term, it will be necessary to promote productive industries which will lead the national economy and earn foreign currency.
2 According to the Mongolian Statistical Yearbook 2007, the net amount of overseas workers remittances was US$ 83.9 million (credit: US$174.3 million and debit: US$90.3 million) in 2007. However, since every urban household has on average one member working abroad, real spending in the automobile and housing markets is believed to be bigger than official statistics.
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Figure 3.8
60%
Number of Business Enterprises by Industry

A griculture
50% M ining 40% M anufacturing 30% Construction 20% 10% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 Trade and repair Other Services
Source: Statistical Handbook of Ulaanbaatar 3rd Edition
(3) Unemployment According to Mongolia Statistics Yearbook 2007, the national unemployment rate is only 2.8%. Although in the past, it recorded a high of 9.0%, it has continuously dropped. The unemployment rate of Ulaanbaatar City is only 1.7% in 2006. These unemployment rates were calculated from registered unemployment or official unemployment rates. Actual unemployment rates, however, seem to be higher than this figure; it is pegged at more than 30% in remote districts, based on interviews done in these areas. Also, according to an interview at a garment factory, the number of employees in the garment industry decreased from 30,000 to 5,000 workers in the last five (5) years due to termination of quotas to China. (4) Foreign Trade Table 3.2 shows the export and import activities in Mongolia. The exported amount increased 2.2 times from US$ 870 million to US$ 1,942 million in the last four (4) years. Copper and gold, which are the major export items from Mongolia, accounted for 54% of the total in 2007. On the other hand, the imported amount increased by 2.1 times from US$ 1,021 million to US$ 2,170 million in the same period, resulting in a trade imbalance of US$ 228 million in 2007. Major import items were mineral fuels (29%), machinery and transport equipment (28%), and manufactured goods (15%). Thus, Mongolia is a typical resource-based country, exporting raw materials, while importing processed and manufactured ones.
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Table 3.2
Major Export and Import Items

(Unit: %)
Export Import 2007 1,942 1.7% 0.0% 70.4% 41.8% 4.6% 0.0% 0.1% 4.3% 1.1% 6.0% 12.1% 12.1% 26.6% 0.9% 5.0% 17.5% 31.4% 5.9% 0.0% 29.3% 0.6% 5.5% 15.0% 28.3% 9.3% 0.0% 29.3% 0.6% 5.5% 15.0% 28.3% 9.3% 0.0% 2005 1,184 10.3% 1.8% 0.7% 2006 1,486 9.6% 1.9% 0.7% 2007 2,170 9.6% 1.9% 0.7%
Commodity group 2005 Total (US$ million) Food and live animals Beverages and tobacco Crude materials, inedible, except fuels of which: Copper concentrate Mineral fuels, lubricants and related materials Animal and vegetable oils, fats and waxes Chemicals and related products Manufactured goods classified chiefly by material Machinery and transport equipment Miscellaneous manufactured articles Not classified elsewhere in the SITC of which: Gold unwrought or in semi-manufactured forms 1,065 1.2% 0.0% 48.5% 30.6% 3.8% 0.0% 0.1% 4.4% 0.7% 10.2% 31.1% 31.1% 2006 1,543 1.7% 0.0% 64.6% 41.2% 4.6% 0.0% 0.1% 4.3% 1.1% 6.0% 17.5% 17.5%
Source: Mongolian Statistical Yearbook 2006 and 2007
(5) Foreign Direct Investment Tables 3.3 and 3.4 indicate FDI by industry and country, respectively. In 2006, almost half of FDI was invested in the mining industry, followed by the trading industry (wholesale and retail trade), sharing 18%. This was reflected by a consumption boom in recent years. Looking into FDI source by country, China ranks first, sharing 47% of the total. Chinese FDI seems to be invested in a wide range of industries, while investment from Canada and the United States is for the mining industry. They made large investments in 2006. Table 3.3 Foreign Direct Investment by Industry
(Unit: US$ 000)
Industry Geology, Mining, Prospecting, Oil Sector Trade, Public Catering Engineering Facilities, Construction Materials Production Banking, Financing Activity Light Industry Others Total 1990-2004 493,973 162,764 55,238 67,105 85,002 256,813 1,120,895 2005 183,962 53,377 773 9,671 1,792 67,265 316,839 2006 195,390 103,388 1,792 11,983 1,454 52,536 366,544 Total (1990 - 2006) 873,325 319,529 57.802 88,759 88,248 376,614 1,804,278 Share (%) 48.4 17.7 3.2 4.9 4.9 20.9 100.0
Source: Data from Foreign Direct Investment Committee
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Table 3.4
Foreign Direct Investment by Country

(Unit: US$ thousand)
Source China Canada South Korea USA Japan Others Total
1990-2004 441,786 174,207 85,180 45,725 66,208 307,788 1,120,895
2005 227,912 1,542 19,004 5,564 5,841 56,975 316,839
2006 171,879 72,180 16,435 37,166 4,728 64,156 366,544
Total (1990 2006) 841,578 247,929 120,619 88,455 76,777 428,920 1,804,278
Share 46.6 13.7 6.7 4.9 4.3 23.8 100.0
Source: Data from Foreign Direct Investment Committee
3.2
1)
Long-term Prospects of Socio-economic Development of Mongolia

Mongolian National Economic Development Targets in Middle and Long Term
Currently, there are two scenarios on the future economic development of Mongolia, i.e. the Millennium Development Goal Based National Development Strategy (MDG-based NDS) approved by the Parliament which sets very ambitious economic growth targets until 2021 and the GDP growth prospect presented in the IMF Staff Report for 2006 Article IV Consultation. The latter views a more moderate economic growth than the former, as shown in Table 3.5. Table 3.5 Target Average Growth Rates in MDG-based NDS and IMF Report 2006
2007 - 2015 MDG-based NDS 14 % 2007 - 2011 IMF Staff Report for the 2006 Article IV Consultation 7.5 % 2015-2021 12 % 2012-2026 5.1 %
Source: Millennium Development Goal Based National Development Strategy, Staff Report for the 2006 Article IV Consultation
The economic development described in the MDG-based NDS targets an average GDP growth rate of no less than 14% and a GDP per capita at US$ 5,000 until 2015. Moreover, the average growth rate between 2015 and 2021 would be no less than 12%, and the GDP per capita would be no less than US$ 12,000, thereby leading Mongolia to becoming a middle-income country by 2021. Meanwhile, the IMF Staff Report, which was based on the economic performance of Mongolia since 2002, predicts that a strong economic performance (i.e., 7% growth)
15
will continue until 2009 and by 2010 record an 11% growth due to the development of a new mining site (i.e., Oyu Tologoi Mine). After 2010, the GDP growth rate will go down gradually from 6 to 5.5% between 2011 and 2014, and reach 5% by 2015. As a result, the average GDP growth rate will be 7.5% from 2007 to 2011. After 2015, service industries will provide a major role in the national economy. That is why the average GDP growth rate after 2015 will be at 5.1% per annum.
2)
Population Forecast for Mongolia

The national population forecast for Mongolia was prepared by the National Statistical Office and the United Nations Population Fund (NSO-UNFPA) based on the 2000 Census. The forecast consists of three (3) scenarios from three (3) different fertility rates, that is the high scenario with an annual population growth rate of 1.3%, the medium scenario with a 1.2% growth rate, and the low scenario with a 1.1% growth rate, as shown in Table 3.6. Table 3.6 Population Scenarios Prepared by NSO-UNFPA
(000 persons) 2000 2005 2,573 2,562 2,552 2010 2,764 2,742 2,720 2015 2,966 2,919 2,884 2020 3,160 3,087 3,039 2025 3,330 3,230 3,168 Average Growth Rate 1.3% 1.2% 1.1%
High Medium Low
2,390 2,390 2,390
Source: Population Forecast until 2025, NSO-UNFPA
As of 2005, the population of Mongolia was 2,562 thousand, following the medium scenario until 2008; thus, the medium scenario will be appropriate for the national population forecast.
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3.3
1)
Socio-economic Development Framework 2020 and 2030 for Ulaanbaatar City

GRDP of Ulaanbaatar City
Since 2002, Mongolia entered a new economic growth period after the economic slump of the 1990s. GDP growth accelerated in recent years, with average growth rates increasing from 6.9% in the 20022004 period to 8.6% in the 2005 - 2007 period. The growth rate of GDP per capita also increased from 5.6% to 7.2% in the same periods. The existing UBMP-2020 and MP 2015 stated economic development targets for Ulaanbaatar, as shown in Table 3.7. Table 3.7 Average Annual Growth Rates in UBMP-2020 and MP 2015
Until 2010 UBMP-2020 9.0% Until 2010 MP 2015 Sources: UBMP-2020, MP 2015 7.5% Until 2020 10.5% Until 2015 7.7%
The JICA Study Team projected the average annual GDP growth rates for Mongolia and Ulaanbaatar until 2030, as indicated in Table 3.8. Since prices of copper and gold are higher and more stable than the IMF report estimated, the JICA Study Team projected a 7% GDP growth for Mongolia which will continue for a longer period. However, the development of new mining sites was not considered due to its high uncertainty. The JICA Study Team expects the benefit from the mining industry will take place in the diversification of the Mongolian economy, stimulating other industries which will also contribute to national economic growth after 2011. In the short term, the growth rate of Ulaanbaatar City is expected to be lower than that of the national GDP due to recent activities in the mining industry and the agriculture sector. However, in the middle and long term, the growth rate of Ulaanbaatar City will exceed that of the country, because the urban economy in Ulaanbaatar will lead the national economic development after 2011. The percentage of Ulaanbaatars GRDP to the national GDP will decrease from 49.7% in 2007 to 47.9% by 2010; but it will start to increase again afterwards, hitting 49.7% by 2030.
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Table 3.8
Assumed Growth Rates of Mongolias GDP and Ulaanbaatars GRDP

Mongolia Ulaanbaatar City Perspective and Assumption
2008-2010
8.3%
7.0%
Economic development scenario prepared by the IMF Staff Report 2006 is applied to this period. GDP growth rates will record 7% in 2008 and 2009, and increase to 11% due to the operation of a new mining site (Oyu Tolgoi) by 2010. However, the impact of national economic development on Ulaanbaatars GRDP will be limited, and it will follow the recent growth rates (7%). That is why the average growth rate of Ulaanbaatar will be lower than the average growth rate of Mongolia. Mining industry will continue contributing to GDP growth. On the other hand, GRDP growth rate of Ulaanbaatar will accelerate due to development of urban industries and urban economy. The growth rate of Ulaanbaatar City will exceed that of Mongolia. GDP/GRDP growth rates will follow the same trend in 2011-2015. Growth rates of Mongolia and Ulaanbaatar will slow down due to a decrease in population growth and maturing of the economy. Growth rate of Ulaanbaatar City will still be higher than that of Mongolia because of a concentration in population and industries.
2011-2015
7.0%
7.5%
2015-2020
7.0%
7.5%
2027-2030
6.4%
6.8%
Figure 3.9
8,000 7,000 6,000 GDO Mill. Tg.(2000) 5,000 4,000 3,000 2,000
Economic Projections for Mongolia and UB City

2,500.0
1,500.0
1,000.0
500.0 1,000 0
2007 2009 2011 2013 2015 2017 2025 2027 2029 2019 2021 2023
UB GDP Per Capita '000 Tg. (2000)
2,000.0
2007~2030
0.0
Mongolian GDP UB GRDP UB GRDP Per Capita
4.7 times 4.9 times 2.7 times
National GDP
UB GDP
UB GDP Per Capita
18
2)
Population Forecast for Ulaanbaatar City

Three (3) population forecasts for Ulaanbaatar City are available, that is NSOUNFPA, UBMP2020, and MP 2015, as shown in Table 3.9. The NSOUNFPA forecast is part of the national population forecast until 2025 and predicts a population of 1.35 million by 2015 at an average annual growth rate of 2.1%. In UBMP-2020, the population by 2020 will be 1.65 million at an average annual growth rate of 4.2%. MP 2015 projected a population of 1.16 million at 2.0% growth. All forecasts were prepared before 2005 when the population growth rate of Ulaanbaatar City was fluctuating heavily. The JICA Study Team recognizes that a push effect (Zud and difficult economic situation in remote areas), and a pull effect (economic development and job opportunity in Ulaanbaatar City) worked very much in the period. Based on the assessment of these forecasts, the JICA Study Team projected the average annual growth rates from 2008 to 2030, as shown in Table 3.10, to decrease gradually from 4.2% during the 20012005 period to 2.0% during the 20202025 period, and to keep this level until the next five-year period (20262030). In the forecast, the population of Ulaanbaatar City will account for 1.57 million and 1.87 million by 2020 and 2030, respectively. Meanwhile, the citys population share to the nation will grow from 37.7% in 2005 to 55.5% by 2030. Table 3.9 Existing Population Forecasts for Ulaanbaatar City
(Unit: thousand persons)
2005 2010 1019.3 1,135.0 1093.4 2015 1,141.1 1,164.7 2020 1,253.5 1,650.0 2025 1,350.6 Average Annual Growth Rate (%) 2.1 4.2 2.0
NSO UNFPA UBMP-2020 MP 2015
894.3 890.0 942.2
Source: Population Forecast 2025, UBMP2020, MP 2015
Table 3.10
New Population Forecasts for Ulaanbaatar City until 2030

2007 2010 1,173.2 1,107.2 66.0 4.0 42.8 2015 1,325.1 1,250.6 74.5 3.2 47.1 2020 1,537.8 1,437.8 100.0 2.3 49.8 2025 1,695.8 1,585.5 110.3 2.0 52.5 2030 1,870.0 1,739.1 130.9 2.0 55.5
Population (000 persons) Central UB (6 Districts) 3 Remote Districts Ave. Annual Growth Rate (%) Proportion to National Population (%) Note: Source:
1,031.2 973.2 58.0 4.0* 37.7
* Average growth rate from 2002 to 2007. JICA Study Team
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Figure 3.10
000 persons 2000 1750
Population Growth of Ulaanbaatar City
1500 1250 1000
750 500 2005
2010
2015
2020
2025
2030
Year
As for the size of households in Ulaanbaatar City, it dropped from 5.4 persons per household in 1989 to 4.6 persons in 2006. This trend will continue up to a certain level until 2030, due to the trend toward the nuclear family. As a result, the number of households will increase more than twice from 224,000 in 2007 to 480,000 by 2030, as shown in Table 3.11. Table 3.11
Year Number of Households (000) Size of Household
Household Characteristics in Ulaanbaatar City from 2007 to 2030

2007 224.2 4.6 2010 260.3 4.5 2015 315.8 4.3 2020 365.6 4.2 2025 417.2 4.0 2030 479.5 3.9
20
3.4
Potential Industries to Lead Ulaanbaatars Economic Growth

Industries that can contribute to a sustainable development of Ulaanbaatars economy need strategic policies to realize their potential.
1)
Promising Industries
Five (5) leading industries, which are endowed with great potential to make a mark in the global market, are tentatively identified, as follows: Mining and related industries; Tourism and related service industries; Cassimere production; Information and communications technology (ICT) and business process outsourcing (BPO); and Agricultural products and food processing industries. The mining industry is important to the Mongolian economy now and in the future. Currently, it shares 12% of the GDP and 60% of exports, and employs 4% of the labor force. Although copper and gold mines are located outside of Ulaanbaatar City (Erdenet and South Gobi), supporting services such as logistics, administration, insurance, spare parts procurement, etc. are provided in Ulaanbaatar City. Tourism is already an important industry for Mongolia. During summer, large numbers of foreign tourists visit the country. Tourist arrivals to Mongolia more than doubled in 6 years (from 158,000 in 2000 to 395,000 in 2006) with an average length of stay of 12 nights and an average spending of US$ 106 per day per person. Based on these factors, the total earnings accounted for about US$ 572 million (Tg.670 billion). Assuming that about 60% of the total earnings circulated within the Mongolian economy, local earnings are calculated at about Tg. 400 billion which is equivalent to 25% of the national GDP. Thus, the tourism sector contributes significantly to foreign currency earnings. It is necessary for Ulaanbaatar City to enhance its gateway function through the development of tourist sites, the development of tourism routes, and the improvement of services. Tourism as a seasonal income earner is an issue that has to be tackled to ensure a stable income from this sector. Tourism products need to be developed in collaboration with both private and public sectors. The value-added production of cassimere is also a promising industry for Ulaanbaatar City from the point of value-added earnings and employment generation. This industry has been supported by its long-term tradition. Although at present this business is still unstable, it has a big potential because Mongolia is and can be the biggest raw material supplier in the world. The industry merely needs a boost in terms of contemporary design development, quality management, and aggressive marketing,.
21
ICT and BPO are newly developing businesses in the country. There are 30 companies belonging to the Mongolia Software Industry Association (MOSA), and 5 to 6 companies work as BPOs. These companies provide outsourcing services to Japanese companies and businesses from other countries. Since many Mongolians are well-educated, have good foreign language fluency, and easily adapt to foreign cultures, characteristics which bode well for working in BPOs, these businesses will provide a big employment potential to younger generations. Agricultural products and food processing industries should be strongly supported by the government under an import substitution policy. Fresh and safe perishable foods are highly in demand by people who have become more health conscious. Agricultural activities should be encouraged in suburban areas in Ulaanbaatar City, with farming business being given tax incentives and subsidies for seeds procurement. Processing industries for agricultural products, such as meats and dairy products, may be located in designated industrial zones in Ulaanbaatar City. Through market forces, the development and growth of these promising industries will affect and stimulate other industries and services, which will in turn spur new businesses and services. This is the process to vertically deepen and horizontally widen the urban economy, thereby leading to a robust urban economy in Ulaanbaatar City. Related and/or derived industries are: (1) Commercial activities for wholesale, retail, and trading; (2) Banking and insurance; (3) Construction and construction materials manufacturing; and (4) research and development (R&D).
2)
Government Strategies and Support

The Mongolian government and the Ulaanbaatar City government should jointly formulate policies to facilitate the growth potential of such potential industries. This concept is illustrated in Figure 5.1. The government should provide preferential to such treatment to such industries mentioned above in the form of incentives, deregulation, human resource development (HRD), and R&D. For related industries, the public sector should allow market forces to drive their growth. Meanwhile, from the private sector, support will be needed in HRD and R&D.
22
Figure 3.11
Necessary Government Support for Leading Industries

Other Industries: - Job creation - Targeting Ulaanbaatar city - Wholesale and Retail Trade - Construction - Construction Material - Others commercial /service activities
Leading Industries: - Foreign currency earning - Targeting international market

-Support Industries for Minig - Support Industries for Mining -Tourism - Tourism - Processing of Cashmere and -Processing of Cashmere Leather -ICT and BPO - ICT and BPO -Agricultural products and food processing
Spillover effect
Common Government Support: - Human resource development - Technical and financial support to start-up firms
Special support for Leading Industry: Improvement of tourist information provision and -- Improvement of tourist information provision and beatification of tourist sites (Tourism) beatification of tourist sites (Tourism) Consolidation of land use and improvement of -- Consolidation of land use and improvement of infrastructure (Cashmere and leather processing) infrastructure (Cashmere) - Provision of of ICT service projects(ICT and BPO) Provision ICT service projects (ICT and BPO)
Special Support for Leading Industry:
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4. REGIONAL DEVELOPMENT STRUCTURE
4.1
Existing Regional Framework

The existing urban master plan, the UBMP-2020, was planned within the national and regional development context. It also considered Ulaanbaatar City and its surrounding area as an independent zone for development planning. Since the city needs to alleviate population concentration by developing satellite cities, the following concepts were proposed: Further development of the existing towns of Songino, Tuul, Ulziit, Khonkhor, Gatsuurt, Jargalant, and Terelj; New-town development in Argalant, Rashaant, Bayanzurkh, and Bayangol; and Free trade zone development around Nalaikh Town.
Communications and utilities were planned to be developed in satellite cities together with the development of small and medium enterprises, thereby leading to the creation of satellite cities in integrated settlement clusters. Meanwhile, the National Development Strategy addressed the priority outcomes of regional development in the Phase I period of 20072015 as follows: Establish industrial and technological parks in regional pillar centers and free economic and trade zones in the regions and make them operational, and Create the foundation for a knowledge-based economy.3
To this end, the implementation strategy for Ulaanbaatar Region includes industrial development in its three remote districts. Ulaanbaatar Region Development Program (20052015) 4 provides the basic principle to develop satellite cities and villages around Ulaanbaatar City to reduce the over-concentration of population and migration to Ulaanbaatar City. In pursuit of this, the development of satellite cities was expected as a result of the relocation of industries from Ulaanbaatar Region.
3 4
The Government of Mongolia, Millennium Development Goals Based Comprehensive National Development Strategy (CNDS) of Mongolia (Draft), Ulaanbaatar City, 2007, p. 95. This program was approved under the Resolution of the Government of Mongolia, No. 197, dated 16 August 2006.
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4.2
Conceptual Scheme of the UB Metropolitan Area

The UB Metropolitan Area encompasses the area within a 50-kilometer (km) radius, and includes Nalaikh, Zuunmod, and the planned New International Airport. The following concept is proposed to develop the UB Metropolitan Area (see Figure 4.1). Figure 4.1 Conceptual Scheme of the Ulaanbaatar Metropolitan Area
International Functions
Urban Transport Network Systems
New Town Development
Water Resource Preservation & Tourism
Ulaanbaatar
Nalaih Industry Development Zone Central Recreation and Natural Conservation Area
Airport city
Bypass
Major urban activity centers are needed to be linked with functional trunk roads such as AH-3, Airport Access, and Railway. The New Airport Access Highway should be developed along with the opening schedule of the New International Airport whose construction has been committed by the Mongolian government with Japanese official development assistance (ODA). Some public-private partnership (PPP) model needs to be explored for the development and operation of this airport access. Given a scheme to combine the construction of the Airport Access Highway with the development of the Airport City, the scheme must be attractive to the private sector. The Airport City should accommodate new economic and business activities to be strengthened by locational advantages, i.e. the area faces the international gateway, based on a long-term perspective. Three types of business opportunities are promising in the airport city. These are: Tourism and related businesses; Aviation businesses such as maintenance workshops for aircraft, air-cargo logistics center, aircraft-parts distribution center, catering centers, etc.; and ICT and knowledge-based businesses.
The Railway Bypass will be developed so as to pass through the new international airport and will function as an international freight line to connect to China and Russia. Regional Logistics Centers are proposed to be located near the divergent
25
points of the railway bypass, or Nalaikh in the east and Tolgoit in the west. Ulaanbaatar City will be served by a well-functioning urban transport system which will be connected to regional and international transport facilities.
4.3
Economic Functions of Remote Districts

As shown in Table 4.1, three remote districts in Ulaanbaatar City hold their own characteristics and attributes. Nalaikh can be regarded as part of the Ulaanbaatar Metropolitan Area, but the other two districts are distant, Bagakhangai and Baganuur are 90 and 140 km away from central Ulaanbaatar, respectively. Therefore, the two districts should enhance their peculiar functions to become engines of socioeconomic development.
Table 4.1
Development Directions for Three Remote Districts in Ulaanbaatar City

Km from UB Central Population 2007 2020 2030
Remote Districts
Direction of Development
Nalaikh Baganuur Bagakhangai
New Industrial Promotion Park & Logistic Center UB Metropolitan Industrial and Energy Center Agro-industrial Center
Total
30 Km 140 Km 90 Km
28,152 25,969 3,864 57,985
55,000 39,000 6,000

100,000
78,500 45,800 6,500

130,900
Nalaikh will be able to become part of the Ulaanbaatar Metropolitan Area, inducing a variety of industrial activities. This district will be an industrial incubator where new industrial and technological undertakings and tests will be encouraged. To facilitate the economic development of this satellite city, domestic and foreign investments need to be attracted. The Logistic Center is another important function to be attached to this town. The population of Nalaikh District is forecast to be 78,500 by 2030, or 2.8 times the 2007 population of about 28,000,. Baganuur is rich in mineral resources, such as coal, and is close to Herlen River where water is plentiful. Based on these characteristics, Baganuur has a great potential of becoming an Energy Production Center as well as a resource-based industrial center. District population is expected to reach 45,800 by 2030, compared to the present 26,000 level. However, should industrial location be promoted, the future population will easily surpass this projection. Bagakhangai is located at the railway junction and can be regarded as the southern gateway to the Ulaanbaatar Metropolitan Area. Because of such a locational advantage, this district has a potential for attracting agro-processing industries in the future,
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targeting at the Ulaanbaatar market. The government should exert its best effort to induce such development of agro-related industries and business by providing incentives for investments in such sectors. Otherwise, this small township would not be able to realize its potential. Figure 4.2 Proposed Development Structure for Ulaanbaatar Metropolitan Area
Tolgoit: Logistic Park Baganuur: Industrial& Energy Center
Airport City New International Airport
Nalaikh: New Industrial Promotion Center& Logistic Center
Bagakhangai: Agro-industry Center
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5. LAND USE AND ZONING
5.1
Proposed Land Use Concepts

The current urbanization trend which is taking place toward the upper stream of the Tuul River tends to increase the damage to its environment, and such a trend should be controlled. To do so, however, the land use of Ulaanbaatar City should be determined based on the following basic strategies. 1. Strictly conserve the watershed and other protected areas which are assessed as environmentally sensitive such as: Eastern areas along the upper stream of Tuul River; Northern hilly areas toward the upper stream of Selbe River and Tolgoit River; and Bogdkhaan Uul Special Protected Area. 2. 3. 4. Control development in land unsuitable for urbanization, including steep land and flood-prone areas; Conserve fertile lands suitable for agriculture; Conserve the ecological network by: Maintaining and improving existing natural networks of forests, waterways, and green areas, and Maintaining the migration routes of animals called biological corridors Taking into account all the conditions abovementioned, the urbanization process should be restricted in the east, north, and south. Massive land development activities for housing and commercial purposes in these three directions should therefore be controlled through legal means (as discussed in the following section). The only suitable direction of urban expansion is toward the west, as seen in Figure 5.1.
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Figure 5.1 Basic Strategy for Land Use & Urban Expansion in Ulaanbaatar City
Selbe River Water Basin Preservation Tuul River Water Basin Preservation
BogdkhaanUul BogdkhaanUul Special Protected Area
5.2
Proposed Institutional Framework for Land Use Management

Urban planning administration aims to formulate appropriate rules, norms, guidelines, for and incentives to development activities which may be shared by citizens and governments. Urban planning decisions should comply with legal rationales; therefore, major decisions and procedures need to be clearly stipulated in laws in the comprehensive legal system. Figure 5.2 shows the proposed hierarchical planning system and the institutional relationships of the city master plan with higher-level plans such as the National Development Plan and the Regional (Capital Region) Development Plan. The important task of urban planning is to guide the administrative territory to be of the most suitable land use. This requires a legally mandated administrative tool for urban growth management or urban development control. To this end, the first planning action must be to evaluate an areas land potential and suitability, and divide it into two categories: (1) urbanization promotion areas UPAs), and (2) urbanization control areas (UCAs). Figure 5.3 shows a conceptual procedure of a legal framework to determine UCAs and UPAs to ensure appropriate land use. To identify UCAs, forest and green areas ideal for use in watershed protection should be given top priority in Ulaanbaatar City, followed by forest reserves, natural parks, natural conservation areas, and flood-prone areas. Those suitable for agriculture may also be protected from urban development.
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Residual areas, or those not categorized as conservation areas, will thus be considered suitable for urban development. Therefore, parts of the residual areas will be designated as UPAs, where urban development activities should be encouraged provided they comply with land-use rules and regulations. For instance, a Zoning System will be applied within designated UPAs. In this process, the most important factor is the institutionalization of the separation of territories into UCAs and UPAs under the Urban Development Law or a related sub-law; otherwise, the concept of boundary will not have any sense in enforcing land-use controls. Because there is normally a great difference in value of land inside and outside the boundary, its designation must be politically sensitive and needs a transparent procedure under the legal system.
Figure 5.2
Overall Structure of Planning System and City Master Plan
Upper Level Plans
National Development National Development Plan (National-Level Plan) Plan (National-Level Plan)
Regional Development Regional Development Plan (Capital Region) Plan (Capital Region) Land Use Plan ( Ulaanbaatar Capital Regional)
Basic Planning Principles
Ulaanbaatar City Master Plan
Urbanization Promotion Area
Urbanization Control Area
Urban Facilities Land Use Zoning

Source: JICA Study Team Source: JICA Study Team
Roads, Parking, Parks, Utilities Schools, Public Services, Terminals, etc.
Urban Development Projects
30
Figure 5.3
Legal Framework for Land-use Management
Forest-reserved Area Nature Park Area Nature Conservation Area Disaster-prone Area Water Resource Prevention Area Agricultural Area Urbanization Promotion Area (UPA) Urbanization Control Area (UCA): Urban development and urban landuse are prohibited or less-prioritized
Rest of the area
Land Use Zoning
Urbanization Control Area (UCA) Urban Promotion Area (UPA) Urbanization Promotion Area (UPA)
To be designated, based on Urban Development Law
5.3
1)
Overall Land Evaluation

Land Suitability Analysis
The land-use potential of the area was evaluated in a rational and systematic way from three dimensions: (1) Natural conditions, (2) Infrastructure conditions, and (3) Socioeconomic conditions. The area was scored in consideration of its strengths and weaknesses in each dimension. For example, as natural conditions are considered as constraints to land utilization, theoretically scores to be given are negative. Development suitability and unsuitability of land types are explained in Table 5.1. Meanwhile, since infrastructure conditions contribute to land development, these conditions are evaluated as positive. Based on the methodology abovementioned, the evaluation scores per dimension were superimposed on a map using geographic information system (GIS) (see Figure 5.4). The resulting map indicated the distribution of land suitable or unsuitable for urban development (see Figure 5.5). This result was used in determining whether or not an area fell under the category of urbanization promotion area.
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Figure 5.4
GIS-based System for Evaluating Land Development Suitability
OVERALL EVALUATION
Socioeconomic Conditions
Accessibility to Sub-center Accessibility to Central Business District
Infrastructure Conditions
Availability of Heating Supply System Accessibility to Road Network
Natural Conditions
Water Resources Preservation Area Steep Area
Table 5.1
Land Type Steep Land Watershed Water Cultivation Area Groundwater Contamination-prone Area Natural Reserves (Legally Designated) Fertile Land Suitable for Agriculture Forest Land Flood-prone Area Inside
Development Suitability Scores of Land Types

Score
- 10 More than 16 Inside Riverbed Inside
-5 13 - 16 Buffer of Riverbed
-4 10 - 13
-3 7 - 10
-2
-1
Other Areas Other Areas Above Groundwater Stream Buffer of Ground water Stream Other Areas
Inside Inside Inside
Other Areas Other Areas Other Areas
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Figure 5.5
Land Development Suitability based on Natural Conditions (UB Metropolitan Area)
Suitable Unsuitable
Most Unsuitable
33
2)
Development Potential Based on Efficient Land Utilization

Development potential was also evaluated based on the extent of land utilization. Efficient land utilization is considered to be achieved when areas are fully utilized, taking advantage of their natural conditions as well as existing urban services and infrastructure. This contributes to minimizing environmental loss and development cost for infrastructure and public services. The analytical result is shown in Figure 5.6. In this figure, areas with higher potential are colored in darker red. These results will be employed to determine urbanization promotion areas in consideration of the results of land development suitability and urbanization trend analyses.
5.4
Enacted and Proposed Zoning Systems

The Urban Development Law, which was recently amended in May 2008, stipulates a zoning system as shown in Box. The zonal categories are seven (7). Residential, commercial, and public land uses are combined into one zone, and no functional distinctions are recognized. This is epoch-making because it is the first enactment of a Zoning System. This law, like the human being, will gradually grow and mature from now on. However, the JICA Study Team will propose a new zoning system, which is not necessarily different from the enacted one, but can be regarded as a detailed institution under the enacted framework, applicable for Ulaanbaatar City in particular. The zoning system aims to formulate a rational urbanization pattern allocating different urban functions in an orderly structure, taking into account the attributes and characteristics of urban areas. Therefore, it is a basic concept that a zoning system shall be applied to the designated urban promotion area, as discussed in the preceding section. The zones within a zoning system are a controversial planning issue. In principle, there are three (3) major zones, that is Housing, Commercial, and Industrial. Several subzones may then be given to each major zone. Table 5.2 presents a proposal for fifteen (15) zones, of which thirteen (13) zones are sub-categorized based on the seven (7) zones stipulated in the amended Urban Development Law, and two (2) additional zone categories. The 15 zones are not necessarily too many, taking into account the complexity of urban activities in the capital city of Ulaanbaatar. Another important proposal is the Special Policy-based Zoning System, which should be associated with the zoning system. The zoning system articulates the desired land uses and/or building uses, while the special policy-based zoning system articulates special urban planning policies or measures to be taken for the designated zone. A policy-based zone can be overlaid with a land-use zone. This system aims to promote appropriate land use with special considerations such as environmental conservation, historical and cultural assets preservation, parking control, and so on, as shown in Table 5.3.
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Figure 5.6 Development Potential based on Adequate Land Utilization (Ulaanbaatar City)
Source: JICA Study Team 35
Box
Newly Amended Mongolian Urban Development Law
In May 2008, the revised Law on Urban Development was passed by the parliament. According to the amended Law, a Zoning System has been stipulated in Article No. 13: Zone Categories of Cities of Towns, and Article N0.14: Requirements for Territorial Zoning, as described below. *** Article 13: Zone Categories of Cities and Towns 13.1. Following zones of cities and towns shall be planned in accordance with the urban development norms, rules and regulations: 13.1.1. residential housing and public zone; 13.1.2. industrial zone; 13.1.3. engineering network and road and transportation zone; 13.1.4. greenery area, recreation and tourism zone; 13.1.5. agricultural zone; 13.1.6. summer housing zone; 13.1.7. special purpose zone. Article 14: Requirements for Territorial Zoning 14.1. Ensuring basic requirements to create healthy and safe requirement any residential buildings, which are planned in accordance with norms and rules relevant to the natural lighting and buildings and structures used for the purposes as training, cultural event, entertainment, science, hospital, sanatorium, recreation, sports, trade, public catering, public services, transport and communications shall be planned, but other buildings and structures, which might influence negatively in ensuring safe living environment shall be prohibited to be planned in the housing and public zones. 14.2. Buildings and structures used for the purpose of industry, public utilities and warehouses and infrastructural structures of engineering, road and transport, which ensure their activities, shall be planned in the industrial zone. 14.3. Buildings and structures of railroad, water and auto transport, air transport and engineering and supply network buildings /drinking and sewage water network, heating supply, communications and power supply network/ and structures shall be planned in the engineering network, road and transport zone. 14.4. Open spaces used for organizing recreational activities involving the public such as suburban forest area, protective strip of forest land, holiday camp, sanatorium, swimming pool, park, sports complex and solarium, strictly protected areas, natural beautiful places shall be included in the green space, recreational and tourist zone. 14.5. Land for running farming, intensified animal husbandry and territory to be used for locating agricultural-purpose buildings and structures and hay-field shall be planned in the agricultural zone. 14.6. Settlement territory without any central infrastructure that is located far from the city center and where the people are able to live temporary in the summer season shall be planned in the summer housing zone. 14.7. Buildings and structures used for civil defense and defense purposes, solid waste dumping site, and cemetery and corpse cremation except governmental reserved lands shall be planned in the special-purpose zone.
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Table 5.2
Major Land Use Zoning System in Amended Mongolian Urban Development Law
Proposed Model for a Zoning System

Proposed System Zone Low-density and Low-rise Housing Zone Vision and Objective
To develop housing areas with good environment and open space at low density. To improve housing environment in association with a wide variety of urban services and commercial activities. To develop intensive housing areas with mid- and high-rise housing buildings and spacious open space. To activate a variety of commercial, business, and service activities for nearby communities. To be intensively developed as pivotal commercial and business centers / sub-centers providing a variety of high-level urban services. To accommodate a variety of small and medium-scale industrial and service activities, including manufacturing, warehouses, goods distribution facilities, workshops, etc. Land-use changes to housing areas may be allowed, given environmental improvement measures. To accommodate exclusively large-scale industries and utility plants with well-functioning infrastructure to support such production activities. To be protected from any kind of housing, commercial & industrial development. No buildings other than for public purposes are allowed. To be developed as parks and landscape areas for public recreation and tourism. No buildings other than for public purposes are allowed. To promote agricultural activities to supply city markets with fresh vegetables. To be designated as public graves, military-purpose facilities, and others. Factories/plants for utilities and engineering facilities fall under the Exclusive Industrial Zone. To be managed within human settlements, minimizing negative impacts on the environment To be strictly conserved for watershed protection. To be developed as new towns driven by PPP integrated with special urban functions such higher education, knowledge-based industries, R&D, commercial and business, and recreational functions, giving full consideration to energy-saving utility systems.
Residential Residential Housing and Public Zone
Housing & Public Mix Zone High-density and High-rise Housing Zone Neighborhood Commercial Zone Commercial & Business Zone
Commercial and Public
Industrial and Housing Mix Zone Industrial Industrial Zone
Exclusive Industrial Zone Green, Open Space & Preservation Zone Park, Recreation and Tourism Zone Agricultural Zone Special-purpose Zone Utility Zone Environmental Conservation Zone Water Preservation Area
Green & Recreational
Greenery Area, Recreation and Tourism Zone
Agricultural Zone Special-purpose Zone Engineering Network, Road and Transportation Zone Summer Housing zone -
Others
New Town Development Zone
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Table 5.3
Special Policy Zone High-rise and Intensive Land-use Promotion Zone
Proposed Special Policy-based Zoning System

Objective and/or Target To develop and/or redevelop CBD and sub-centers with intensive land use for business, commercial, and service functions. Within this zone, high-rise buildings over 80 meters in height are not allowed. To improve and revitalize historical buildings and urban amenities. To preserve assets and heritage for tourism development as well as citizens. To develop parking lots/space with involving private sector participation and traffic management measures. To designate the area adjacent to the New Ulaanbaatar International Airport. as the Airport City Relevant Law/Regulation Building Code; Fire Protection Law
S1
S2 S3 S4 S5
Beautification Promotion Zone Historical and Cultural Conservation Zone Parking Management & Control Zone Airport City Development Zone
Historical and Cultural Assets Preservation Law Traffic Management Law Building Code Urban Development Law
5.5
Proposed Zoning System for Ulaanbaatar City

The JICA Study Team proposes a zoning system for Ulaanbaatar City based on the legal framework of urban planning as discussed in the preceding Section 5.4. The draft is depicted in Figure 5.7. As summarized in Table 5.4, the area covered with this zoning system is approximately 27,680 ha in which the Urbanization Promotion Area (UPA) is 18,470 ha, or 66.7% of the total zoning area and the preserved area for Water Resource Prevention and Environmental Protection accounts for 9,200 ha, or 33.3%. Meanwhile, the three (3) major zones, i.e. Residential Housing Zone, Commercial and Business Zone, and Industrial Zone, are allocated with 10,255 ha (37.1%), 2,303 ha (8.3%), and 1,990 ha (7.2%), respectively. It is noted that the zone for Greenery Area, Recreation and Tourism totals 4,316 ha, meaning the per capita green area is more or less 25 m2 by 2030, a level which will satisfy the basic standard (20 m2) for urban development as discussed in Table 8.1 in Chapter 8 of this Report. This draft proposal should be further clarified with the authorities concerned and urban planners. Some numerical indicators to regulate the physical and spatial form of buildings and facilities are popular in advanced countries in association with the zoning system. These are, for instance, floor area ratio (FAR % = total floor area/the land area), building coverage ratio (BCR % = ground floor area of the building/the land area), and maximum height of building, setback, so on. The appropriateness of these numerical regulations on building construction should be further elaborated. For this purpose, it is recommended that a professional committee be organized at both the national and local government level to deliberate on these planning issues.
38
Table 5.4
Major Land Use
Designated Areas in the Draft Zoning Map

Designated Area in Zoning Map
Proposed Zoning Categories Area (ha) Low-density and Low-rise Housing Zone 5,902 2,879 1,473 648 1,655 1,529 461 3,645 671 867 443 5,559 1,943 27,676 18,472 9,204 Share (%) 21.3% 10.4% 5.3% 2.3% 6.0% 5.5% 1.7% 13.2% 2.4% 3.1% 1.6% 20.1% 7.0% 100.0% 66.7% 33.3%
Total Area (ha)
Total Share (%)
Residential
Housing & Public Mix Zone High-density and High-rise Housing Zone
10,255
37.1%
Commercial and Public Industrial
Neighborhood Commercial Zone Commercial & Business Zone Industrial and Housing Mix Zone Exclusive Industrial Zone Green, Open Space & Preservation Zone Park, Recreation and Tourism Zone Agricultural Zone Special-purpose Zone
2,303
8.3%
1,990
7.2%
Green
4,316
15.6%
Others
Utility Zone Environmental Conservation Zone Water Preservation Area New Town Development Zone
8,812
31.8%
Total Area Urbanization Promotion Area Water Preservation Area and Environmentally Protected Area
27,676 18,472 9,204
100.0% 66.7% 33.3%
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Figure 5.7
Proposed Zoning System for Ulaanbaatar City
40
5.6
1)
Development of a Compact City

Alternative Scenarios on Growth Management
Given a scenario of Do-Nothing in terms of land-use management during urbanization, urban sprawl will continue to take place in any available areas in Ulaanbaatar City. Land occupation will be disorderly, thereby blighting the city and eroding its potentials for urban economic growth. Therefore, the management of urban growth will surely become crucial along with the growing urban economy. Based on the same recognition as mentioned above, the UBMP-2020 proposed a controlled expanded urbanization pattern in association with the development of several new urban settlements. This approach would be appropriate given a well-functioning management system for land development and construction activities by the private sector. Another scenario, which deserves to be pursued in revising the Master Plan, is the so-called Guided-growth approach in forming a Compact City, which does not allow urban sprawl. Based on past experiences in other cities in the world, the public mass transit system will be an effective tool to guide urban development activities; so the compact city is regarded as the result of a mass-transit-led urbanization which integrates transport systems and land-use management.
2)
Urban Form of a Compact City

A Compact City can be defined in several ways depending on the characteristics of the city and the planning objectives. Nowadays, the compact city concept is often used as a planning approach to form an environmentally sustainable urban system, or an energy-efficient urban structure with a rapidly increasing urban population. The first definition was made by Danzwik and Saaty (1978), which says that a compact city should have the following conditions and/or elements: High-dense settlements; Less dependence on automobiles; Clear boundary from surrounding areas; Mixed land use; Social equity; Self-sufficiency in daily life; and Independent governance.
In addition, the following planning issues should be addressed to materialize a compact city: Quality Mass Transit Corridors: An efficient public transportation system, comprising mass transit as backbone and effective feeder systems, is established. Integrated Urban and/or Land-use Development and Revitalization of Inner City: High-dense habitation and intensive land use for commercial and business activities
41
need to be promoted. Efficient Supply of Social Infrastructure and Public Services: Energy-saving/efficient and resource recycling-oriented urban systems are pursued. Adequate Institutional Framework for Private Sector Investment: Properly managed and active private sector participation in developing a compact city is essential. Figure 5.8 From Urban Sprawl to a Compact City
Urban Sprawl
Compact City
3) Urbanization Pattern under the Compact City Scenario

The Compact City Scenario requires smaller urbanization promotion area than that of Trend Scenario, because of higher densification of the existing urban areas and prevention of disorderly urban sprawl. On average, the density of an existing urban area is about 60 persons/ha. The underlying issue in a compact city is how much the existing built-up area can accommodate newcomers or, in other words, how high the population density can become. Facilitation of urban redevelopment and/or renewal will be a prerequisite in pursuing the concept of a compact city. An examination of future urbanization patterns by 2030 was made and the results are summarized in Table 5.5, presenting a comparison between Trend (Do-nothing) Scenario and Compact City Scenario in terms of population, urbanized area, and population density in four (4) categories of areas, i.e. 1) CBD; 2) Central area (within 5-km radius from the center); 3) Mid-urban area (within 10-km radius); and 4) Suburban area (beyond 10-km radius). It is obvious from Table 5.5 that the urbanized area of the compact city will be smaller than that of the Trend Scenario, totaling about 19,300 ha for the former and about 25,000 ha for the latter by 2030. Approximately 9,000 ha will be added from the 2007 area under the Trend Scenario, compared with about 5,700 ha under the Compact City Scenario. The average population density will be 90 persons/ha for the compact city, compared with 69.4 persons/ha for the Trend Scenario.
42
A comparison in area distributions of population and density are as shown in Figures 5.9 and 5.10. The Compact City tends to facilitate more densification in the central area with controlling urban sprawl over sub-urban areas, therefore benefits from the Compact City will lead to more efficient transportation, higher peoples mobility, more efficient infrastructure network and cost-performance and less environmental load on the entire city. Figure 5.11 shows a geographical pattern of population distribution examined as a development framework in 2030. Table 5.5 Comparison of Urbanization between Trend and Compact City Scenarios
(C) Population Density (A/B) (A) Population Present 2007 CBD Central Urban Sub-urban Total 77,800 469,100 243,200 155,600 945,700 Trend 2030 107,200 588,100 394,800 648,900 1,739,000 Compact 2030 134,900 657,400 547,800 398,900 1,739,000 (B) Urbanized Area (ha) (persons/ha) Present 2007 540 4,490 4,300 6,590 15,920 Trend 2030 570 5,690 6,130 12,670 25,060 Compact 2030 570 4,800 5,950 8,010 19,330 Present 2007 144.1 104.5 56.6 23.6 59.4 Trend 2030 188.1 103.4 64.4 51.2 69.4 Compact 2030 236.7 137.0 92.1 49.8 90.0
Note: Urbanized Area for Compact City Scenario includes urbanized area in the outside of Urbanization Promotion Area (UPA). Total area of UPA of Zoning Map is about 18,500 ha. Source: JICA Study Team
Figure 5.9
Comparison of Population between Trend and Compact City Scenarios

700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 CBD Central Present (2007) Trend (2030) Urban Compact (2030) Sub-urban
43
Figure 5.10 Comparison of Population Density between Trend and Compact City Scenarios
250.0
200.0
150.0
100.0
50.0
0.0
CBD
Central Present (2007) Trend (2030)
Urban Compact (2030)
Sub-urban
Figure 5.11
Population Distribution under a Compact City Concept by 2030
44
4)
Urban Structure of a Compact City

A model of urban structure under the Compact City Scenario is shown in Figure 5.12. This land-use and urbanization pattern is provisional and based on several strategies and concepts, as follows: Development of Unique New Towns: Two different types of new towns will be developed, namely a Science and Technology Town (Ulaanbaatar West) and a Knowledge City to accommodate more or less 100,000 persons in new urbanization areas. These new towns will be located along two urbanization corridors, i.e. western and southwestern corridors, within a 20-km radius from the existing CBD; Relocation of Higher Education Facilities Currently Located in the CBD: The development of a Science and Technology Town and a Knowledge City will offer better places and opportunities to facilitate innovative education and academic R&D. Many universities and higher education institutions located mainly in the existing CBD will be moved to such unique new towns in suburban areas; Restructuring of Existing Industrial Areas: Existing industrial areas occupy extensive tracts of land and are inefficiently used. Environmental problems have been generated by their operation due to their proximity to the central area and the Tuul River. It can be observed that a number of factories are either not operating anymore or have poorly managed facilities. These factories and warehouses should be encouraged to relocate to the planned industrial parks or designated industrial zones. Vacated areas should be converted into a more efficient land use for housing and/or commercial uses. Development of Mass Rapid Transit Systems: Two lines of a rail-based public transportation system will be developed along the two urbanization corridors above mentioned. The first line, initially called the Red Line, will run on Peace Avenue from the present east tram terminal and passing through the CBD to connect to the Knowledge City at a length of about 27 km. The second line, initially called the Blue Line, will run from the northern edge of the CBD through Peace Bridge to the proposed Science and Technology Town at a length of about 20 km. Sections of both lines running through the CBD will be underground (approx. 5km). These new public transportation systems may be named Ulaanbaatar Transit System (UTS). Redevelopment of Sub-centers Centered on Railway Stations: Redevelopment of the surrounding areas of selected UTS stations for intensive land use should be promoted. A number of sub-centers whose development as commercial, service, and business centers will be included in the revised Master Plan. In addition, underground malls at railway stations at Sukhbaatar Square and Nomin Department will be developed to provide gathering places even under severe winter conditions in Mongolia, as illustrated on Figure 5.13. This redevelopment will contribute to increasing the number of railway users and tourists. Since peoples mobility will not lessen even in winter, the urban economy will benefit from it.
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Figure 5.12
Concept of a Compact Ulaanbaatar City
Restructuring and Improvement of Ger Areas/Ger Settlements: Several measures/programs should be explored to improve Ger areas. Under a resettlement program, those who currently reside in flood-prone and hazardous areas in the northern hills should be relocated to urbanization promotion areas. A land readjustment program should also be introduced to improve community infrastructure and housing conditions. These programs need to be combined with the development of affordable social housing. Protection from Floods and Landslides: Roads on the northern hills will serve as boundaries of the urban promotion area. As such, road sections will be designed with the prevention of floods and landslides in mind. Development of Green Belts: Green belts will be developed between the existing urbanized areas and new towns. It will be integrated into a network of natural environment at the regional level. Figure 5.13 Image of Underground Malls at Railway Stations
5)
Green Network for a Compact City

Green space and parks are important elements to control the disorderly urban development expansion and to uplift urban environmental quality and livability. Figure 5.14 shows the proposed green network to be incorporated into the structure of a compact city. Rivers, swamps, hills, open spaces, and roads/streets with greeneries will be networked to form a chain of greeneries that can function as biological corridors for insects and animals. For this purpose, design standards for greening roads/streets need to be formulated, and riverside recreational parks are also developed to conserve water resource potentials. In addition, underground reservoirs are recommendable to reserve rain water and to effectively supply water for planting in street greening, pocket parks, etc.
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Figure 5.14
Proposed Green Network in Ulaanbaatar City
6. URBAN TRANSPORTATION SYSTEM
6.1
1)
Worsening Traffic Conditions

Overview of Traffic Behavior in Ulaanbaatar City
Current transportation demand in Ulaanbaatar City is estimated to be 3.4 million trips/day including walking. The demand is composed of walking (30.6%), car (24.2%), taxi (9.2%), bus (33.4%), and others (2.6%) (see Figures 6.1 and 6.2). Figure 6.1 Travel Demand by Purpose
To Work 16.1%
Figure 6.2
Travel Demand by Mode

Others 2.6% Walking 30.6%
To Home 42.2%
To School 9.0% Business 3.3%
Bus 33.4%
Private 29.4%
Taxi 9.2%
Car 24.2%
When walking is excluded, the total demand is 2.3 million trips/day, comprising 34.8% for car, 13.3% for taxi, 48.1% for bus, and 3.8% for other vehicles, as shown in Table 6.1.
Table 6.1
Mode Walking Car Taxi Bus Others Total Source: To Work 15.7 31.7 10.1 38.9 3.9 100.0 To School 41.9 9.6 5.0 42.9 0.6 100.0
Transportation Demand by Mode and Purpose

Business 14.3 41.1 10.7 22.3 11.6 100.0 Private 36.0 26.5 9.0 26.2 2.3 100.0 To Home 31.3 21.5 9.8 35.2 2.1 100.0 Trips (000/day) 1,031 816 311 1,127 88 3,373 Total (%) 30.6 24.2 9.2 33.4 2.6 100.0 Excluding Walking (%) 34.8 13.3 48.1 3.8 -
JICA Study Team.
49
Meanwhile, road traffic has constantly increased along with population growth and increase in vehicle numbers. During the period 1998 to 2007, traffic volume in the city center doubled. Travel speeds of cars decreased from about 40km/h to 2530km/h on main roads between 2001 and 2007. In 2007, the number of registered vehicles in the city was only about 92,700 which is still low, but it increased by 11.6% between 2001 and 2007. The transportation sector in Ulaanbaatar City is confronted with various problems and concerns. Although current mobility and accessibility may still be tolerable to most people in the city, the situation will quickly worsen if urban population further increases, urban areas expand, and transportation demand intensifies without a corresponding provision of infrastructure and services. The citys main problems and concerns on the current traffic/ transportation situation are as follows: Increasing traffic congestion; Decreasing level of safety and amenity of road transportation; Unsatisfactory level of public transportation; Low awareness of road users; Lack of traffic management capacity; and Deficient road transportation infrastructure/ facilities.
The causes of these problems are complex and interrelated, requiring both short-term and long-term attention, as well as an integrated approach covering infrastructure management and user awareness; transportation and land use; and economic, social, and environmental aspects, among others.
2)
Analysis of Urban Transportation Situation

Overall transportation demand in Ulaanbaatar City is estimated to be 3.4 million trips a day including walking or 2.3 million trips a day excluding walking. This trip rate or number of trips made by a person per day is 3.9 including walking or 2.7 excluding walking. Trip rates in the city are relatively high compared to other cities in Asia.5 Although the reasons for the high trip rates of Ulaanbaatar residents cannot be determined precisely, it may be attributed partly to social factors and partly to the fact that the land-use pattern and community structure require more trips to access necessary services. The main characteristics with regard to the choice of transportation modes are as follows: a) b) Dependence on cars is high among households with a car (49%), while low among those without one (11%). However, those without a car still use it to travel (32%); The use of public transportation is high among all households. Those without a vehicle show the highest (52%), while even those with a car have a relatively high share (27%). The use of bicycles, motorcycles, and private buses, such as company
The trip rates of Ho Chi Minh City (Vietnam), Manila (Philippines), and Chengdu (China) are 3.0, 2.2 and 2.6 including walking and 2.5, 1.8 and 1.8 excluding walking, respectively.
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or school buses, is not popular. Taxis are commonly used by all households. c) The choice of transportation modes varies by travel purpose. For to work purpose, bus (38.9%) and car (31.7%) are mainly used, while for to school trips, bus (42.9%) and walking (4.5%), for business purpose, car (41.1%), for private purpose, walking (36.0%), car (26.5%) and bus (26.2%) are mainly used. There are peak travel periods, i.e. 7-8 a.m., 12 noon-1 p.m., and 5-6 p.m., as shown in Figure 6.3.
Figure 6.3
Private Business To School To Work To Home
d)
Hourly Distribution of Travel Demand
350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 1 2
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Started Time
Note: Number of trips by time started and purpose. Source: JICA Study Team
While travel speeds on roads, queue length at intersections, and volume-capacity ratio at road links are common indicators in urban transportation planning, the study also analyzed average travel time of a trip as an indicator of accessibility in the city regardless of the quantity and quality of infrastructure services. Results show that average distance of and time spent on a trip from an origin to a destination in the city are 29 minutes and 3.9km, respectively (see Table 6.2).
Table 6.2
Trip purpose To work To school Business Private To home Total
Accessibility of Urban Transportation in Ulaanbaatar City

Time (min) 32 27 32 26 30 29 Distance (km) 4.5 3.3 4.3 3.6 4.0 3.9 Mode Walking Car Minibus Standard bus Taxi Total Time (min) 14 28 39 43 27 29 Distance (km) 1.3 4.9 5.4 5.4 3.4 3.9
Source: Household Interview Survey, 2007, JICA Study Team
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While traffic congestion is a common problem in most of the worlds medium to large cities, although the situation and causes often differ, there are still no universal indicators to aid a common understanding by all of what constitutes traffic congestion. However, the JICA Study Teams analysis of traffic congestion in Ulaanbaatar has resulted in the following observations: In general, the level of traffic congestion in the city is not so serious based on a number of indicators, such as average travel speeds of vehicles on major roads (2030 km/h), average travel time of to work trips (about 30 minutes), and a comparison with other cities in Asia as observed by the JICA Study Team; Traffic congestion is limited to certain sections during peak hours (morning, lunch time, and evening) and do not last long. Traffic congestion is largely due to three (3) major factors, namely: 1) poor behavior of road users, including drivers and pedestrians, who often do not observe traffic rules, 2) poor traffic control and management by enforcers, 3) inefficient use of available engineering measures at intersections to manage traffic lanes, etc.
An analysis based on STRADA was conducted in the study indicating that the capacity of existing roads is underutilized and that it could be increased by as much as 20% by merely implementing the traffic management measures mentioned above without putting in substantial funding. Therefore, if the city can formulate an effective mechanism based on this, costly infrastructure investments in the future can be avoided and higher economic returns can be generated (see Figures 6.4 and 6.5).
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Figure 6.4
Assumed Daily Traffic Congestion on Existing Road Network in 2007 (Full Link Capacity)
Congested
Source:
JICA Study Team
Figure 6.5
Assumed Daily Traffic Congestion on Existing Road Network in 2007 (80% of Link Capacity)
Congested Source: JICA Study Team
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6.2
1)
Prospects of Traffic Congestion

Traffic Simulation on Do-nothing Scenario
The real threat of traffic congestion in the city will occur in the future and this may require fundamental policy interventions rather than short-term measures and symptomatic treatment. The combined impact of population growth, urban area expansion, and increased car ownership rates in the city is anticipated to be enormous. By 2030, the population is expected to double, urban areas to expand, and car ownership rates to increase from 20% of households to about 60%. The latter alone indicates that the number of cars will have increased six (6) times the current level. An analysis of a Do-nothing Scenario by 2030, based on the STRADA6 model also clearly indicates that traffic congestion will occur everywhere, as seen in Figure 6.5, unless strategic measures are implemented before then. Figure 6.6 Traffic Congestion by 2030 under a Do-nothing Scenario
Congested
Source:
JICA Study Team.
Mitigating, if not removing, future traffic congestion in the city will be a big challenge and will require much more comprehensive and strategic interventions than relatively simple measures which are only effective in improving the current situation. The basic factors which affect traffic and congestion include the following:
The JICA Study Team simulated the future traffic situation on roads under different scenarios using the STRADA model. The Do-nothing Scenario, meaning no projects are implemented, shows the traffic situation when future demand is assigned onto the existing road network.
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Urban structure and land-use pattern, specifically the size of the urban area as well as the density of population and activities; Modal policy on public and private transportation, specifically the provision of mass transit system and management of car use; and Provision and management of transportation infrastructure, specifically road network development, traffic management measures, as well as provision of parking and other transportation facilities.
2)
Comparison of Do-nothing (trend) and Compact City Scenarios

Toward 2030, a critical planning issue must be how to manage the citys growth along with improving peoples mobility. As explained in Section 6.4, the following two scenarios of growth pattern, the Trend Scenario and the Compact City Scenario, were compared in terms of peoples mobility. Results of the analysis are as follows (see Table 6.3): Although the total number of trips/day will only double between 2007 and 2030, passenger-kilometers will increase by 3.3 times under the Trend Scenario and 2.7 times under the Compact City Scenario; The average trip length of private transportation will increase between 2007 and 2030 from 5km to 7.2km under the Trend Scenario and only 5.9km under the Compact City Scenario due to prolonged trips as a result of urban area expansion; and The reason the average trip length of public transportation will not increase is attributed to the assumption that mass transit routes have been developed thereby improving connectivity in the urban areas, especially under the Compact City Scenario wherein future urban development is closely integrated with the development of mass transit lines.
An explicit conclusion from this simple analysis is that the development of a compact city with an effective mass transit system can contribute greatly to the reduction in traffic congestion and savings in infrastructure provision. Table 6.3 Impact Analysis of Urban Growth on Transportation by Scenario
2030 Scenario 2007 Trend No. of trips Passenger-km Average Trip Length (km) Private transportation Public transportation 1.0 1.0 5.0 4.9 2.0 3.3 7.2 6.0 Compact City 2.0 2.7 5.9 5.0
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6.3
1)
Urban Transportation Network Development

Objectives and Strategies for Transportation Development
While Ulaanbaatars development is directed at realizing compact, efficient, and environment-friendly urban areas by managing its growth and land use through an improved planning and institutional framework and sector management capacity, leveraging urban growth and formation on transportation must be exercised by interfacing planning and development between urban and transportation sectors to create more synergy. For this purpose, seven (7) strategies are recommended, as follows: Strategy 1 - Establish competitive public transportation system to promote public-transportation-based urban development: Worldwide experiences clearly indicate that large urban areas, like the future Ulaanbaatar City with a population of more or less two million, can not be sustained without structuring them with a public transportation orientation, which is the only way to ensure adequate mobility and equitable accessibility to work and essential services for all in the future. Increasing requirements for better environment and energy saving also support the promotion of public-transportation-driven urban development. Strategy 2 - Manage car use effectively: How to use cars in future Ulaanbaatar has to be discussed. While restraint on car use is a common trend in many cities in the world, Ulaanbaatar should establish its own way of managing car use. It is the JICA Study Teams view that the city should provide opportunities for using cars and other private vehicles especially during weekends and off-peak hours to take advantage of the citys natural environment; its green and open spaces can provide rich recreational opportunities to residents and visitors alike. On the other hand, during peak hours and in the city center where demand concentrates, private cars should be strictly controlled and the people encouraged to use public transportation instead. Strategy 3 - Develop and maintain high-quality transportation infrastructure especially roads: Roads provide the most fundamental space for urban transportation services both for vehicular and pedestrian traffic. Their quality directly affects the economy, safety, and comfort of the traveling public and the operation of service providers. Although Ulaanbaatars extreme climate conditions prevent the government from spending on the construction and maintenance of high-quality infrastructure, it is this very same reason why the government should invest more in it in order to provide better transportation services and productive environment for a growing economy. Strategy 4 - Develop effective interface between regional and urban transportation, including road, rail, and air transportation: As Ulaanbaatar is the capital and international gateway of the country, international and regional transportation is concentrated in the city. Since urban traffic by its very nature is vastly different from regional traffic, their interface in urban areas must be carefully designed to avoid highly damaging socio-economic and environmental impacts, chief among them is traffic congestion. It is thus advisable to, for example, carefully align the function of the Mongolian railway and the Asian Highway No. 3 with that of urban transportation in
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order to achieve smooth interface and synergy. Stage 5 - Enhance transportation environment and disaster preparedness: The transportation sector is expected to become a major contributor to future air quality as vehicular traffic increases and the pollution from ger housing areas and that from power plants are eliminated. The sector must also improve the transportation environment for pedestrians and the physically challenged, while at the same time attending to various environmental issues such as flood protection and urban landscape enhancement. Strategy 6 - Provide adequate institutional arrangements to support improved urban transportation development and management: Urban transportation development requires strong financial, social, and institutional backing. To support the funding requirements for capital and recurrent investments, a more active involvement of the private sector as well as the imposition of user charges need to be promoted. In addition, communities and stakeholders must participate in the process of planning and project development. Moreover, effective and efficient development and use of transportation infrastructure and system require a pool of qualified human resources and a capable organization, as well as modern planning and management tools. Strategy 7 - Promote social awareness of urban transportation problems and issues: As it was clearly shown in preceding discussions, the current traffic situation and problems can largely be attributed to low awareness and understanding among the people of traffic rules and regulations as well as the consequences of not following them. The society as a whole must thus be engaged in order to promote an efficient and pleasant transportation environment in the city.
The above strategies are further elaborated into a number of planning directions as shown in Table 6.4.
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Table 6.4
Strategy 1. Establish competitive public transportation system to promote public-transportationbased urban development
Basic Strategies for Urban Transportation Development

Planning Direction Establish a hierarchical public transportation system comprising LRT/BRT as the core system and where buses, minibuses, and taxis are effectively integrated. Integrate mass transit system (LRT/BRT) with urban development at and around terminals/stations as well as in its influence areas. Practice strategic implementation methods for improved cost recovery and in resettlement planning through phased development, land readjustment, urban renewal, among others. Improve roadworthiness and emissions of vehicles through improved vehicle registration/inspection as well as pricing on vehicle ownership. Control use of cars to avoid congestion through pricing for parking and traffic control, especially in the city center and congested locations. Provide adequate space/facilities for cars and vehicles in strategic locations.
2. Manage use of car effectively
3. Develop and maintain high-quality transportation infrastructure, especially roads
Immediately improve road maintenance and rehabilitate existing network, including removal of bottlenecks and construction of missing links. Strengthen the hierarchy of road network comprising primary, secondary, and tertiary roads. Develop/improve community roads.
4. Develop effective interface between regional and urban transportation
Integrate inter-city and urban transportation network and services as well as intermodal functions among road, rail, and air transportation but segregate inter-city and urban traffic in urban areas. Develop/relocate inter-city goods distribution/logistics facilities in/to strategic locations of the above integrated transportation system. Improve road space and facilities to provide safe, pleasant, and barrier-free environment for pedestrians, including the physically challenged and non-motorized transportation. Enhance traffic safety for all road users throughout the year by way of expanding education and campaign on traffic safety, strengthening enforcement, and improving safety facilities/equipment. Develop roads in integration with preventing disasters such as flood.
5. Enhance transportation environment and disaster preparedness
6. Provide adequate institutional arrangements to support improved urban transportation development and management 7. Promote social awareness on urban transportation problems and issues Source: JICA Study Team
Establish improved mechanism to better develop roads including land acquisition, while minimizing negative impacts such as involuntary resettlement and excessively high compensation costs. Develop sustainable funding mechanism for roads development and maintenance, including increase in road user charges, among others. Strengthen capacities in transportation planning and management through expanded trainings and improvement of related universities. Develop practical rules and regulations. Expand traffic education and campaigns on transportation problems and issues. Develop indicators and monitoring system on urban transportation problems.
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2)
Overall Urban Transportation Network

The future transportation network of the city must be planned in such a way that it will not only enhance peoples mobility, but also provide a foundation for the sustainable growth of the urban economy and ensure environmental sustainability. The proposed transportation network was thus prepared based on the following concepts and these concepts are illustrated on Figure 6.6: Development of the east-west and north-southwest mass transit corridors integrated with medium- to high-density mixed-use urban development. Candidate types of mass transit system include light rail transit (LRT) and bus rapid transit (BRT) depending on demand and further technical study; Development of the east-west transportation corridors comprising an east-west mass transit corridor (Peace Avenue) and two major east-west roads running parallel in the north (Naraizam Street and its extensions) together with a number of north-south connectors to form a strong ladder-type core transportation system. As the two parallel roads are located at only about a kilometer from the mass transit corridor, those residing or working in the vicinity can reach a mass transit station within 15 minutes of walking; and Development of a ring road covering the CBD and the strict implementation of traffic management measures such as area licensing scheme (congestion pricing) for the CBD. Together with the provision of modern mass transit services, the traffic situation in the CBD is expected to dramatically improve.
The proposed network plan also includes new types of urban road such as urban expressways and buffer roads. The urban expressway, which will be located along the existing Mongolian railway right of way7, intends to further improve vehicular traffic in the city. It will be a toll road and a self-financing project. On the other hand, buffer roads will be constructed to protect main urban areas from flashfloods caused by the fragile natural conditions, as shown in Figure 6.7.
The right of way of the Mongolian Railway is so wide that it can accommodate an expressway. 59
Figure 6.7
Concept of the Future Transportation Network
LRT (Light rail transit) BRT (Bus Rapid Transit ) Bus Minibus Taxi/car Walking
UBs opportunities Linear urban structure 5km

Riding habit Construction space Peoples consensus
Figure 6.8
Urban Expressway
Proposed Road Types

Buffer Roads (Disaster Prevention Road)
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3)
Public Transportation System

(1) Current Situation Public transportation demand in the city is large. At present, buses carry 435,000 passengers a day on average, excluding free riding passengers such as the elderly, physically challenged, soldiers, and policemen who are exempted from paying the bus fare. Students who use season tickets are also excluded in the count. On the other hand, the estimated figure from the Household Interview Survey (HIS) carried out by the JICA Study Team in 2007 indicates that about 1.1 million daily passengers use buses. The minibus, large bus, and trolley bus together account for 35% of the total demand including walking or 48% of the total demand excluding walking.8 Bus service is provided by three (3) state-owned operators, nine (9) cooperatives, and 38 private operators which own a total of 1,725 units, of which 623 are large buses and 1,102 are minibuses. The characteristics of bus operation in the city are summarized as follows: The route structure needs improvement together with a clearer functional split between large buses and minibuses; Most buses are so old that roadworthiness is low. Only 77% of large buses and 41% of minibuses are currently in use; The load factor of large buses is low, compared to that of minibuses. Route structure and allocation of bus units need to be designed in a way that differences in load factor are narrowed; The operation of large buses is highly subsidized under the current fare level of 200Tg./trip. About 62% of the total revenue comes from subsidy. Meanwhile, minibus operation is almost free from subsidy, as seen in Table 6.5. This sharp contrast suggests there are opportunities to improve bus transportation services in the city. Table 6.5
No. of Routes 47 34 81
Bus Performance Indicators in Ulaanbaatar City, 2007

No. of Bus Units 483 446 929 Average/Bus/Day No. of Trips 15 16 15 Km. Run 192 219 203 No. of Passenger 357 151 258 Revenue/Bus/Day (000 tug) Fare 68 (37.8) 42 (94.2) Subsidy 112 (62.2) 3 (5.8) Total 180 (100%) 45 (100%) -
Bus Type
Large Minibus Total
Source: Transport Department, Ulaanbaatar City
Total transportation demand in the city is 3.4 million a day including 1 million (31% of the total) walking trips. 61
(2) Peoples Expectation on Public Transportation Improvement Peoples expectation on public transportation improvement is remarkably high. The types of public transportation modes which people desire in the future include standard bus (28.8%), underground rail (24%), elevated rail (13%), rapid bus (12%), and others, according to HIS results. (3) Opportunities for Mass Transit Development in Ulaanbaatar City Since Ulaanbaatar is relatively small and the income level is low, it would be costly to develop a rail-based mass transit system, especially one with an underground arrangement, judging from the experiences of other Asian cities. At the same time, however, there are a number of factors favoring such a project for Ulaanbaatar City, as follows: Fitting Urban Structure: The linear form of the citys main urban area, wherein business and commercial activities concentrate along Peace Avenue, enables it to become a catchment area for a mass transit line. With good feeder/ access transportation services, one line can cover most of the main urban area9 which is sandwiched by Ard Ayush Avenue on the north and Narny Zam on the south, both running parallel to Peace Avenue. This area can be within walking distances to a mass transit station, if ever one is developed. Good Public Transportation Ridership: At present 48% of the total demand for motorized urban transportation is met by buses; the figure increases to 61% if taxis are included. The high rate of public transportation demand is the potential main market for a modern mass transit system. If the system is attractive enough, it can also encourage car users to shift. Availability of Construction Space: In many cities, finding good construction space with minimal land acquisition and relocation of buildings/ facilities has always been a costly and problematic issue. However, in Ulaanbaatar City, the right of way for a mass transit system along Peace Avenue is already available due to its wide road space including the median and sidewalks. Consensus of the People: As is explicitly seen from the results of the HIS, the people expect much improvement in public transportation services through the introduction of a mass rapid transit system, such as an LRT/ MRT.
A preliminary study was thus carried out on the possible location of the LRT/MRT, and two (2) lines are proposed as follows (see Figure 6.8): Line 1 (Red Line): Line 1 will be constructed in an east-west direction along Peace Avenue. It will have a total length of 26.6km including a 5.0km underground section in the CBD and the remaining length as at-grade or elevated sections. A total of 17 stations are needed to be located, and Line 2 (Blue Line): Line 2 will be constructed in a north-south direction in the urban area and farther to connect to the airport. It will have a total length of 20.6km including
The area has about 44% of the population.
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a 3.8km underground section intersecting Line 1. A total of 12 stations are planned, including the central station, which is the interchange to/from Line 1. It is expected that further technical and developmental studies will be made on these two (2) lines. The initial findings on the viability of an LRT system are briefly explained below. There are no serious technical constraints in construction, engineering, and operation of the system; Future demand is affected by a number of factors including fare level, competition and complementation with bus services, as well as traffic congestion on mass transit corridors, among others. Fare is particularly crucial in terms of ridership and fare revenue. As is seen in Figure 6.10, if Line 1 is free, it is estimated that demand will reach 700,000 a day by 2030; demand will shrink to less than 100,000 when the fare is 500 Tg. or higher.10 The revenue-maximizing fare level is about 300 Tg. which will attract about 300,000 passengers a day; Line 1 will attract more passengers than Line 2, even if all proposed urban development projects are realized by 2030. Line 2 is estimated to have a ridership of roughly 65% that of Line 1; In order to enhance the effects of the LRT services, there is a need to undertake associated improvements such as: (a) Restructuring bus/minibus routes to enhance the overall public transportation network; (b) Improving connectivity between LRT and other modes including BRT, bus, minibus, taxi, car, and walking; (c) Establishing an equitable fare policy and efficient collection system (giving due consideration to affordability, use of smart cards, etc.); and (d) Effectively controlling traffic and managing cars and other vehicles along the LRT corridor. Considering the high investment needed for the mass transit system, the study will further carry out the following: (a) Survey of the areas along the proposed two (2) main LRT corridors (in terms of land use, main facilities, available space, related roads, etc.); (b) Demand analysis and forecast; (c) Selection of adequate mode/systems; (d) Determination of opportunities for integrated urban development; (e) Preliminary economic and financial evaluation; (f) Environmental impact analysis; and (g) Formulation of development strategies and investment program.
10
This analysis is still tentative but can provide a basis for discussion on the relationship between fare and ridership. 63
Figure 6.9
Preliminary Mass Transit Location Plan
Section At grade Length (km) Elevated Underground Total No. of Stations Source: JICA Study Team
Line 1 15.6 6.0 5.0 26.6 17
Line 2 10.6 6.2 3.8 20.6 12
Figure 6.10
Preliminary Estimate of Line 1 Ridership and Most Efficient Operation

No. of Pax Revenue
700,000 600,000 No. of Pax 500,000 400,000 300,000 200,000 100,000 0 Free 50 100 150 200 250 300 350 400 450 500 550 600 tg tg tg tg tg tg tg tg tg tg tg tg Flat Fare
50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0
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Revenue ($US)
4)
Road Development
(1) Current Situation In 2007, Ulaanbaatar City had a total of 439km of roads including 55km of state roads, 203km of city roads, 104km of district/special roads, and 78km of roads to satellite town/villages. In addition, there were about 100km of roads in residential areas and earth roads. Between 2000 and 2006, the road length increased by only 21km, as shown in Table 6.6.
Table 6.6 Road Length by Classification
(km) Classification State Road City Road District and Special Road Road to Satellite Towns and Villages Residential Area Road Earth Road Total Length Source: 2000 76.5 168.8 94.9 78.0 (67.3) (35.5) 418.2 2006 54.5 202.7 104.0 78.0 (67.3) (35.5) 439.1
JICA Study Team based on data from the MRTT and Ulaanbaatar City
Road development varies by area but faces a number of common problems which are briefly as follows: Although the basic arterial structure exists, especially in the city center which is provided with a well-articulated network with wide space and basic facilities, the quality of pavements and facilities is substandard, and missing links/ bottlenecks exist; Roads in suburban areas are poorly developed in terms of network connectivity, pavement quality, design standards, and facilities, including sidewalks and various traffic management facilities; and Commune roads both in the city center and elsewhere are not satisfactory; vis--vis the main roads and within areas/ blocks, they lack the appropriate configuration and proper facilities, such as smooth sidewalk, street lights, and parking space. Roads and facilities are also not adequately maintained.
In the long term, the strategy taken to develop roads and road transportation services will determine the urban structure. Therefore, the following strategies need to be duly taken into account: Develop roads as an integrated/ coordinated network with clear hierarchy and connectivity as well as adequate spacing; Improve the quality of road construction and maintenance to ensure smooth and safe travel and to help reduce vehicle operating cost and traffic accidents; and
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Provide adequate traffic management facilities and measures, including traffic signals, flyovers, pedestrian and safety facilities, parking, public transportation facilities, street/ traffic lights, among others.
Figure 6.11 Road Network in Ulaanbaatar City by Number of Lanes
(2) Road Development Strategies The road development strategy delineated in the 2030 plan aims to undertake short-term measures with a long-term perspective. They are more specifically as follows: Short-term Measures: 1. Mitigate traffic congestion through improved traffic management; 2. Eliminate traffic bottlenecks; 3. Rehabilitate/ Restore deteriorated road sections/ facilities; and 4. Improve traffic safety through better enforcement, campaign, and education, as well as provision of safety facilities. Medium-term Measures: 1. Strengthen road network through widening and new construction in compliance with the long-term network plan; 2. Improve traffic mobility along key corridors through comprehensive measures,
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including traffic management and facilities development; 3. Control roadside activities and land use; and 4. Provide adequate parking facilities and rules on parking, especially in the city center.
6.4
1)
Traffic Management and Safety

Current Issues
(1) Importance of Traffic Management Improvement Due to increasing traffic volumes and worsening traffic congestion, travel speeds have decreased (see Table 6.7). In 1998, average travel speeds on most sections of the main roads were about 3040 km/h, and in 2007 these decreased to 2025 km/h. A traffic management system is a crucial part of transportation improvement. Traffic management strategies should thus not contribute to worsening the situation.
Table 6.7
Vehicle Type
Comparison of Travel Speeds in 1998 and 2007

Route Direction East West East West South North East West East West East West Travel Speed (km/h) 1998 2007 41.1 42.4 30.3 29.0 40.9 24.5 42.3 41.2 35.7 31.9 24.1 24.1 25.4 25.7 21.3 20.9 19.1 20.3 31.7 19.7 21.4 20.1 16.8 18.0
Peace Avenue Khovagakchid-Ihk Toiruu Car IKH Toiruu Naray Zam UBIS-Yarmag Bus IBIS-Chingehei Source: JICA Study Team
(2) Traffic Signals Ulaanbaatar City has 48 signalized intersections, 22 of which have old signals, having been installed in the 1970s and 1980s. A study of the existing signals shows that they are not efficient. All are isolated fixed-time signals and there is no coordination between adjacent signals. Moreover, signal phase design and signal timing are not optimized, causing unnecessary delays to vehicles. The fundamental reason for the inefficient signal operation is the lack of signal design standards including signal warrant, phase sequence design, and calculation of signal timing parameters. There is a great room therefore to improve the traffic signaling system as a whole.
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Figure 6.12
Existing Signalized Intersections
Signal by JICA Project Signal by JICS Project Old Signal
10 13 22
Meanwhile, the problem of inadequate intersection geometry is aggravated by the lack of pavement markings which are virtually nonexistent in Ulaanbaatar City, with few exceptions like on Narny Zam, where markings are still visible and function to some extent. It is understandable that severe winter conditions are detrimental to pavement markings. Nonetheless, the improvement of pavement markings is urgent as with relatively small fund, it greatly helps regulate traffic flow particularly at intersections. (3) One-way Traffic, Turning Restrictions, and Other Regulations A one-way traffic system is applied to several streets in the CBD. The most effective is the one-way pair on the east and west sides of Sukhbaatar Square, wherein Sukhbaatar Street is one-way southbound from Juulchin to Peace Avenue, while Ikh Surguuli is one-way northbound from Peace Avenue to Zaluuchuud Street. This one-way pair has reduced congestion at the staggered intersection of Peace Avenue-Ikh Surguuli, although traffic jams still occur at the Peace Avenue-Sukhbaatar Street intersection. (4) Traffic Information Currently, no real-time traffic information and congestion information are available to road users. The introduction of an area traffic control (ATC) system to Ulaanbaatar City is being planned. The system will have vehicle detectors at 22 locations to collect traffic information. In addition, 26 sets of closed circuit television (CCTV) cameras will be installed to monitor traffic flow. The data and image from the detectors and cameras will serve as valuable traffic information. Once these devices are installed, real-time traffic surveillance can be done and the information can be fed to road users through two variable message signs (VMSs) to be installed at East Cross and West Cross intersections.
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(5) Traffic Discipline A no-priority rule exists at unsignalized intersections, and stop signs are not installed to indicate lower priority for crossing the road. Vehicles enter intersections on a first-come, first-served basis, compromising both efficiency and safety. At roundabouts, it is a common rule that vehicles already circulating inside have higher priority over vehicles entering them. The latter must give way to the former so that vehicles will not accumulate inside roundabouts and no congestion occurs. This rule is not observed at such locations as the Sapporo Roundabout. Another high-priority problem is the lack of protection for pedestrians who are not given priority at intersections and pedestrian crossings. Vehicles do not stop at pedestrian crossings even when there are pedestrians trying to cross them. At the same time, jaywalking is common among pedestrians. (6) Parking Management A rapid increase in the number of vehicles is expected to continue in the next several years. Such being the case, parking problems will persist or worsen unless radical parking management policies, strategies, and measures in the city are taken to address both parking demand and supply.
2)
Recommended Strategies
(1) Basic Strategies The importance of traffic management cannot be overemphasized, since without it costly projects would not generate the expected benefits. And while it is likely that the provision of infrastructure will not meet the fast-growing demand, traffic management strategies such as the following can greatly improve the situation: Strengthen traffic management and improve traffic flow by enforcing traffic rules/ regulations on road parking and use of road space, installing traffic signals for vehicles and pedestrians, etc.; Improve management of main transportation corridors by developing infrastructure/ facilities, managing traffic, and improving public transportation services to ensure smooth traffic flow and safety along the corridors; and Improve traffic management in the CBD by developing infrastructure, improving traffic circulation/ and parking control, improving pedestrian environment, etc.
In the medium- to long-term perspective, the city must introduce car demand management measures. Car ownership has been increasing and should not be discouraged because the people are also entitled to use cars during off-peak hours and weekends/ holidays. However, if the trend in car use continues as is seen today, it is certain that future congestion will become serious. Car users must therefore be made to shoulder the social, economic, and environmental costs that come with using cars in order to generate funds to counteract its negative effects and to facilitate a shift to public transportation. Car restraint measures include the following:
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Physical restrictions including on-road parking control, requirement for a garage certificate11, car use ban such as number coding and car-less days, and vehicle inspection; and Economic restrictions, including increased prices for purchasing and registering cars, expansion of pay parking areas, introduction of congestion pricing such as road pricing, area licensing scheme12, etc.
The undisciplined behavior of drivers and pedestrians is another main cause of traffic accidents, although poor road surface and the lack of traffic management measures/ facilities are also major contributors. At the same time, accident reporting is not systematically done. Hence the first important steps to improve the situation include the following: Strengthen the accident reporting system based on an improved accident database; Establish an analysis system available to all interested stakeholders; and Build capacities of related agencies for handling an accident data management system.
(2) Establishment of a Transportation Research Center Knowledge and experience in transportation and traffic engineering have not been accumulated in the country. Government staff both at the national and local levels have little opportunity to acquire knowledge in these fields. Seminars, workshops, and learning sessions are held on an ad hoc basis only and there is no systematic way to increase ones knowledge of and develop skills in traffic management. It is therefore proposed that a research institute be established to become the center of knowledge and experience in transportation technologies and traffic engineering. The main objectives of the research institute will be to engage in the following activities: Construct and maintain a transportation database, conduct modeling and planning; Undertake traffic engineering studies and design; and Promote human resource development.
11 12
Car ownership will not be permitted unless owners certify that they have parking spaces for them. Vehicle users who want to pass through congested road sections or designated areas, such as the CBD, have to pay for it.
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6.5
Comprehensive Urban Transportation Development

The urban transportation development program was formulated for both the short term and the long term. Figure 6.10 indicates the long-term plan targeting 2030. The following are proposed strategies and measures to realize a comprehensive urban transportation development.
1)
Rationales for Introducing Mass Transit System under a Compact City Scenario
The future traffic demand in the city is large. Total demand in terms of number of trips will increase by 2.4 times from 2.3 million to 5.5 million from 2007 to 2030, respectively. While the demand will increase only by 2.4 times, the impact on road traffic is large. The traffic analysis using STRADA indicates that the future traffic in terms of PCU-km and PCU-hour will increase by five (5) times and more then 10 times, respectively. This will reduce the average travel speed from 27 km/h in 2007 to 12 km/h by 2030. Similarly, the increase in transportation costs and emissions of pollutants will also be significant (see Table 6.8). In order to meet the transportation demand, an analysis was made on the impact of urban growth on urban transportation under the Trend and Compact City scenarios wherein the former represents a land-use pattern that follows the current development trend up to 2030, while the latter represents a compact land-use pattern proposed by the JICA Study Team. The results of the analysis are as follows (see Table 6.8): The Compact City Scenario shows a 15% increase in PCU-km and a 22% increase in PCU-hours. With this average travel speeds are faster by 10%; With regard to economic indicators, the Compact City Scenario shows about 20% reduction in transportation cost which comprise vehicle operating cost and travel time cost; and The effects on the environment of the Compact City Scenario are better compared to those of the Trend Scenario, i.e. about 17% and 18% lower NOX and CO2 emissions, respectively.
Further analysis was made on the impact of transportation network development with particular regard to LRT/BRT and expressway. The results are briefly as follows: The development of at-grade roads alone will not be able to accommodate future traffic demand because there is not much room for developing new roads or widening existing roads in urban centers and built-up areas where traffic demand concentrates; The development of two grade-separated mass transit lines, comprising LRT and BRT, can contribute to the improvement of the traffic situation significantly in the citys most critical areas. However, traffic congestion will remain on many sections of primary roads. This implies that while the introduction of the LRT and BRT will significantly improve the mobility of public transportation passengers, it will not contribute much to improving traffic congestion on roads, thereby requiring the enforcement of car restraint measures;
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Figure 6.13
Proposed Urban Transportation Network Development Plan for 2030
The development of expressways provides an opportunity to greatly improve the traffic situation. Under this scenario, both public and private transportation users can enjoy a high level of mobility and accessibility.
Table 6.8
Traffic Impact Analysis

2030 by scenario Ratio of compact scenario to "Trend" with roads only 0.99 0.85 0.78 1.09 0.8 0.78 0.79 0.83 0.81 with LRT/BRT 0.99 0.76 0.65 1.18 0.73 0.59 0.69 0.78 0.66 with LRT/BRT & expressway 0.99 0.77 0.54 1.42 0.65 0.5 0.6 0.74 0.6
Indicators No. of Trips/day (000) Pcu-km (000) Mobility Pcu-hr (000) Ave.speed (kph) VOC ($000/day) Economic TTC ($000/day) Total costs CO2 (ton/day) Source: JICA Study Team Environment NOx (ton/day)
2007 2,288 4,900 184 27 666 268 934 6 279
"Trend" "Compact" 5,486 25,929 2,189 12 6,689 2,886 9,575 46 2,074 5,454 22,049 1,700 13 5,350 2,239 7,590 39 1,685
2)
Overall Transportation Sector Strategies

In view of the above, the suggested strategies for competitive urban transportation development for the city are as follows: Promotion of Public Transportation-based City through Integrated Development: This overall development goal involves the following: To realize public transportation-based compact urban areas through the development of competitive public transportation systems and integrated urban developments. A public transportation system is composed of highly competitive primary mass transit corridors comprising LRT and/or BRT, secondary bus network, and other public transportation services which will be developed in proper hierarchy and connectivity with the primary network; To promote resettlement of households residing in sprawling ger areas to appropriate areas in and along the mass transit corridors through integrated development of underutilized public lands and space; and To develop an urban transportation network which meets both public and private transportation needs effectively at the same time. While private transportation use will be restricted in and along public transportation corridors, appropriate measures will be provided for off-peak hours, weekends, and peak business purposes.
Development of Mass Transit Corridors: Ulaanbaatar City, especially along Peace Avenue, is suited for the development of mass transit corridors in an effective manner with high cost-benefit performance,. Urban areas with relatively high density devel-
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oped in an east-west liner form can be effectively served by a mass transit line. If the urban areas are farther developed and redeveloped in integration with the mass transit system, performance of the system can be farther enhanced. A choice of a system between LRT and BRT depends on the level and features of demand. The study indicates that the demand along the corridor is sufficiently large to justify longer system, say LRT, particularly in the central and heavily developed areas, while the other areas need less capacity. It is concluded that a combination of LRT and BRT can best form the mass-transit function along the Peace Avenue. The second corridor is important in two ways : one to integrate central urban areas with the first corridor and two to integrate growing urban areas in the south-west and the north. Needless to say, urban development must be closely coordinated with the mass-transit development. The second corridor can also be a combination of LRT in the central area and BRT in other areas. As to type of structure, it is a view of the study team the system must be either elevated or underground in city centre and density developed urban areas due to following reasons: Although space is available along Peace Avenue, future traffic demand on this road will be much larger including private transport numbers. There are also a number of main roads which intersect with Peace Avenue; Segregated at-grade LRT/BRT will separate urban areas at both sides; A grade-separated mass transit system can significantly increase overall transport capacities of the corridor; A grade-separated mass transit system whether elevated or underground can facilitate integrated urban development at and around the stations. Especially underground system in the central part of the city can provide attractive opportunities for underground space development; and A grade-separated system can enhance the citys image.
Immediate Undertaking of Short-term Programs: Prior to any heavy investment in transport infrastructure, the city must attend to unfinished work in many areas such as the following: Strengthening of Road Network Management: This includes improved maintenance, rehabilitation of damaged infrastructure, removal of bottlenecks, and construction of missing links to improve connectivity and performance of the network; Strengthening of Traffic Management: This includes improvement of traffic circulation, parking control, and pedestrian environment to maximize available traffic capacity and enhance road transport environment. Inspection of road vehicles must be gradually strengthened to reduce emissions. Traffic safety must also be addressed through comprehensive measures; Improvement of Public Transport Services: Current public transport users must be provided with improved services through the introduction of new buses, rationalization of bus routes, improvement of bus operation and bus facilities, and
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provision of affordable fares, especially to the poor; and Enhancement of Public Awareness on Urban Transport Issues: Many existing transport problems facing the city can be attributed to low awareness among transport service providers and users. The city must thus take the initiative to enhance public awareness through formal education, regular campaign, and improved enforcement, among others.
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The Study on City Master Plan and Urban Development of Ulaanbaatar City (UBMPS) FINAL REPORT Vol.1: Summary
7.
HOUSING & LIVING CONDITIONS
7.1
Housing Development Issues

The following are the housing development issues tackled during the urban planning process in this study: Housing construction is currently booming, and the housing market is improving. However, construction costs are increasing which could affect the smooth implementation of the 40,000 units housing program; The banking sector has developed a financial scheme that provides housing loans for individuals who purchase apartment units. However, only high- and middle-income households earning over 450,000 Tg./month can avail themselves of the commercial banks housing loans. The majority of households, or low-income households, still have no access to housing loans and policy benefits; The Mongolian Housing Financing Corporation (MHFC) was established to promote the 40,000 units housing program in its capacity as a public corporation, but it has yet to perform its substantial financing function; Government efforts have focused on housing development (supply side) and there is still insufficient housing finance and low affordability by the people (demand side); There are no institutional systems providing low-cost houses for middle- and low-income households, households earning less than 300,000 Tg./month. This group comprises more or less 70% of the total households, based on the 2006 statistics and data from the JICA Study Teams survey. To date, the lack of effective development guidelines and legal framework for land and housing development has made it difficult to implement the 40,000 units housing program.
7.2
History of Government Housing Development Strategies and Programs

The history of housing policies in Mongolia is relatively new, starting with the Housing Finance Project conducted by the ADB in 2002 and the 40,000 units housing program supported by the GTZ in 2006, as shown in Figure 7.1. The 40,000 units housing program addresses five (5) strategies, namely: (a) New town development; (b) Densification of urban center; (c) Ger area improvement; (d) Housing market and finance enhancement; and (e) Promotion of the construction industry and construction
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materials production. These five strategies are all necessary and appropriate to develop the housing sector under a market economy. However, definite guidelines that would materialize these strategies have yet to be developed. In 2007, the Parliament passed a special resolution on air pollution mitigation, encouraging the construction of apartments for Ger area residents. In line with the same policy, the Ulaanbaatar City government officially presented in 2008 a detailed physical development plan highlighting four (4) new town projects, one (1) central area redevelopment project, and seven (7) Ger area improvement projects. These are shown in Figure 7.2 and Table 7.1. As of April 2008, the Government drafted the Program for developing the Ger Areas into apartment residential areas with priority given to three (3) areas for Phase I (20082012) and plans to provide about 24,500 housing units. Phase 2 targets the construction of 19,900 housing units between 2013 and 2015. Figure 7.1 History of Housing Policies, Strategies, and Programs in Mongolia
2002
UBMP-2020 (82% of HHs live in apartments with engineering infrastructure)
2006 40,000 Housing Units Program Strategy 1: New town development Strategy 2: Densification of urban center Strategy 3: Ger area improvement Strategy 4: Housing market and finance Strategy 5: Construction materials and capacity devt
2008 Detailed Development Plans 4 New Towns 1 central area 7 Ger areas Resolutions for mitigating air pollution from Ger areas (No. 27, No. 46, No. 218)
Program for Developing UB Ger Areas into Residential Apartment Area Phase 1 (2008-2012) 3 areas, 24,500 housing units, 89,400 population Phase 2 (2013-2015) 5 areas, 19,900 housing units, 103,000 population Phase 3 (2016-2020) 14 areas (not planned)
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Figure 7.2
Physical Development Plan Proposed by UB City1

1
See Table 7.1 for details.
Table 7.1
Planning Profiles for the Physical Development Plan Proposed by UB City

Project Area Area (ha) 27 93 61 235 210 145 700 771 170 180 450 120 920 1691 Population 10,500 40,000 8,600 36,400 42,500 14,550 152,550 42,000 30,000 50,000 45,000 167000 319,550 No. of HHs 2,470 9,100 2,043 9,106 10,000 3,600 13,200 36,319 10,200 7,250 10,262 10,750 38,462 74,781 Estimated Cost (mil. US$) 131.2 577.1 70.9 275.8 497.2 183.8 1,735.8 525.9 387.1 537.9 551.8 2,002.7 3,804.5
Residential area around Radio& TV Authority 3 7th Micro district 10 Dari Ekh Residential area Ger Area 8 14th Khoroolol Redevelopment 7 7th Khoroolol 9 Denjiin 1000 6 Zaisan Sub total Buyant-Ukhaa residential 5 area (Nisekh) Residential area of Bayangoliin 1 Am New Town Development 2 New City Center Urgah Naran Residential area 12 (Nogoon Zoori) Sub total TOTAL Source: UB City Government 4
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7.3
Current Housing Policies and Institutions

In 2002 commercial banks started to provide housing loans to middle and upper low-income groups, with funding from Asian Development Bank (ADB)-assisted Housing Finance Project loan. They have also started to provide housing loans in 2007 for households with monthly incomes of over 450,000 Tg. with funds from the 40,000-unit housing program. The Mongolian Housing Finance Corporation (MHFC) was established in 2006 through the initiative of then MCUD, MOF, and UB City as a public finance corporation to help implement the 40,000-unit housing program. However, a study of the mainstream housing policies show that current housing policies dont focus on vulnerable groups such as the poor and low-income groups, revealing a bias for the supply side (i.e., housing development) rather than the demand side (i.e., housing finance). Figure 7.3 shows the income groups covered by the current housing policies both on the supply and demand sides. At present, private developers are the major players on the housing supply side, while the commercial banks are the major players on the housing demand side. Figure 7.3
Income Group
Current Housing Policy Framework in Mongolia

Housing Development (Supply Side)
Private Sector Consumption tax and Import tax exemption; 20% of houses provided for war veterans without developers profits; 2% of houses donated to th
Housing Finance (Demand Side)
High Income (700,000TG/M~) Mongolian Housing Finance Corporation (MHFC) + Private Sector
Middle Income (300,000~700,000 TG/M)
Mongolian Housing Finance Corporation (MHFC) + Commercial Bank
Commercial Bank + Mortgage Corporation (MC)
ADB: Housing finance project; Japan Fund: for Poverty Reduction
Low Income (63,000~300,000TG/M)
Poor People ( ~63,000TG/M)
Self-Help (Partially Supported by Donor, NGO and Community Based Organizations (CBO))
NGO Fund
Less attention has been paid to the housing provision for low-income groups. The following are findings that underlie this fact: ADB and NGOs provide financial assistance to vulnerable groups through housing development funds and micro-credit finance; but these activities are not part of mainstream housing policies. ADBs Housing Finance Project was completed in 2007; The central government tries to help private developers in promoting housing development through such actions as exemptions on consumption of and import taxes on construction materials. However, these benefits dont filter down to the vulnerable groups which suffer from increases in housing prices;
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On the other hand, the central government obliges private developers to provide 20% of housing stock to war veterans without gain and to donate 2% to the same group. However, even with such policy riders, there are no housing policies for low-income groups; Due to financial problems, the MHFC, which is expected to function as a provider of public housing and finance provider, it has little to boast in terms of achievements in mass housing. The MHFC is eligible to get benefits in the development of national and city-owned lands gratis and to use national bonds pooled in commercial banks as financial resources for both housing construction and housing loans. Compared with private developers, the MHFC is obliged to provide low-priced houses to households with incomes of over 450,000 TG/month (middle-income class). However, the recent increases in construction costs make it difficult to supply low-cost houses amounting to just US$ 350, which is the regulated construction cost by the MHFC. Enhancement of its institutional capacity as a public corporation is inevitable to help realize housing supply for low-income groups; Mongolian Mortgage Corporation (MIK) was established in 2007 by the Bank of Mongolia and 10 commercial banks to set up a long-term framework on housing loan resources and to develop a housing market and stabilize long-term financial resources. The impact of the MIK has yet to be felt, but the legal enhancement of this mortgage system is, at present, a major issue in the current housing policies in Mongolia; and Most low-income groups living in Ger areas are forced to build their own houses and improve their living conditions by themselves. They have no access to housing loans. The ADB and NGOs assist them in formulating community-based organizations (CBOs) and in providing community mortgage loans for community development. So far, seven (7) CBOs have been created in UB City but this approach is not yet enough. Therefore, it is important to promote community-led efforts at improving the living environment.
7.4
Proposed Housing Policies and Institutions

To meet increasing housing demand, housing supply needs to be strengthened in the long term. To meet this goal, the following policies are proposed: (1) Establishment of New Legal System to Facilitate Housing Development
1) Housing Development System: Supply Side
The national government has enacted several basic laws related to housing and apartment housing development as described in the Housing Law of Mongolia, such as the Housing Privatization Law and Law on the property of shared ownership of residential buildings and the legal status of the Condominium Association. However, various other relevant laws and regulations have to be established or amended to make them realistic with current socio-economic conditions. For example, there is no legal system for the promotion of housing development in the Ger areas, as well as the rebuilding of old apartments and new town development in a planned manner. Guidelines for community improvement and housing provision for low income groups are particularly important. This issue will be further discussed in
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Chapter 11. (2) Promotion of Domestic Construction Industries and Materials Production
The increasing cost of construction materials is a vital factor that influences housing policies. The prices of imported construction materials are stable except for cement and reinforced iron rods. The percentage of imported and homemade construction materials is shown in Table 7.2. Table 7.2 Percentage of Imported and Homemade Construction Materials
Construction materials Wall materials Glass Window frame and door Roof materials Water pipeline Paint Concrete and brick Electric cable Precast concrete Percentage of imported and homemade 100% homemade 100% imported 100% homemade 10% homemade, 90% imported 30% produced by Chinese and Korean plants in Mongolia. 100% imported for joint material of pipeline 100% imported 100% homemade 100% imported In the past, produced, but the plant is closed at present.
Source: Building Material Manufacturers Association of Mongolia
To attain price stability, the necessary policies needed to stabilize construction costs are summarized as follows: Policy level support for the private sector is required to construct plants for cement and reinforced iron rods which influence construction costs. Special incentives should be provided for start-ups. An economical way of transporting and supplying construction materials, such as cement and bricks, etc., has to be studied and introduced. The distribution system should be rationalized through governmental intervention, if necessary. A production system that will make the cost of construction materials cheaper has to be developed. For instance, while processed cement and insulation materials are manufactured together as one insulation block, the production of precast concrete is needed. Encourage the growth of construction materials industries and stabilize the domestic supply market (this is being currently supported by the GTZ).
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(3)
Establishment of Social Housing Corporation (SHC)
The Social Housing Corporation (SHC) not only provides houses for low- and middle-income groups, but is also an agency that promotes comprehensive housing development projects through land and infrastructure development, the redevelopment of old apartment houses, land readjustment of Ger areas, and the cross-subsidy of development incomes from the middle to the low income groups, etc. Another of its important functions is to intervene in market distortions due to speculations on materials costs and profits. This is significant since the housing and real estate markets are not always perfect and suffer distortion due to disinformation and speculations. Governmental intervention through the provision of housing units at proper market prices is an effective market remedy, (see Figure 7.4). The provision of social housing is a public duty that is not incumbent only upon the private sector. Taking into account its objectives and mandate, the MHFC could be reorganized into a Social Housing Corporation, or a national agency, because its stocks are held by UB City (51%), MCUD (24.5%), and MOF (24.5%). As one of its targets, the role of SHC is to provide at least 10% of the total housing stock for low-cost housing, and this has reference to the housing policies in other east or south Asian countries. The provision of rental houses is also expected to act as temporary accommodations for immigrants and students in UB City and for seasonal workers. Financial sources for the SHC could be the Mongolia Development Fund, Housing Development Fund, and National Pension Fund, besides the National Bond Fund pooled in commercial banks. Figure 7.4 Social Housing Corporation Model
Speculative Price
Speculative Profit
Market Distortion
Market Price
Profit
Speculative Cost Increase
- Technology - Subsidy Cost Cutting

Administrative Costs
Profit
Cost
Cost Cost Cost
Affordable Price for Low Income HH
Normal Market
Speculative Market
Social Housing Corporation Model
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(4)
Organization of a Community & Local Partnership Housing Association
To aid self-help housing construction among low income households and the poor who dont have access to housing loans, a Community & Local Partnership Housing Association is recommended as a joint initiative of MRTCUD (then MCUD), UB City, Building Material Manufacturers Association of Mongolia, Architect and Construction Companys Association, NGO, and Community Representatives. This organization is an advisory institution that will assist the poor in the construction of self-help housing through community mortgage programs. A good model in this regard would be the Community Organizations Development Institute (CODI) program of Thailand. (5) Enhancement of Peoples House Purchasing Capacity
Without stable employment opportunities, the poors ability to purchase houses cannot improve, so they remain in Ger settlements even though living conditions there are bad. Needless to say, the housing policy should address housing affordability. Table 7.3 summarizes major recommended policies focusing on the enhancement of the supply side of the housing market. Table 7.3 Expected Roles of Proposed Organizations for Housing Development
Roles and Functions To construct low-cost houses to cover 10% of total housing units To perform a land development function for new towns and Ger areas, through land acquisition, land readjustment and urban redevelopment Social Housing Corporation To sale housing units for low income group with financial arrangement To provide rental housing for a variety of housing demands To arrange internal cross subsidy for low income group To introduce house purchasers formal Job-opportunities Community and Local Partnership Housing Association To facilitate self-help housing construction and improvement of living Conditions such as sanitation and utilities To provide appropriate technical advice and introduce low price and environment-friendly construction materials To construct quality housing units for high and middle income groups Private Sector To participate in Social Housing Development in a PPP scheme, with public sectors special incentives such as provision of land areas with basic infrastructures, permission of utility connection, etc.
Organization
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2) Housing Finance System (Demand Side)

The housing financing system needs to be further enhanced with due consideration to affordability for middle- and low-income groups. The following are recommendations to attain this goal: (1) Provision of Long-term and Low-interest Rate Housing Loans
A long-term financing system providing housing loans with low interest rates needs to be developed for all middle- and low-income households whose monthly income is over 300,000Tg./month. This can be done through the following aspects: Legalization of the Mortgage Lawand provision of escrow account (down payment subsidy) in commercial banks, and Enhancement of a Secondary Mortgage Market through the MIKs functions. A government subsidy system should also be considered to fulfill the gaps between prevailing financial conditions and the affordability levels of the target groups. For this purpose, two (2) schemes are possible: subsidy on interest or subsidy on down payments, as shown in Figure 7.5. Since interest rates are variable, they affect borrowers repayment schedules. The interest subsidy scheme could be more preferable for middle and low-income households. Figure 7.5 Interest/Down Payment Subsidy Model
Subsidy Interest Payment Market Price Interest Payment Interest Payment
Profit
Housing Loan Principal Payment
Principal Payment
Principal Payment
Cost
Own Fund Own Fund Own Fund Own Fund Subsidy
Purchase Price
Finance
Repayment
(Market Level)
Interest Subsidy Model
Down Payment Subsidy Model
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(2)
Establishment of Housing Development Financing Institution
With the importance of promoting housing development especially for the low and middle income groups in Mongolia, the establishment of a Housing Development Financing Institute (HDFI), as a financing institution for managing not only the Housing Development Fund1 but also other financial resources, should urgently be studied. The HDFI itself has a financial function as a mortgage corporation and will have an important role in the provision of long-term and low-interest rate loans for low and middle income groups. For the moment, the commercial bank and the MIK will handle this role, but it would be difficult if they will function as a substitute to the HDFI in meeting housing demand for low income groups. The following are the possible funding sources in the operation of the HDFI: Mongolian Development Fund: based on the tax revenue from the mining industry; National Pension Fund: its legally prohibited to utilize this Tg.100 billion fund for other purposes in Mongolia; however, it could be utilized for to meet the goals of socialized housing and for housing development in general; and Housing Development Mutual Fund is a membership system or public association that provides housing funds for its members. This system is popular in the Philippines and other Asian countries, and its one of the possibilities that could be examined in Mongolia. The financing department of the MHFC will be incorporated into the HDFI as a national agency and expected to take an important role for the finance of low cost houses. (3) Introduction of Community Organizations Development Initiatives
In order to provide community mortgage finance to help the poor who avail themselves of housing loans, a Community Organization Development Institute (CODI) should be introduced, with reference to the Thai model. Thailand established a CODI network in 2000 to promote community development in the slum areas. CODI takes a community network-driven bottom-up approach by providing community mortgage loans and subsidies to aid self-help housing construction, improve living environments, and train informal workers to engage in formal jobs. This approach has been effective in fulfilling shortages in the traditional top-down approach by the National Housing Authority (NHA) of Thailand. The following are the major achievements of CODI: Enabled the poor to build self-help housing and promote the improvement of their living environment through the organization of community groups and cooperatives; Enabled communities to influence city development through the enhancement of community networks, which resulted in the establishment of support systems for the national and local governments; and
1
In the Housing Law of Mongolia, the article to enable the establishment of Housing Development Fund (HDF) had been incorporated for the purpose of housing and infrastructure development, and the financial resources and the disbursement procedure was precisely stipulated. However, the national government declared th this article invalid by the Law on Government Ad Hoc Fund approved on 29 June 2006.
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Enabled community organizations to keep up with every phase of development dynamically by taking a major pro-active role. (4) Utilization of CDM (Clean Development Mechanism) for Ger Area Environmental Improvement At present, ambient air pollution during the winter season is one of the most serious problems. It has been studied that the major source of air pollution are the individual houses located in Ger areas, and this form of pollution constitutes 90% of the total ambient pollution. Although the central government has placed importance in facilitating apartment provision for Ger residents, a short-term program should be explored to mitigate the pollution. In this sense, three (3) measures need to attain an integrated solution: (a) Fuel innovation, (b) Improved stove dissemination; and (c) Energy-efficient housing materials (insulations) provision for self-help housing. A model CDM may be utilized to implement these three measures, simply because these policies will be effective in mitigating total CO2 emissions which otherwise would increase if not properly addressed. Table 7.4 Roles and Functions of Proposed Housing Financing Organizations
Organization Housing Development Financing Institution Roles and Functions To finance with long-term and low interest rate housing loan for low income group by raising Housing Construction Fund by the Government To function as a Secondary Mortgage Corporation To be established jointly with Ministry of Social Welfare and Labor Community Organizations Development Institute (CODI) To formulate Saving Groups based on community development plans To support to make Self-Help Housing Development Plan, with small infrastructure development and job opportunity development. To provide with subsidies or community mortgage loans to Improve living environment as well as housing construction. To provide long-term housing loans for middle and high income groups in cooperation with MIK (Secondary Mortgage Cooperation) To establish escrow account (for down-payment subsidy or buy-down system), focusing on all middle income households over 300,000TG/Month To enable commercial banks to provide secured long-term housing loans by improving investment environment and market exploitation of secondary mortgage bond under forth-coming Mortgage Law
Commercial Bank
Secondary Mortgage Corporation (MIK)
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3) Proposed Housing Policy Framework

Major policy issues on housing development, as discussed above, are summarized in a policy framework in Figure 7.6. Essential is the integrated policy mix that covers all the segments of income levels toward substantial housing improvement. Both the top-down and bottom-up approaches are also institutionalized in housing policies. Figure 7.6 Proposed Housing Policy Framework
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7.5
Housing Demand Forecasts

Estimates on future housing demand were based on population projections. Figure 7.7 shows an analytical flow of the housing demand forecast for 2020 and 2030. The housing statistics of UB City and the Household Interview Survey (HIS) conducted by the JICA Study Team were used as the base data for this forecast.
1) Methodology for Housing Demand Forecasts
2) Current Housing Stock and Preferences for Housing Change

(1) Characteristics of Current Housing Stock (2007)
A look into the housing structure shows that 39.2% of total housing stock comprises apartment houses. Substandard houses, including simple houses without infrastructure (33.8%), Ger houses (25.5%), and Homeless (0.7%), account for about 132,000 units with a share of 60% of the total stock (see Table 7.5). Table 7.5 Current Structure of Housing Stocks by Type in 2007
Existing Units Apartment Mid-rise High-rise Detached with Infra Simple house w/o infra Ger Homeless Total
Source: UB City
share(%) 39.2% 27.4% 11.7% 0.9% 33.8% 25.5% 0.7% 100.0%
86,091 60,264 25,827 1,957 74,283 56,101 1,460 219,892
(2)
Peoples Preferences to Move, Rebuild, or Improve
Preferences among residents showed that a total of 54% of apartment residents prefer to move (7.4%), rebuild (3.1%) or improve (42.1%) their residential apartments. On the other hand, 67% of Ger residents answered they will move (9.2%), rebuild (16.8%) and/or improve (40.8%) their Ger houses. Only a third of Ger residents were satisfied with their current living conditions (see Table 7.6).
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Figure 7.7 Analytical Flow of Housing Demand Forecasts for 2020 and 2030
Future Household Size
Housing Demand for Apartment Houses (Mid-Rise)
Natural Increase
Increase of Nuclear Families
Housing Demand for Apartment Houses (High-Rise)
Housing Demand for De-
Projection of Future Population (2020, 2030)
New Housing Units to be Required from Increase of Families
Total Housing Units to be additionally required
tached Houses with Infra. & Utilities
Housing Demand for Simple Houses without Infra. & Utilities
Social Increase
Number of Households for Social Increase
Number of Households Desiring to Rebuild by Housing Type
Number of Households Desiring to Move by Housing Type
Ger Settlements
Ratio Desiring to
Future Household Size
Rebuild or Move Houses
Based on Household Interview Survey Source: JICA Study Team Existing Stock of Houses by Type
Univ. Students Entrants from Countries
No. of Students with new independent household
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The Study on City Master Plan and Urban Development of Ulaanbaatar City (UBMPS) Final Report Vol.1: Summary
Table 7.6
Peoples Preference to Move, Rebuild or Improve Current Houses

Apartment Residnets 130 54 740 833 1,757 (%) 7.4% 3.1% 42.1% 47.4% 100.0% Ger Resident 251 459 1,115 908 2,733 (%) 9.2% 16.8% 40.8% 33.2% 100.0%
Want to Move Want to Rebuild Want to Improve No Needs Total
Notes: Based on Home Interview Survey (HIS) conducted by JICA Study Team in 2007.
(3)
Desired Patterns of Housing Changes
Table 7.7 indicates the peoples future changes in their housing conditions by housing type. For those living in mid-rise apartments, 35% of them prefer transferring to other mid-rise apartments, 25% to high-rise apartments, and 40% to detached houses with infrastructure and utilities. This assumption was used as basis for the housing demand forecast by housing type. Table 7.7 Desired Housing Pattern for Rebuilding and New Construction upto 2030
g g
Apartment Mid-rise Apartment (Mid-rise) Apartment (High-rise) Detached w Infra Present Simple house w/o Infra. Ger Homeless Immigarat Househod (2008-2020) Immigarat Househod (2021-2030) 35% 25% 45% 40% 40% 40% 35% 40% Apartment High-rise 25% 25% 10% 20% 15% 15% 15% 20%
p
Future Detached with Infra 40% 50% 45% 40% 45% 45% 40% 40% Simple house w/o Infra. 0% 0% 0% 0% 0% 0% 5% 0% Ger 0% 0% 0% 0% 0% 0% 5% 0% Total 100% 100% 100% 100% 100% 100% 100% 100%
Notes: Based on Home Interview Survey (HIS) conducted by JICA Study Team in 2007.
3) Forecast of Housing Construction Demand

Estimates show that there is a housing demand of about 128,700 for newly constructed houses between 2007 and 2020, and more than 178,800 between 2007 and 2030. These include demand for re-building. Total housing demand was estimated at 207,834 from 2007 to 2020, and 347,640 from 2007 to 2030, as shown in Table 7.8. The demand for apartment houses is 64,337 of newly constructed houses from 2007 to 2020, and 102,532 of newly constructed houses, from 2007 to 2030. Along with re-building demand, the total apartment demand was estimated at 109,842 from 2007 to 2020, and 199,106 from 2007 to 2030. More than half of the total demand consists of apartment houses.
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Table 7.8
( g
Housing Units to be Rebuilt and Constructed by Housing Type

) 2007 - 2020
Re-built Newly Constructed Total Re-built
2007 - 2030
Newly Constructed Total
Apartment
Apartment (Mid-rise) Apartment (High-rise)
45,505
30,856 14,649
64,337
45,036 19,301
109,842
75,891 33,950
96,574
65,409 31,165
102,532
69,856 32,676
199,106
135,265 63,841
Detached with Infra Simple house w/o infra Ger

Total Source: JICA Study Team
33,656 0 0 79,160
51,469 6,434 6,434 128,673
85,125 6,434 6,434 207,834
72,243 0 0 168,817
74,360 1,287 643 178,822
146,603 1,287 643 347,640
4) Housing Stock by Housing Type by 2020 and 2030

Total housing stock in UB City will approximate be 348,534 by 2020, and 444,340 by 2030, as summarized in Table 7.9. More than half of the units are apartment houses. Table 7.9 Projections of Housing Stocks by Housing Type in 2020 and 2030
2020 2007 Apartment (Mid-rise)
Apartment (Mid-rise) Apartment (High-rise)
2030
Total 184,442
127,191 57,250
Unchanged 74,600
51,300 23,300
Rebuilt & Constructed 109,842

75,891 33,950
Unchanged 65,600
43,400 22,200
Rebuilt & Constructed 199,106

135,265 63,841
Total 264,706
178,665 86,041
86,091
60,264 25,827
Detached with Infra Simple house w/o infra Ger Others Total
1,957 74,283 56,101 1,460 219,892
1,600 41,300 22,900 300 140,700
85,125 6,434 6,434 0 207,834
86,725 47,734 29,334 300 348,534
1,200 25,900 3,900 100 96,700
146,603 1,287 643 0 347,640
147,803 27,187 4,543 100 444,340
Figures 7.8 and 7.9 indicate changes in housing stock by type from 2007 up to 2020 and 2030. Ger houses accounted for about 56,100 as of 2007, and the number will dramatically decrease to about 29,300 by 2020 and 4,500 by2030. The trend can be regarded as a definite housing policy target.
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Figure 7.8
450,000 400,000 350,000 300,000 250,000
Forecast of Housing Stocks by Type in 2020 & 2030

4,540 27,190
Homeless Ger Simple house w/o infra
29,330 47,730
147,800
Detached with Infra Apartment (High-rise) Apartment (Mid-rise)
86,720
200,000 150,000
86,040
56,100 57,250 74,280
100,000 50,000 0
1,960 25,830 127,190 60,260
178,670
2007
2020
2030
Figure 7.9
200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 2007
Change in Housing Unit by Type
Apartment (Mid-rise) Apartment (High-rise) Detached with Infra Simple house w/o infra Ger
2020
2030
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5) Housing Gaps between Demand and Supply by 2020 and 2030

The housing demand projections show that approximately 200,000 housing units will be required up to 2020. This implies that around 16,000 to 17,000 housing units will be needed annually. At present, Ulaanbaatar has a very limited supply of housing units. In 2007 it was more or less 6,000 - 7,000 housing units, including apartments and detached houses. The gap between housing demand and supply will be 7,000 units in 2008. If not strategically narrowed, this gap will exponentially grow in the long term. This means that housing prices will continuously increase annually due to strong pressures brought about by supply shortages. Assuming that the construction sector will grow at a higher rate than the average of GRDP, or by 7% p.a., the gap will decrease in the long run and will balance out by 2030, as shown in Figure 7.10. Needless to say, the growth of the construction sector should be encouraged in tandem with the enhancement of local capacities to produce basic construction materials, as well as the rationalization of the transport and distribution systems for construction materials. Figure 7.10
Accum. Housing Demand 13.8 28.5 49.0 61.9 76.3 90.9 105.8 121.0 138.0 155.4 173.2 191.4 207.8 219.1 232.4 246.0 259.8 273.8 288.0 302.6 317.3 332.3 347.6
Economic Growth 6.8% 5.3% 5.3% 5.3% 5.0%
Anticipated Housing Gap between Demand and Supply
Accum. Supply Balance Capacity 6.7 14.1 22.1 30.6 39.8 49.5 60.0 71.1 83.0 95.8 109.4 124.0 139.5 156.2 174.0 193.0 213.3 235.0 258.1 282.8 309.0 336.9 366.7
Construction Sector 8.8% 6.9% 6.9% 6.9% 6.5%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
-7.0 -14.5 -27.0 -31.2 -36.5 -41.4 -45.9 -49.9 -55.0 -59.6 -63.8 -67.5 -68.3 -62.9 -58.5 -53.0 -46.5 -38.8 -29.9 -19.8 -8.3 4.6 19.0
400.0 400.0 350.0 350.0 300.0 300.0 250.0 250.0 200.0 200.0 150.0 150.0 100.0 100.0 50.0 50.0 0.0 0.0 -50.0 -50.0 -100.0 -100.0 Accum. Housing Demand Accum. Housing Demand Accum. Supply Capacity Accum. Supply Capacity Balance Balance
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2017 2017
2018 2018
2019 2019
2020 2020
2021 2021
2022 2022
2023 2023
2024 2024
2025 2025
2026 2026
2027 2027
2028 2028
-2010 2010-2015 2015-2020 2020-2025 2025-2030
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2030 2030
2016 2016
2029 2029
7.6
Affordable Housing Models

The housing market in Ulaanbaatar City in 2007, as shown in Figure 7.11, reveals that apartment unit prices on average exceeded as much as US$1,000 per m2, which is an increase of 30%, compared with the prices in the previous year. Such price inflations mean that apartment units can only be purchased by upper-middle and high income groups, and remains unaffordable to lower income groups. This situation is prone to easy speculation that will push housing prices further up in the market. Household income distribution patterns were examined based on the Household Interview Survey in 2007 as shown in Figure 7.12. The average household income was computed at around Tg. 250,000 per month and households with less than Tg. 300,000 per month share almost 70% of the total. It is obvious that majority of households with less than Tg.300,000 per month will not be able to afford paying high amounts such as US$1,000 per m2 , or Tg.1,170,000 per m2.
Figure 7.11
3500 3000 2500 2000 1500 1000 500 0
nte rna ti o na lA p Kh Amart m aa eric e n nt St Cr Pala an D ate ic c e us e H nj De Ap ot pa art el rt m L Jig 14 m en hag t uu t S va Mh dis ent rG to su on tri ran Ce re ren H ct nt dA are N ou ral pa a ya se Po rtm st Erapar mj av en Of el Atm fi c ppen At by e A artt ex th l 's1 e pa me C rtm nt be on en d a ti n t St pa enta An ate rtm l om en Ho De a t b tel pa rtm yT en D JaB tS rga to r Ave A Kho lan p Ar zagaart j Jur iun a m j b pe Ma Go ileg.K artnt ste lom h men r F t C Bil t oo it gee Mu dA yT ng un pa ow r n JaZavy Motmen Ne rga a A n H t xt lan pa ous to Ap rtm e I nd Fo p e ian ur J art nt Em seas iguu men ba on r G t ss s G r a y A a nd pa rd Odrtm ens Or dynent Th ifla H eP ar Sta mb otho k V r ui n Re iew Apar lding ge Re tm n s e Ch Br cy R iden nt ri id e c Ch stop ge A sidene ris her par ce top de tm he G ent r d ru e ben G Mo Gre Ma Krube n P en rga hos n Vli d J en la G u th A a rj au p rta se art m A m Ro T part ent m ya us n l C hig eAt as a n tle pa om Ap rtm a art en t Pa H men rk u At Vie ree no Er el Br w R buil ma To dg es di n i p F e A ide g n Ro loor part ce ya a m l C part ent as me t nt Orgle Ap An il T art om ow me a n H nt ou s
1) Housing Market and Household Income Distribution
Apartment Unit Sales Prices in 2007 (US$/m2)

2007$/m2
Average Level
Source: Quoted from market information and data at Web-sites and arranged by JICA Study Team
Figure 7.12
Ho us eI
Household Income Distribution Pattern in Ulaanbaatar City in 2007

2,000 1,800 1,600 1,400 No. of HHs 1,200 1,000 800 600 400 200 0
90 0, 00 0 >1 ,0 00 ,0 00 <1 00 ,0 00 10 0, 00 020 0, 00 030 0, 00 040 0, 00 050 0, 00 060 0, 00 070 0, 00 080 0, 00 0-
100.0% 90.0% 80.0% 70.0% 60.0%
Average : 250,000 Tg/Month
50.0% 40.0% 30.0% 20.0% 10.0% 0.0%
No. of HHs
Percentile
Source: Household Interview Survey, 2007, JICA Study Team
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2) Affordable Models for Average Households

A model of a housing purchase plan by an average household with an income of 250,000 Tg./month was studied. It was assumed that the minimum floor area requirement was 35 m2 and two options of apartment units are available in the hypothetical market, i.e. House A, costing Tg.21.2 million (550 US$/ m2); and House B, costing Tg.15.4 million (400 US$/ m2). It was likewise assumed that 70% of the purchase cost will be covered by a housing loan and 30% as cash down payment given the currently available loan conditions such as a 1.0 % monthly interest rate and a 10-year repayment period. Under the above assumptions, in order to purchase House A, the average family has to pay Tg.129,000 for the monthly loan repayment, and should have an income of at least Tg. 322,500 per month, if the loan repayment should be less than 40% of their total income. The average family cannot afford to purchase House A. On the other hand, with the provision of a subsidy that will lessen the interest rate to 0.7% per month (instead of 1.0%) and a 15-year repayment period (instead of 10 years), the average household could purchase House B, as the required income is computed at Tg.265,000 per month. As a result, the affordable housing model requires a unit cost of 400 US$/ m2 with a 35 m2 floor area. Figure 7.13 Affordable Housing Models for Average Households in Ulaanbaatar City
House A
Housing Market Floor Area per Household Unit Price of Housing Unit Purchasing Plan Housing Purchase Price Down Payment Mortgage Loan Loan Conditions Interest Rate Repayment Period Requirements (Repayment & Income) Monthly Repayment Necessary Income
House B
35 m2 400 US$/m2
35 m2 550 US$/m2
21,175,000 Tg 6,352,000 Tg (30%) 14,823,000 Tg (70%) 1.0% per Month 10 yrs 129,000 Tg/Month 322,500 Tg/Month
15,400,000 Tg 4,620,000 Tg (30%) 10,780,000 Tg (70%) 0.70% per Month 15 yrs 106,000 Tg/Month 265,000 Tg/Month
3)
Need for Low Cost Housing Supply

In December 2008, the Mongolian government launched its new policy on 100,000 Housing Units Construction Program which is based on more or less 80% achievement rate of the 40,000 Housing Unit Construction Program. It was announced that this target can be attained in the coming 4 years or within the term of the current administration. However, in realty the supply capacity of housing units in Ulaanbaatar was very limited in 2007 up to the present, with, more or less, 6,000 - 7,000 housing units per year, including apartments and detached houses, as mentioned in Section 8.4. Therefore, the achievement of this target would be very difficult without drastic government intervention.
95
Based on the foregoing housing analysis, it is clear that the provision of low cost houses is extremely important so that the majority of the middle and low income households can be provided with housing. To this end, some crucial measures should be taken with a particular focus on the importance of government intervention. Organizational measures, such as the establishment of the Social Housing Corporation and Housing Development Financing Institution (HDFI), and social measures to enhance community-based activities are proposed in Figure7.6. In addition to the measures proposed in Section 7.4, the following government interventions should be further explored:
Encourage the growth of construction industries and construction materials production, by providing further incentives for FDIs and soft loans for start-ups; Appropriate special budgets to subsidize R&D activities to invent new locally made construction materials and low-cost housing structures; Guide and work jointly with the private sector to develop affordable low cost housing units and to facilitate housing area development with social housing units; Establish the Social Housing Corporation and prepare a 20,000 housing units construction program for lower middle and low income groups; and Encourage the Social Housing Corporation to provide rental houses.
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8.
LIVING CONDITIONS IMPROVEMENT
8.1
Planning Issues, Visions and Strategies

Figure 8.1 shows the important concerns among Ger residents such as health, hygiene, and safety in the improvement of their living conditions. Figure 8.1
25.0%
1) Issues of Ger Area Improvement
Important Aspects of Basic Urban Services in Ger area
20.0%
15.0%
10.0%
5.0%
0.0%
at er
Source: Household Interview Survey 2007 by JICA Study Team
In general, present resettlement into apartment areas lack feasibility and affordability among Ger residents. In addition, various ongoing projects in the Ger areas mainly aim at short-term improvements of living conditions and lack long-term strategies and planning. To improve the urban environments in the Ger areas in a comprehensive and sustainable manner, it is necessary to develop a holistic vision and strategy applicable through feasible measures. The following is a summary of the main issues prevailing in Ger areas: Mitigation of negative environmental impacts: Uncontrolled expansion of Ger areas cause negative environmental impacts such as air pollution, smog from the burning of coal during winter, soil pollution from pit latrines without sewerage treatment, etc. These negative impacts affect not only the Ger areas but also the whole Ulaanbaatar City. They also cause diseases. Land use: Extensive and inefficient land use, which occurs when Ger areas expand, spoil and damage the natural environment. Settlements in dangerous areas such as riverbeds and hilly terrain both threaten lives and properties. Infrastructure and public services: There are few infrastructure and utility services in the Ger areas. Though water supply through kiosks has been improved by donors, these improvements are just symptomatic and short-term treatments. A long-term fundamental solution on infrastructure development for the Ger areas is lacking.
R Pu oa bl d ic Tr af Tr fic an s M an ag Pu em bl ic in fo La Te nd le co an m d ho us in g Se cu rit A y ir qu al ity R ec re A at dm io n in se rv ic e
er ag e El ec tr ic ity H ea lth Ed uc at io n G ar ba ge
Se w
97
Living conditions: Due the lack of basic housing necessities, insufficient and inconvenient access to public facilities, degraded environment, etc. the living conditions in the Ger areas do not allow residents to enjoy urban living. This is being exacerbated by the lack of effective policy support from the government. Though residents in the Ger areas worry about their living conditions and other concerns such as their financial conditions, safety, their childrens future, etc., they cannot afford to improve their plight through their own initiatives. Housing: Of the 60% of Ulaanbaatar residents who live in the Ger areas, half of them (30% of total) live inside Gers and the other half (30% of total) live in simple houses, mostly self-built wooden houses lacking the necessary utilities. Both Gers and simple houses are inadequate urban dwellings in terms of environment, sanitation, safety, and an ideal townscape.
2) Vision and Objectives

Generally, the two (2) elements of safety and health are basic concepts in the harmonization of neighboring environments. In the diversification of urban facilities and activities, the two (2) other elements of convenience and amenity are adopted. In summary, an ideal vision of improved living conditions is a situation wherein all urban residents live under healthy housing conditions with basic urban services and in a safe and environment-friendly manner. To achieve this vision, the following objectives are proposed:
Promote appropriate land use and mitigate environmental damages; Ensure effective development of infrastructure and urban utilities; Comprehensive improvement of living conditions; Develop legal and institutional mechanisms to improve living conditions and housing development; and Raise peoples awareness of urban lifestyles, conditions, initiative, and community participation.
3) Strategies for Ger Area Improvement

To achieve the proposed target, a comprehensive strategy is needed which includes planning mechanisms, physical improvement, institutional arrangements, socio-economic improvement, etc. The following six (6) strategies are proposed: (a) Define living conditions standards; (b) Propose a proper zoning system and clear resettlement mechanisms; (c) Provide basic utilities through the expansion of central infrastructure networks or the development of a local cluster infrastructure system; (d) Supply various types of houses; (e) Establish various planning methodologies to provide proper urban facilities and services; and (f) Promote self-help improvement and support from the government.
98
8.2
Planning Methodologies for Living Conditions Improvement

The potential for future development of the Ger areas will mostly depend on infrastructure connectivity, especially on a central heating system. Depending on infrastructure accessibility, the Ger areas are categorized into three (see Figure 8.2): (a) Non-urbanization Area: Ger settlements located outside the urbanization promotion boundary are forced to move and relocate to safer areas inside the boundary. Infrastructure and utilities provision are not prioritized, or provided, in these areas. (b) Low-rise Residential Units in Middle and Peri-urban Areas: A comprehensive living conditions improvement project based on community-based approaches and facilitated through institutional mechanisms involving Land Readjustment in association with infrastructure development and social housing provision by the public sector. Heating and sewerage facilities are provided through a local cluster system and water supply is centralized. (c) High- and Midrise Residential Units in Central and Middle Areas: The promotion of high- and midrise apartments and urban redevelopment projects connected to a central infrastructure network. Figure 8.2 Basic Strategy for Ger Area Improvement
Non-urbanization Area (out of urbanization boundary): enforcement of resettlement and no public services provided
1) Zoning Mechanism for Controlling Ger Area Expansion
Urbanization Promotion boundary
Central supply network
Local cluster network
Low-rise Residential Area (Middle and peri-urban Ger area): Comprehensive living condition improvement (land readjustment, cluster infrastructure development, social housing provision, etc.)
Central network
Water
Heating / Sewerage
High& Mid-rise Residential Area (Central& middle Ger area): high-mid rise apartment and Urban redevelopment connected with central infrastructure networks
The basic requisites or orientations for the improvement and development of a number of residential areas, including the Ger areas, are proposed in Figure 8.3. Projects are categorized into three (3) types: (a) Urban redevelopment for on-site improvement in central apartment areas; (b) Land readjustment for on-site improvement in the Ger areas; and (c) New town development for the creation of new settlements.
99
Figure 8.3
Development Orientations of Residential Areas in UB City
2) Planning Standards for the Improvement of Living Conditions

To develop strategies on the improvement of living conditions, as well as attain policy targets, it is necessary to establish clear planning standards and define the responsibilities of both the government and the citizenry. Two (2) standards will be set: (a) Minimum Standard to secure the required minimum living conditions, and (b) Planning Standard, to achieve the desired living conditions. To satisfy both the minimum and planning standards, the public sector will play an essential role, especially in the Ger areas where public service provision is limited. The government has to be responsible for providing the necessary public services to secure the minimum standard (see Figure 8.4). Standards are proposed for housing, basic utilities, and public urban facilities (see Table 8.1). Existing standards on public facilities should be applied not only in the apartment areas but also in the Ger areas. For example, the minimum standard of 5m2/person for the Parks and Green Areas is based on the existing standard, and the basic standard of 20m2/person is from the target of the UBMP-2020.
100
Figure 8.4
Level of living condition
Basic Concepts of Living Conditions Standards
Planning Standard
Civil minimum
Minimum Standard
Responsibility of public service
Time Present 2010 2020-2030
Table 8.1
Facilities Housing Housing type Water supply
Proposed Policy Targets and Standards

Policy Targets Minimum Standard (Civil Minimum)
2 Living area: 10 m /person
Basic Standard (Planning Targets) Living area: 12 m2/person
Sewerage
Utilities
Electricity Heating
All households have shelters. All households have access to tap water at the same cost. Domestic and industrial wastewater is discharged after treatment complying with environmental standards. All households have access to electricity. All households can use clean heating system. All households can dispose of solid waste after treatment.
Solid waste Kindergarten Elementary & Secondary Schools
Facilities
Clinics and/or hospitals for primary health care Parks & green areas Source: JICA Study Team
All households can access these facilities within the service catchment area designated for each service.
Houses with access to central water pipeline: 200 2 m /person/day 1. Connect to central sewerage network. Use shield-type pit latrines 2. Connect to local cluster 2 (ECOSAN) sewerage network. 3. Treated by septic tanks. All households are connected to the electric power distribution network. 1. Connect to central heatUse improved stoves or ing pipeline. briquettes 2. Connect to local cluster heating network. Establish a garbage colTreatment and recycling syslection system per comtem munity. Size: 100 children per 1000 persons Service catchment area: r = 300-500m 2 Area: 30-40 m /child Size: 200 pupils per 1000 persons Service catchment area: r = 500-750m Area: 18-50 m2/pupil Size: 9 beds per 1000 persons Service catchment area: r = 1-2km Area: 60-300 m2/bed 5 m2/person 20 m2/person Houses without tap water: 25 m2/person/day
In terms of costs and customs, it is not realistic to treat solid waste onsite through latrine pits. The establishment of a solid waste collection system, wherein solid waste is utilized as fertilizer, or treated and disposed of at garbage dumps, etc., is proposed.
101
2) Neighborhood Residential Unit Planning

A Neighborhood Residential Unit is a basic urban planning unit with the development of community facilities such as kindergarten and elementary schools, as well as parks in the residential areas (see Figure 8.5). Basically, the service area of 1 school is the basic unit and consists of a 7,000 - 10,000 population. In UB City, the Khoroo-based Neighborhood Residential Unit can be applied for plans on living conditions improvements, especially in the Ger areas. This concept gives residents access to public facilities and amenities in the neighborhood and enhances a school-centered community. Based on a two-shift system of classes and the capacity of complex schools (for 6 - 17 year-old students), an 18,00020,000 population residing within approximately 100ha (1km x 1km) is an average Neighborhood Residential Unit (180 - 200 persons/ha). The central facility of this unit is the school with service coverage of approximately 500m and where students go to on foot. Figure 8.5
Present Ger area
Image of a Neighborhood Residential Unit

App. 1km
Pedestrian road
Childrens park
Kindergarten Neighborhood park K-12 school

Future residential area
Community center
Commercial center
District road Kindergarten
Trunk road
3) Affordable Housing Development in the Ger Areas

Though many Ger area residents expect to move into apartments or live in private detached houses with amenities such as a garden, garage, etc. the affordability of such proprietary dreams should be taken into account. In theory, housing development is basically invested in by residents, but if residents are burdened with such difficulties as poverty, joblessness, etc., the public sector should provide technical and financial support under appropriate housing policies (e.g. social housing development, rental housing development, community fund, etc.).
102
In terms of economic and environmental efficiency, the collective housing model such as the townhouse is recommended (see Figure 8.6). Townhouses are low-rise houses in a row. Several homes (10 - 20) can be planned as such and developed into a community. The land is either shared by homeowners or owned by each household. The advantages of a townhouse are: (a) land, infrastructure, and utilities are integrated; (b) construction and maintenance costs are cheaper than in detached houses; and (c) and they attain heat efficiency since walls are common. Figure 8.6 Images of Future Housing Types
8.3
Proposed Community-driven Implementation Mechanisms

It will be necessary to develop community-driven implementation mechanisms, in the development of a residential area plan that is acceptable to Ger residents as well as technically and financially feasible,. To appropriately implement residential development projects that will improve living conditions through a community-driven mechanism, the main issues involved are the following: (a) Formulation of a Neighborhood Area Development Plan (NADEP); (b) Consensus building; (c) Financial feasibility; and (d) institutional mechanism. The involvement of three (3) main stakeholders, i.e. residents, the government, and the private sector (developers), into the whole planning and implementation process of NADEP is crucial (see Figure 8.7). This participatory system aims to build consensus among residents, secure the smooth approval of development plans by government institutions, and ensure financial sustainability. Figure 8.8 shows the overall process of the proposed community-driven neighborhood area development from preparation up to implementation. It also presents stakeholders roles and functions.
1) Planning and Implementation Mechanism for NADEP
103
Figure 8.7
Planning Process and Stakeholders of the NADEP

5. Implementation Stage
1. Preparatory Stage: Field survey by residential organization
Residents
4. Budgeting Stage: implementation of project
Governments
Private Sectors
2. Planning Stage: discussion by Committee of NADEP
3. Approval Stage
2) Contents of the Neighborhood Area Development Plan (NADEP)

Compared to the city Master Plan, the planning elements of the Neighborhood Area Development Plan or NADEP are detailed and specific, as shown in Table 8.2. The contents of the NADEP are flexibly designed according to residents opinions on how detailed they want their future plans to be. Table 8.2
Category Development orientation Detailed development plan
Contents of the NADEP

Contents Future image of area Conceptual map Location, width Location, capacity Type of facility, location, capacity Type of housing, number of stories Regulation of building usage, environmental control, preservation of heritage, etc.
Plan Vision Future conceptual zoning plan Land-use plan Road network Arterial road, distributor road, colplan lector road Urban utility Water, sewerage, heating, electricplan ity, solid waste Public facility School, kindergarten, hospital, plan clinic, community center, park, etc. Housing plan Apartment, townhouse, detached house, etc. Other guidelines/regulations
104
The Study on City Master Plan and Urban Development of Ulaanbaatar City (UBMPS) Draft Final Report MAIN TEXT Vol.1
Figure 8.8 Planning Process of NADEP and Project Implementation for Ger Area Development (1) Preparatory (2) Planning (3) Approval (4) Budgeting (5) Implementation
Planning of NADEP
Finding Issue & sharing Vision
Basic Concept & Schematic Plan
Basic Plan of NADEP
Phasing of Projects
Detailed Project Implementation Plan
Planning & Implementation Body
Management
Project Fund
Development
Establishment of Preparatory Committee for NADEP

Request for support
Establishment of Committee for NADEP
Establishment of Management Board of NADEP
SPV area A SPV area B
Subsidy
SPV
UB City Government
Establishment of Advisory Com1) mittee
Approval under UB City Master Plan

Dispatch Development permission
Budget allocation
Community finance (as bridge finance)
Relevant Institutional Mechanism
Under Cooperative Law
Development Contribution (land or finance) & Development Permission under Urban Development Law
Community Finance System under Mortgage Loan Law
Finance
Donors fund for planning (fees for survey, personnel, etc.) under Ger Area Development Program by MRTCUD and UB City
Budget for project Implementation from 2) (a) sales fee of reserved land of LR project , (b) subsidy from governments, (c) development contribution
Note: 1) UB City government, MRTCUD, consultants, lawyers, etc. Source: JICA Study Team
2) UB City commits purchase reserved lands which are unsold for a certain period.
105
3) Introduction of Land Readjustment Project

The land readjustment system lies at the other end of the spectrum and differs from individual urban development. It has unique characteristics such as: (a) Comprehensive urban development methods; (b) Fair distribution of development charges and development benefits; and (c) Preservation of community life and lifestyles, as illustrated in Figure 8.9. Land Readjustment is a method that re-plots land lots and develops infrastructure and public facilities on the readjusted lots. In general, but especially in Japan, original land shapes are mainly preserved, while needed partial land for roads and public facilities are contributed to the development project. Procedures for land and asset assessment are detailed and vital, but complicated and takes a long time. Among the various land readjustment mechanisms, Land Pooling (LP) is a simple process which can be applicable in the Ger areas. The process is as follows: 1) All stakeholders reach a consensus on land pooling for land readjustment; 2) Land plots are readjusted to secure public lands for the provision of infrastructure and utilities; and 3) Residents move back to the newly plotted land. Reserved lands can either be used for public purposes, put up for sale, etc. Participation and consensus building among residents are indispensable factors in the success of the land pooling system. In this context, Land Pooling may be applied to the Ger areas where land values are relatively not high compared with central apartment areas.
4) Land and Housing Value Assessment Systems

In the application of land readjustment (including land pooling) project in the Ger areas, a pivotal issue is how to assess land and immovable assets to which all stakeholders will be amenable. This issue is one of the preliminary points in carrying out the NADEP. However, currently Ulaanbaatar has no official rational land valuation system. To accelerate urban development projects, including land readjustment, it is essential to establish a legal valuation system first. Under the current circumstances, the establishment of a Weighting and Rating System for lands and assets especially for the Ger areas is proposed through community participation. This system has three (3) steps; 1) Weighing land values by comparing land lots in the project area; 2) Rating each land value through scores; and 3) Assessing the value, as shown in Figure 8.11. The following are the general characteristics of this system:
It establishes a land and asset valuation committee that includes experts, lawyers, the land management department of UB City, and representatives of residents; It defines assessment indicators through clear common standards; and It establishes an assessment system relative to each project area to build consensus among affected stakeholders especially land and asset owners in the area.
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Figure 8.9
Basic Concepts and Approaches of Land Readjustment
Figure 8.10
Processes of Land Adjustment and Land Pooling

Land Pooling
Land Readjustment
Land Pooling
Cleared land (for replotting and infrastructure development)
Land Lot of Residential Distributor Road Apartments Public School Park
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Figure 8.11
Weighting and Rating System for Land and Asset Valuation

Project Area Distributor road
STEP 1: Weighting of land value relative to other land values in the project area
Area5 (x0.7)
Area2 (x0.8)
Categorize homogeneous land lots for relative land value assessment Give advantage to land lots in front of trunk road or intersection Define weighting by each land lot (1.0 is the maximum)
Area1 (x1.0)
Area4 (x0.7) Area3 (x1.0)

Trunk road
STEP 2: Rating of each land value with scores Area4
Mr. A (500m2) Mr. D (300 m 2)
Allocate score to each land of households by multiplying weighting and share of present land area Area3
Mr. B (300 m 2) Mr. E (700m2)
Mr. C (700m2) Mr. F (500m2)
STEP 3: Assessment of Value
Define indicators for housing and other asset assessment among stakeholders Define rank (weighting) of indicators, and score/ point for each indicator (Maximum points of rank: A=20, B=10, C=5)
8.4
Proposed Detailed Plans on Model Ger Areas in Unur and Dambadarjaa

The main objectives of the pilot detailed plans on model Ger areas in Unur and Dambadarjaa are to examine the planning measures and institutional mechanisms proposed in the Master Plan, then verify their feasibility and applicability through a community participatory approach. In these model projects, the tried methods are: (a) neighborhood area development planning, and (b) land readjustment. To formulate the detailed plans that complies and complement with the proposed Master Plan, as well as build consensus among stakeholders, the JICA Study Team conducted a series of meetings with stakeholders including district, Khoroo authorities, and the community residents. In the planning and discussion processes with stakeholders, a number of outcomes were achieved, and these included: (a) Sharing future development visions; (b) Proposal on appropriate infrastructures and housing development; (c) Proposal on necessary institutional and financial mechanisms; and (d) Participatory process toward consensus-building and feasibility. At the end of the model projects, concept plans were developed, which are expected to be approved as NADEP by Ulaanbaatar City (see Figure 8.12 and 8.13). Figure 8.12 Proposed Concept Plan for Dambadarjaa
Vision: Dambadarjaa, in the near future, will be an ecological, historical, and culturally friendly residential area where residents will plan for the community and improve its living conditions by themselves.
1) Objectives and Outcomes
Public facilities Commercial Zone Residential Zone Environmental Zone
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Figure 8.13
Proposed Concept Plan for Unur

Vision: Unur in the future will be a comfortable and convenient residential area where residents will enjoy studying, working and playing amid a natural environment.
Public facilities Commercial Zone Residential Zone Environmental Zone
2) Pilot Project Discussions

On-site discussions were made through regarding the proposed community-driven implementation mechanism. Most of the residents insisted on discussing land ownership, size, and the settlement of their present houses. They worried about being evicted, resettled, or their lands becoming smaller. The following were the major findings from the discussions:
Residents expect that the government will develop infrastructure and construct apartments, which explains their inherent passive attitude; Residents understand the basic concept of land readjustment and land pooling, but they dont fully trust that the value of their land would increase after the project. They expect to monitor pilot LR projects in other areas and apply their finding to their areas; Most of the residents have no financial capacities to build new houses by themselves; so they expect that a housing development project is integrated with the LR project; and Residents welcome government officials to participate in the planning process and expect further studies on urban planning through practical methods.
In general, it is necessary to identify stakeholders and relevant agencies to facilitate and implement the NADEP and other urban development projects (e.g. LR project) with financial and institutional feasibilities. Community meetings are a good opportunity for consensus- building and role sharing. They help achieve expected outcomes and create consensus about the next developmental step.
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9.
URBAN UTILITIES & ENVIRONMENT
9.1
Common Issues on Urban Utilities

This chapter looks into the development directions for urban utilities such as water supply, sewerage system, electricity and heating system, and environment-related subsectors such as solid waste management, air pollution control, and disaster management in Ulaanbaatar City. In the utility infrastructure, some common issues were identified as follows: Physical Improvement: Expansion of the capacity in association with rehabilitation and/or replacement of decrepit facilities. Management Improvement: Improvement of the management system in association with reforms of existing tariff structures, taking into account their affordability and the feasibility of sustainable service provision. Some Public Private Partnership (PPP) models need to be explored for good management practices.
Figure 9.1 Concept of Cluster System

Central supply system
Technical System: The centralized services of utilities, especially for heating system and sewerage system, will be hard in reaching residents in suburban areas during rapid urbanization or continued urban sprawling. The expansion of the capacity of the centralized system will become less feasible both technically and financially. Therefore, it is proposed that a number of local cluster sub-systems should back up the central system and be incorporated into the overall integrated system in Ulaanbaatar City (see Figure 9.1). Environmental Issues: Ambient air pollution during winter is a recurrent environmental problem. Short-term solutions should be sought through a multi-sector approach. Likewise, disaster management needs the enlistment of the 3 Es, i.e., Environmental measures, Enforcement measures and Engineering measures. This is the case for solid waste management as well. Overall Coverage and Spatial Structure: In consideration of spatial urbanization toward 2030, an overall coverage concept of infrastructures and utility services is proposed as shown in Figure 9.2.
Cluster system
Merits of Local Cluster Network System Small initial cost Time-saving implementation Possible management by private sector
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Figure 9.2
Overall Coverage of Infrastructure and Utilities
9.2
Water Supply
Water is a key lifeline that Ulaanbaatar City needs for it to continuously function as a capital city through another millennium. Water resources should be conserved with the highest priority. Its importance is not comparable with other resources. The planning issues on water are summarized in the following:
1) Planning Issues
Water capacity enhancement; New water source development; Improvement and/or rehabilitation of water supply facilities and equipment; and Demand-side management to water saving.
2) Planning Target
The planning target is laid forth in the goal: That all Ulaanbaatar citizens can readily access potable piped water for the long term.
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3) Demand-Supply Balance
Water demand projections were made based on consumption assumptions of two housing type cases, as shown in Table 9.1. The future housing demand by type is forecasted in Chapter 7. Case 1 involves a higher demand case wherein 230 liters/person/day (l/prs/d) is employed, as in the Water and Wastewater Master Plan 2020. Case 2 is a lower demand case through strong demand management aimed at 150 l/prs/d for apartment dwellers, which is the per-capita demand target of the water authority. Table 9.1
Case 1 (higher case) Apartment Detached with central system Ger and simple house Total demand Case 2 (lower case) Apartment Detached with central system Ger and simple house Total demand Source: USUG and JICA Study Team
(litters/person/day) (litters/person/day) (litters/person/day) (m3/day) (litters/person/day) (litters/person/day) (litters/person/day) (m3/day)
Assumed Per-capita Water Consumption Volume

Unit 2007 230 80 7.2 154,500 230 80 7.2 154,500 2010 230 88 25 225,000 218 85 25 217,100 2020 230 142 25 351,300 181 113 25 294,900 2030 230 230 25 510,700 150 150 25 367,700
Current water supply capacities are as follows:
Average capacity: Design capacity:
161,000 m3/day 241,000 m3/day (with 4 water sources)
Figure 9.3 shows the demand-supply gap in water supply in the long term. Water demand will increase along with urbanization and the improvement of housing conditions. It will reach 351,300 m3/day by2020 and 510,700 m3/day by 2030 for the higher demand case, and 294,900 m3/day by 2020 and 367,700 m3/day by 2030 for the lower demand case. Obviously, the current capacity of 241,000 m3/day will be reached sooner than 2012 and will mean a shortage by 2015. By 2030, the gap between capacity and demand will account for 269,700 m3/day. This means that additional capacity should be developed up to 2030 for the higher case, and by 126,700 m3/day for the lower case. A well-thought out demand management may defer the critical point by some years; however it is crucial that new water resources should be developed as soon as possible to address future demand.
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Figure 9.3 Demand-Supply Balance in Water Supply

(m3/day) 600,000
Gap in 2030 High case: 269,700 m3/d 3/ Low Case: 126,700 m d

510,700
500,000
400,000
Water Demand
351,300
425,300 367,700 331,100
300,000 225,000 217,100 154,500 100,000
285,800 257,800
294,900
200,000
241,000 m3/d Existing Supply Capacity

Case 1: 150 l/d Case 2: 230 l/d
0 2007 2010 2015 2020 2025 2030
4) Requirements on Water Supply

(1) Development Requirements
Three areas of development should be carried out to stave off a future water crisis in Ulaanbaatar City, These are: capacity expansion, system improvement, and water tariff reforms:
Capacity Expansion: Two measures should be taken at once, i.e. expansion of existing water sources and new source development. There are three options on new source development, as shown below. However, despite its historical argument a decision has yet to be made on this. On volume of demand, the issue is not a matter of selection but the pursuit of all options in the long term.
Biokombinat, Lower Biokombinat (90,000 m3/day) (WWWMP 2020); Lower Nalaikh (40,000 m3/day) (Gachuurt) (1995 JICA Study); and Dam at Tuul and Terelj River (45,000~225,000 m3/day).
System Improvement: Demand management needs to be encouraged in association with the rehabilitation of aging pumps, reservoirs, and distribution pipelines. Water leakage should be minimized. The ongoing metering project should be further expanded to include an additional 55,000 households. It has been shown that once a water meter is installed a subscribers consumption drastically drops to 180 l/pax/day. This project also substantially contributes to revenue increases. Water Tariff Reform: The current tariff structure needs to be reformed on the following aspects: 1) The standard of fairness, and 2) The feasibility of the entire water business.
At present, there is a large difference in water charges between kiosk water and
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piped water. Charges on kiosk water should be lessened and piped water charges could be raised. A cross-subsidy system can be formulated by taking both these measures into consideration. It is ideal for the entire water business to be financially feasible in the long run. Even though the recovery of initial investments through tariff revenue could be difficult, operation and maintenance costs should at least be recoverable through revenues. Based on this concept, the current tariff structure should be re-assessed and reformed. Otherwise, the water business will deteriorate and its operations will be adversely affected by business downturns. Investment Requirements
(2)
At least a total of US$ 326 million will be required, out of which the Water Master Plan 2020 (WWWMP), including new water source development, is proposed at about US$ 290 million up to 2020. In addition, the following important projects should be financed: Lower Nalaikh: US$ 29 million; Metering: US$ 6.5 million; and Development of other water sources and administrative improvements.
9.3
Sewerage
The existing sewerage system has deteriorated, and urgent improvement is urgently required to keep Ulaanbaatar City environmentally sound and healthy. A well-functioning sewerage system is needed to protect underground water sources from possible contamination. Three (3) issues should be considered in this sense: Enhancement of treatment capacity Proper treatment of industrial wastewater Improvement of sanitation in Ger areas, summer house areas and tourist camps
1) Planning Issues
2) Planning Target
The planning target is for domestic and industrial wastewater to be treated 100% before being discharged into rivers. A new industrial wastewater treatment system, through a cluster pattern, should be developed and separated from the domestic system.
It is assumed that the volume of wastewater for treatment is almost equal to the water supplied, as shown in Table 9.2.
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Table 9.2
Projection of Wastewater Volume to be Treated

(m3/day) 2007 2010 222.5 217.1 2020 351.3 294.9 2030 510.7 367.7
Wastewater to be treated (Higher case) Wastewater to be treated (Lower case) Source: JICA Study Team
154.5 154.5
Existing treatment capacities of domestic wastewater in the central wastewater treatment plant (WWTP) are the following:
Operation: Design capacity:
177,500 m3/day, and 230,000 m3/day.
In practice, the central WWTP cannot be operated to its full capacity without rehabilitating or improving the entire system. The balance between operating capacity and demand will almost be 173,000 m3/day by 2020 and 333,200 m3/day by 2030 for the higher case, and 117,400 m3/day by 2020 and 190,200 m3/day by 2030 for the lower case. Which means that in the higher case, the capacity needs to be doubled by 2020. On industrial wastewater treatment, it has been noted that all treatment plants have been privatized, which means almost un-functional in the treatment.
4) Requirements for a Sewerage System

(1) Development Requirements There are four development requirements for the sewerage system, as follows:
Capacity expansion of the total treatment system: The total treatment capacity needs to be enlarged to cover the entire urbanized area. The central WWTP alone cannot cover this requirement. Therefore, the following components should be developed in an integrated manner:
Rehabilitation and expansion of the central WWTP; Development of several new medium-scale wastewater treatment plants to form a local cluster wastewater treatment system; and, Expansion of existing collectors and development of new collectors to create a total system.
Individual Treatment Systems: In suburban areas, including summer house areas and tourist camps, where a sewerage system is not provided, the introduction of individual local sanitation systems should be promoted, such as:
Septic tanks (individual to groups of households); and Shield-type pit latrines.
Development of an Industrial Wastewater Treatment System: There are four (4) in-
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dustrial promotion zones in Ulaanbaatar City. The Environmental Law should stipulate that each factory should be responsible for the primary treatment of its discharged wastewater. Then a secondary treatment plant should be developed in each zone, while a tertiary (or final) treatment plant should be connected to the secondary plants, as conceptualized in Figure 9.4. Structural Reform: Rules and regulations related to wastewater treatment needs to be reviewed, and this should include the review of the Environmental Law, privatization of industrial wastewater treatment, and delineation of the responsibilities of the Ulaanbaatar Water Supply and Sewerage Authority (USUG). The examination of a regulation imposing charges on wastewater treatment service as a form of water surcharge is likewise proposed. (2) Investment Requirements
The rehabilitation and capacity improvement of the existing central WWTP and collector systems will cost US$320 million, while the industrial wastewater treatment system will require US$120 million. Figure 9.4 Concept of a Collective Industrial Wastewater Treatment System
C D
Domes tic Sewerage Plant Domes tic Sewerage Line (Ex isting and P Industrial Was tewater Treatm ent Plant (Final Treatm ent) Industrial Was tewater Treatm ent Plant (Intermediate Treatment) Industrial Was tewater Pipe Line
9.4
Power Supply
To meet future demand the electricity supply system needs to be improved along with the distribution network from the sub-stations. A new power generation plant is required as well to increase capacities and enhance the heating system. A suitable location of the new plant (the 5th plant) is turning out to be a great issue, because of its corresponding environmental impacts. The introduction of new power sources other than coal is another planning concern in the long
1) Planning Issues
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term. Nuclear power deserves to be looked into in terms of its technical and financial feasibilities. However, human resources in the area of nuclear science and engineering will have to be developed for the long term in consideration of such energy innovation.
2) Planning Target
Since electric power is an indispensable commodity for social and economic activities, connection to a central power system by 100% of the households, businesses, and industries should be the target. Another strategy to do this is the introduction of environment-friendly power sources through PPP schemes.
Based on economic and population forecasts as well as Ulaanbaatars GRDP, electric power demand was projected for 2020 and 2030. The results are summarized in Table 9.3. Current power supply capacities are tabulated in Table 9.4. Current total working capacity in UB is about the 555 MW. If the current capacity is maintained for a while, capacity will be reached by 2016. On paper, Thermal Power Station-2 (TPS-2) is due for retirement in several years time while TPS-3 will retire by 2015. Taking into account the retirement schedules of these aging plants, a new power plant is required even before 2015. Table 9.3 Projection of Future Demand for Electric Power
2007 Total (mill. kWh/yr) Load (MW) Source: JICA Study Team 1,321 274 2010 1,649 334 2020 3,462 702 2030 6,551 1,328
A capacity of 896 MW is expected to be installed up to 2030. This means that two more TPS-4s should be developed by that year. Table 9.4 Current Supply Capacities of Electric Power Plants (June 2008)
Design Capacity (MWt) 21.5* 148.0 540.0 709.5 48.0 28.8* 786.3 Working Capacity (MWt) 17.6 105.1 432.0 554.7 38.6 21.0 614.3
Thermal Power Station UB TPS-2 UB TPS3 UB TPS-4 UB Total Darkhan Erdenet Total Source: JICA Study Team
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Figure 9.5
Electric Power Demand-Supply Gap

Peak Load (mW)
1,400 1,328 1,200 1,000 800 702 600 482 400 274 200 2007 2010 2015 2020 2025 2030 334
Existing Working Capacity Working Capacity with retirement of PTS 2 & 3 Power Demand
986
Gap in 2030 896 mW
4) Requirements for Electric Power Supply System

Improvement of the entire power supply system is the most crucial requirement. This will include the following necessities: (a) Capacity enlargement to meet the increasing demand; (b) Rehabilitation of sub-stations to improve supply efficiency; and (c) Expansion of cables to extend service coverage. For the new power plant, new power sources other than coal should be explored to mitigate negative environmental impacts. For this purpose, the pursuit of a PPP scheme is recommended. The existing tariff structure should be reformed in order to make the entire power business more feasible and thereby lessen government subsidies. Power supply at politically influenced or set prices will not promote energy-saving behavior. Rational pricing policies should be applied.
9.5
Heating System
Development of the heating system involves crucial planning issues relevant to issues on air pollution, as well as electric power generation. Due to the spread of urbanization, or urban sprawl, the supply of heating will become more difficult in reaching residents in the suburban areas. From an engineering standpoint, capacity expansion is also a crucial issue that should be addressed. The following is a summary of the issues involved in heating system development:
1) Planning Issues
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Capacity expansion; Expansion of heating pipelines; Development of a local cluster system to supplement the centralized system; and Air pollution reduction.
2) Planning Target
The planning target is to form an integrated Clean Heating System for all with the following aspects: (a) A central heating system connected to power plants, (b) local cluster systems, and (c) individual heating systems.
Additional residential demand from 2007 was projected, as shown in Table 9.5. Table 9.5 Projection of Residential Heating Demand from 2007
(Unit: Gcal/h) 2007 Additional Demand Source: JICA Study Team 0 2010 287 2015 749 2020 1,178 2025 1,590 2030 1,979
The following are the existing supply capacities:
Installed capacity: Operating capacity: Connecting capacity: Reserve:
1,695 Gcal/h 1,594 Gcal/h 1,449 Gcal/h 246.3 Gcal/h
The difference between the projected demand and existing reserve refers to the additional heat load that would be needed in the future. The result is illustrated in Figure 9.6. Heating calorie with about 1,733 Gcal/h will be an additional requirement by 2030. Figure 9.6 Demand-Supply Gaps in Heating for Residential Use
Net increase of Heat Load for Residents
(Gcal/h)
2,200 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 0 2007 2010 2015 2020 2025 2030 287 744 1,979
Additional Demand
1,178
1,590
Gap in 2030: 1,733 Gcal/h
Reserve: 246.3 Gca./h
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4) Requirements for Heating System

The following are the three development areas for the heating system: Capacity Expansion: The supply capacity of the centralized system will expand through the capacity enhancement of the existing power plants and the provision of a new one (TPS-5). For this purpose, the heating pipeline needs to be rehabilitated and expanded. Local Cluster System Development: New town, large-scale housing, and/or urban redevelopment projects may install their own local heating systems to provide heating services within their project areas. Such a local cluster system can be managed by the developer, or by residents associations, through self-financing mechanisms. This system is applicable in the community level. An economical and low-maintenance heating system should be invented or selected. Individual Heating System: Individual houses not connected to the central system or local cluster systems can generate heating capacity through the following measures:
Constructing heat-efficient buildings and houses; Improving stoves used in Ger areas; and, Improving fuel quality used in Ger areas (briquettes, etc.).
Tariff Structural Reform: A flat charge is imposed on households that receive heating services from the central system. However, since the charge is so cheap, the overall collection is not enough to cover operating and maintenance costs, thereby resulting in poor maintenance. The tariff structure should thus be reformed from the standpoint of both consumer affordability and sustainable provision of quality services.
9.6
Solid Waste Management

The JICA Solid Waste Management Master Plan (2007) underscores the following solid management issues:
1) Planning Issues
Poor waste collection network; Inadequate self-treatment and illegal dumping of wastes; Limited capacity of existing disposal sites; and, No medical and toxic industrial waste treatment system.
2) Planning Target
The SWM Master Plan targets the establishment of an adequate solid waste management system that complies by 2020 with environmental conservation.
The volume of solid waste generated by Ulaanbaatar City will constantly increase along with the urbanization process and high economic growth. The total volume will account for 2,000 tons/day (winter) by 2030, or 2.6 times as much as that in 2006, as shown in Table 9.6.
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Unit: ton/day 2006 2010 2020 2030 Household and Multiple Winter 593.6 681.9 894.5 1,454.0 Waste Summer 276.9 375.2 708.4 1,151.5 Winter 146.1 179.9 298.6 475.0 Others Summer 208.5 257.1 430.6 690.0 Total Winter 739.7 861.8 1,193.1 1,929.0 Summer 485.4 632.2 1,139.0 1,841.5 Winter 372.0 752.0 997.8 Total Disposal Ammount Summer 530.7 553.0 1,001.4 Source: JICA Solid Waste Management Master Plan in Ulaanbaatar City (2007)
Table 9.6 Projections on Solid Waste Generation for 2010, 2020 and 2030
4) Proposed Measures on Solid Waste Management

Based on the status and demand analyses, the Master Plan proposed the following measures:
Construction of sanitary disposal sites and recycling plants; Strengthening of the waste collection network; Promotion of recycling business to the private sector; and Public awareness raising.
The total investment cost for to implement the above measures up to 2020 was estimated at Tg. 21.8 billion (US$ 18.6 million).
9.7
Air Pollution Control

According to the Household Interview Survey conducted by the JICA Study Team, the top issue that people considered as the most important urban service was improving air quality as shown in Figure 9.7. Air pollution control then is one of the most vital political issues. As one of the consequences of rapid urbanization, the degradation of ambient air quality is taking place especially during winter. It has been noted that major pollution loads come from Ger areas. Therefore, a planning issue is to mitigate heating emissions from Ger dwellings first before focusing on boilers in many types of plants. Figure 9.7 Citizens Opinion on Most Important Public Service
1) Planning Issues
Demand Projektion
Public information Telecommunication Traffic management City administration and services Sewerage/Drainage Land and housing Electricity Road infrastructure and facilities Public transport Garbage collection Recreation and sports facilities Water Supply Neighbourhood security Education Health/welfare services
Urban Air Quality Urban air quality

0 500 1,000 1,500
No. of answers
2,000
2,500
3,000
Source: HIS 2007, JICA Study Team
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2) Planning Target
By shifting from traditional household practices to an effective heating system, the reduction of pollution levels to 70% of the 2007 levels is a practical and achievable planning target.
3) Policies and Measures

(1) Mitigation of Pollutant Emissions from Ger Dwellings The central government has pursued a policy to accelerate apartment provision for ger dwellers to mitigate air pollution. This policy is necessary and rational in the long term, but at the same time, short- and medium-term solutions are also required to solve this serious problem. Three technologies need to be adopted at once in an integrated manner, as shown in Figure 9.8; otherwise, their effectiveness will dissipate: (a) Fuel innovation to improve thermal efficiency; (b) Household stove improvement to uplift combustion efficiency; and, (c) Use of energy-saving housing materials and techniques such as heat-in-wall system and insulation materials. As these three technologies have already been proven and are readily available, what is required is strong public support and political will. Figure 9.8 Integrated Measures to Combat Air Pollution
Thermal Efficiency
Fuel
Household Stove
Combustion Efficiency
Introduction of Heat-in-wall System & Insulation
Quality of House
Based on this recognition, the following measures are proposed:
Conduct of a public awareness campaign to fight air pollution and create a healthy city; Introduction of new energy sources such as biomass and coal-based fuel products, e.g. briquettes, etc.; Facilitation of an improved-stove distribution program (a World Bank-funded program); Housing improvement and heating network extension to develop local cluster heating networks; Promotion of energy-efficient housing construction with financial support such as subsi-
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dies and tax exemptions; and,
Pursuit of Co-beneficiation Approach together with air pollution reduction.

(2) Mitigation of Pollutant Emission from Utility Plants
There exist a remarkable number of aging boilers low on combustion-efficiency in the utility plants. These heat-only boilers should be replaced or rehabilitated. The central government may provide a subsidy program or a credit provision scheme in line with the SME enhancement policy. Fuel innovation through coal improvement projects should also be encouraged through government initiative, or through PPP schemes.
Notes:
Feasibility of Innovative Stoves
A few models of innovative stoves have been invented and tested through World Bank and GTZ programs. These stoves demonstrate considerable combustion efficiency, which translated to more than 40% saving on coal consumption. A financial viability of the installation of such stoves is examined below. Assumptions: One household consumes approximately 5 tons of coal in one season. Using the improved stove, 40% of coal consumption can be saved. The cost of the new stove is Tg.100,000, compared to around Tg.28,000 for the traditional stove. Expected Savings = = = (Unit coal cost) x (Saved coal amount in one winter) Tg.50/kg x 5,000 kg X 40% Tg.100,000
Thus, the purchase cost can be recovered from savings obtained in one season alone. In order to facilitate the increased use of the improved stoves, financial support is key. Initial payment for the stoves can be done through a micro credit, community finance, or government subsidies. A trade-in program is also feasible and would bring down the prices of new stoves, i.e. the depreciated value of old stoves can be deducted from those of new ones.
9.8
Disaster Management
Flooding is one of the disaster issues which Ulaanbaatar City should tackle. Flooding often takes place due to the degradation of the water-retaining capacities of land caused by the urbanization of hilly and steep areas as well as the deforestation of watershed areas.
The northern hilly areas, where numerous houses have encroached on, are especially problematic. Since flood-prone areas are identifiable from past records, the continued urbanization in these areas should be prohibited. The occurrence of an earthquake is another potential disaster, especially because Ulaanbaatar City is not located on an earthquake-free zone. Since it is impossible to predict and mitigate an earthquakes occurrence, action should focus on minimizing anticipated human and structural
1) Planning Issues
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damages in such an event and on recovering from such a disaster.
2) Planning Targets
The plan targets the following:
To mitigate damages caused by flooding; To prohibit residential occupation of flood-prone areas; and To minimize human and structural damages in the event of an earthquake.
3) Policies & Measures against Flooding

(1) Flood Protection and Flood Damage Mitigation The three E (3E) measures, i.e. environmental, enforcement, and engineering, should be incorporated into flood disaster management policies. Environmental measures:
The continued urbanization of the northern hilly areas should be prohibited; instead, these areas should be preserved; Deforestation and any form of tree trimming should be stopped in the northern mountainous areas to mitigate flood damages; Environmental conservation should be the first priority in land use management and control; and Community organizations should be promoted to facilitate peoples awareness and preparedness. Enforcement measures: All environmental measures should have inherent enforcement powers to help guide citizens behavior toward the appropriate direction. Designation of conservation areas for flood protection; Prohibition of building construction in designated areas; and Facilitation of resettlement programs for residents located in designated areas.
Engineering measures:
Local roads should be designed and constructed in a way that they function as dikes for disaster prevention; Improvement of drainage canals should be facilitated along with the construction of disaster prevention roads; and A technical and information center should be established to provide adequate technical advice on land development and disaster management to citizens and related authorities. Monitoring should be mandated to this center and linked up to universities and the Meteorological Office.
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(2)
Earthquake Preparedness
Since data on and scientific analyses of the potential occurrence of an earthquake are currently few, further research on the subject should be further encouraged. An Ulaanbaatar hazard map should be delineated, based on local scientific and engineering information and knowledge. In the meantime, preparedness on earthquake disaster management and relief should be enhanced in both the government and community levels. A vital element is the community-based activities that increase disaster preparedness and awareness. It should focus on the following aspects:
Areas for evacuation in the occurrence of a large-scale earthquake; Escape routes for evacuees; Provision of information network; Emergency activities; and, Sufficient stocks of survival food, medicine, etc.
These community-based preparedness activities should be promoted by the local government and international NGOs that are experienced and knowledgeable in disaster preparedness and rescue.
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10. DEVELOPMENT FINANCING MECHANISM
10.1 Weak Capacities of Development Funds and Municipal Financing

The total expenditure of the Government of Mongolia for the year 2006 was Tg. 1,177 billion, whereas that for the local governments combined was Tg. 96 billion. About 80% of the total expenditure of the Mongolian General Budget was current expenditure, whereas only 14% was allocated to capital expenditure. The total expenditure of the UB city government in 2006 reached Tg. 29.0 billion, out of which Tg. 18.2 billion, or 63%, was allocated for current expenditure, and Tg.10.8 billion, or 37%, for capital expenditure. Thus, the budgets to be appropriated for capital formation are limited in both the central and local governments. For the central government, the per-capita capital expenditure was Tg. 60,580, while it was Tg. 10,520 for the UB city government. Approximately Tg. 71,000 was allocated as budget for capital expenditure per capita in total. Table 10.1 Government Budgetary Structure
Item Central Government Total Revenue and Grants Current Revenue Grants and Transfers Total Expenditure Current Expenditure Capital Expenditure Net Lending UB Local Government Total Revenue Current Revenue Capital and Grants Revenue Total Expenditure Current Expenditure Capital Expenditure Subsidies & Transfers 40,519 38,098 2,421 29,025 18,189 10,835 4,141 100% 94% 6% 100% 63% 37% 14% 1,299,433 1,270,273 29,159 1,176,659 938,053 159,619 78,987 100% 98% 2% 100% 80% 14% 6% 2006 (Tg. Million) (%)
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The combined share of tax revenue of the local governments in the total revenue of Mongolia is 8.5% with 91.5% going to the central government. Mongolias tax revenue allocation system, as shown in Figure 10.1, is centralized, comparable with that of the UK. Since UB City accounts for more than half of the economic activities in Mongolia, the system could restrict the current autonomy UB City is enjoying in funding its public service provision based on potential tax revenue. Figure 10.1 Composition of Tax Revenue between the Central and Local Governments of Various Countries
Share of Tax Revenue
120% 100%
22.9% 8.5% 18.5% 33.1% 47.7% 49.7% 43.9% 42.4% 4.6%
80% 60% 40% 20% 0% Mongolia 2002 Mongolia 2005

91.5% 77.1%
Local G
95.4% 81.5% 66.9% 52.3% 50.3% 56.1% 57.6%
Central G
Canada*
France
Germany*
Japan
Sweden
UK
USA*
Source: Mongolian Statistical Year Book 2005 and OECD Statistics 2002 Note: Countries with * mark adopt federal government system.
The revenue size (tax and non-tax revenue) of Ulaanbaatar City in 2005 was 1.9% of its GRDP, which is far smaller than those of Fukuoka City (3.6%) and Sendai City (3.5%) both in Japan with a similar population size as UB Citys. The combined property tax (12%) and personal income tax (19%) of UB City was 31% of its total revenue for 2007, as shown in Table 10.2. Table 10.2 Municipal Revenue Sources of Ulaanbaatar City (2006 and 2007)
/thousand tugrugs/ 2006 No Revenue type Total revenue and grants Total without transfer Personal income tax Property taxes Taxes on goods and services Other taxes Non-tax revenue Revenue from transfers Capital revenue Plan 39,858,178.5 33,861,947.8 6,036,108.4 3,983,618.9 3,032,000.0 11,744,522.4 6,424,204.1 5,996,230.7 2,641,494.0 Actual (expected) 40,518,599.4 34,522,368.7 6,653,686.9 3,983,820.3 3,032,000.0 11,746,610.1 6,685,234.5 5,996,230.7 2,421,016.9 % 100% 19% 12% 9% 34% 19% NA 7% 2007 draft 41,321,452.8 36,906,648.7 2,954,101.7 5,000,613.5 3,212,000.0 16,137,515.4 6,868,468.1 4,414,804.1 2,733,950.0
1 2 3 4 5 6 7
Source: Ulaanbaatar City
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10.2 Strengthening of Municipal Financing Capacities

There are six (6) basic principles to be applied when financing public services under a market economy. The most important is the beneficiary-pay-principle which purports that beneficiary should pay the proportional amount of benefit from public services the beneficiary receives. Under the market economy, the government is not the sole entity which shoulders all public service cost, but the beneficiary of a service is the other entity that pays for the cost in proportion to the amount of benefits received. The six (6) basic principles are:
Beneficiary pays in proportion to the amount of benefit of public services he/she receives; Tax imposition in proportion to the amount of economic value that the tax payer creates or owns; Matching of service cost payment and benefit in terms of both amount and time; Best mix of three funding sources of public funding, user charge and beneficiary charge; Utilization of capital markets; and, Facilitation of stakeholder and private sector participation.
These are examined in the line with a strategic framework that employs the three strategies of: Common Strategy; O&M Financing Strategy and Capital Financing Strategy, as shown in Figure 10.2. Figure 10.2
PUBLIC SERVICE
Strategic Framework for Financing Public Services

PRESENT
Limited Tax (Budget) Allocation & User Pays Principle
PROPOSED STRATEGY
Operation & Maintenance Cost
Insufficient Funding Poor Service Quality
2: O&M Financing Strategy
Capital Investment Cost
Dependence on Donor Financing & Limited Tax (Budget) Allocation
1: Common Strategy 3: Capital Financing Strategy 1
+
4: Capital Financing Strategy 2
Insufficient Capital Investment
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1) Common Strategy
The common strategy has four components: (1) Broaden Tax Revenue Base; (2) Matching of service cost payment and benefit in terms of both amount and time; (3) Best mix of three funding sources of public funding, user charge and beneficiary charge; and (4) Efficient Finance Management System. (1) Broaden Tax Revenue Base
In order for UB City to have an adequate revenue size to meet its development needs in terms of infrastructure development and economic activities, it is essential to reform the current centralized revenue allocation system in which the City does not enjoy the freedom of attaining budget revenue size relative to its scale of economic activities. Within the framework of the current fiscal system, it is recommended that the improvement and expansion of property-related taxation should be considered to broaden the current revenue base of UB City. The following measures are proposed and at the same time the registration system of property asset should be upgraded for the effective imposition of these taxes. Application of property-related taxes: Such as Real Estate Tax to apartment owners and Immovable Property (building) Tax to detached houses and apartment owners. Application of urban planning tax: Imposed on property owners within the urbanized zone. Revenues from this urban planning tax shall be earmarked for facility development and improvement of urban planning facilities such as roads, urban rail, bus terminals, parks, utilities, waste disposal, etc. which are designated in the UB Master Plan. In Japan, the tax rate is 0.3% of the property value (land and building) while the rate of property tax is 1.4% of the property value. The tax rate should be determined very carefully after a thorough assessment of the affordability of households and through different income levels. It should also start at the minimal level of the tax rate. (2) Matching Costs and Benefits
Majority of public service provision need large initial capital investments to construct facilities for the provision of services. The beneficiary should pay, through the tax payment, the cost of constructing a facility in proportion to the service the beneficiary receives. The operation and maintenance cost of service provision may be covered through a user charge on a full cost recovery basis. In order to distribute the construction cost evenly throughout the long economic life of the facility, the service provider may borrow the construction cost in the long term to match the long economic life of the facility so that tax payments from beneficiaries in a particular period could cover the fair distributed cost of construction. This is the matching of cost and benefit strategy of public service provision, as illustrated in Figure 10.3. This strategy should be applied to the fiscal management of UB City.
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Figure 10.3
Matching of Cost Payments and Benefits with Public Services

Economic & Social Benefit of Public Service
Benefit Benefit
Capital Cost
Service Beneficiaries (Service Users)

Tax Payment Recurrent Costs User Charge Matching of Cost and Benefit
Infrastructure Investment
Share of Investment Cost by Long-term Borrowing Operation and Maintenance Costs 0 Economic Service Life of Infrastructure
(3)
Best Mix of Three Funding Sources
There are three (3) funding sources in financing public service provision:
Public Funding (tax bond and loan); User Charge (toll, fare, service charge, etc.); and, Beneficiary charge (development contribution, etc.).
UB City needs to use these three funding sources and mixed them appropriately whenever possible. Public funding includes tax revenues and market borrowing through such means as loans, bond issues, and so forth. A user charge is a charge imposed on such services as the use of water, power, transportation, road, parking and so on. A beneficiary charge is an imposition of charges for development. Beneficiaries such as residents, companies and other relevant organizations who will benefit from the construction of large infrastructures such as mass transit system, expressway, integrate urban development, housing complex, etc., shall share part of construction cost at a certain time and rule. (4) Efficient Finance Management System
UB City needs to improve its current finance management system in the terms of the following: Transparent budget system, Credible accounting system, Independent audits, Rational pricing policies, Monitoring performance criteria for monopoly services, and Predictable fiscal relations with the central government. An efficient finance management system would help UB City to improve its creditworthiness in the capital market which is essential condition for UB City to borrow funds for the construction of infrastructure in the long term from the market.
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2) Operation & Maintenance Financing Strategies

A basic strategy in financing the operation and maintenance of public service provision can be represented in the From Government-pay Principle to User-pays Principle. Figure 10.4 shows the outline of the strategy in which a shift would be facilitated from the current funding sources and inclined toward public funding (Central Government and UB City: Government pay) to an appropriate mix of various funding sources (Beneficiary: Community, User Charge and Private Sector) to cover the operation and maintenance cost of public service provision. Figure 10.4 Operation and Maintenance Financing Strategies
Government-pays Principle (Present) Government Pays Principle (Present)

CONSTRUCTION Funding Body
GOM UB Comm unity
URBAN PUBLIC SERVICE
Service
User Private Quality
OPERATION & MAINTENANCE Funding Body Service Comm GOM UB User Private Quality
unity
1. Transport 2. Utilities 3. Social Infra/Living Environ 4. Housing 5. Urban Development
- -
- -
C C C D D
D D D D D
User-pays Principle (Proposed) Users Pays Principle (Proposed)

CONSTRUCTION Funding Body
GOM UB Comm unity
URBAN PUBLIC SERVICE
Service
User Private Quality
OPERATION & MAINTENANCE Funding Body Service Comm GOM UB User Private Quality
unity
1. Transport 2. Utilities 3. Social Infra/Living Environ 4. Housing 5. Urban Development
- -
A A A A A
A A A A A
3) Capital Financing Strategy 1

Capital financing strategy is twofold, as shown in Figure 10.5. The first step is to make efficient use of existing funding sources and to expand tax revenue base. Based on the creditworthiness of UB City, which can be gleaned from and created through the first step, the second step is to make UB City capable of borrowing long-term funds for construction from the capital market.
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Figure 10.5
Capital Financing Strategy 1

Special account of earmarked taxes/ Leveraging ODA funding/PPP/PFI Long term local government bond/ project bond/ project loan/ financial intermediary
Make Efficient Use of Existing Funding Sources Prepare Strategic Plan
Good Mgt of Capital Financing
Achieve Stable CF and Creditworthiness
Long-term Borrowing for Capital Investment
Expand Local Revenue Base
Benefit based fees/charges/taxes /Value capture methods
(1)
Make Efficient Use of Existing Funding Sources
Special account of earmarked taxes and budgets: The road fund is an example of earmarking a user charge on beneficiaries for the provision of road services. The fund earmarks proceeds from vehicle registration fees or entry fees from car users entering UB City. A similar earmarking of funds should be practiced more comprehensively. One such example is the systematic parking fee collection to develop parking facilities in the citys CBD. Leveraging ODA funding: One of the major funding sources for the development of infrastructure is through ODA donors funding. However, Mongolias current use of donor funding is fragmented and is not utilized in a concentrated manner. UB City should orchestrate the usage of potential donor funding by streamlining and coordinating various interests presented by different donors and agencies based on the recommendations made by the UBMPS. Application of Community-based Financing System: As a part of self-help mechanism for the improvement of the Ger areas, a community fund system may be developed as illustrated in Figure 10.6. This system is characterized through the following mechanisms:
A community fund will be created with funding from the Government of Mongolia on the basis of ODA grant money, or an ODA loan, to be granted to Ulaanbaatar City together with periodical savings deposit from landowners in the community. A cooperative among the landowners will be formed as a legal implementing body of the system. A NGO that is capable of managing such funds will be the fund manager of the community fund with assistance from a commercial bank. An escrow account will preferably be used for the management of the community fund. A tripartite agreement will be signed by Ulaanbaatar City, the landowners cooperative, and the NGO. Using the grant and the deposited savings from the landowners as its own funding3, the cooperative will borrow bridge financing from the MHFC to construct a mix of mid-rise condominium buildings and apartments to house the landowners in the community.
3 The loan to value ratio should be less than 80%, in other words, more than 20% of the own funding will be required.
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Surplus floor area, or apartment units, shall be created in the development and sold to the market to supplement investments for necessary infrastructure provision and community facilities. It will also form as a repayment of the bridge financing from public financing institutions. Subsidized mortgage loans shall be provided to middle- and lower-income households who wish to buy apartment units, as well as households who wish to move into the community.
Figure 10.6
ODA Donor
Grant
Proposed Community-based Financing System
GOM
Grant
UB City
Tripartite Agreement
Land Owners
NGO
Cooperative of Land Owners

Management Contract Grant Periodical Deposit Construction Contract Agent Contract
Public Financing Institution
Bridge Finance Subsidized Mortgage Loan
Community Fund Grant Portion

Funding
Construction Company
Surplus Floor Area for Sale
Real Estate Agent
Purchasers
Construction
Individual Housing Improvement
Development of Infrastructure and Construction of Apartment/Houses
Sales Proceeds of Surplus Floor Area
(2)
Expand Local Revenue Sources
The value capture method should be widely applied to ensnare funding for beneficiaries of positive economic influence generated by the construction of large infrastructures. Facilitation of the value capture methods should be carried out in the following manner:
Development Charge: Charges on infrastructure costs and development permit. Developer Contribution: Sharing on cost of roads, utilities, park, school, hospital, community facilities, and other infrastructures. Betterment Charge: To compensate for the improved value accrued to the property owners through the provision of public facilities. Infrastructure Service Fund: In-lieu-payment of necessary infrastructure provision.
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With a variety of funding sources, a sectoral financing framework for infrastructure development and their operation and maintenance is depicted in Table 10.3. Table 10.3 Sectoral Financing Framework for Infrastructure Development and O&M
PUBLIC SERVICE Tax 1. Transport 1) Bus 2) MRT 4) Road 3) Toll Road 2. Utilities 1) Power 2) Heating 3) Water Supply 4) Sewerage 5) Solid Waste 3. Social Infra/Living Environ 1) Public School 2) Public Hospital 3) Community Facilities 4) Park 4. Housing 1) Middle-Income 2) Low-Income 5. Urban Development FUNDING SOURCES CONSTRUCTION OPERATION & MAINTENANCE Donor
Value Capture
Private Tax
Donor -
User Charge Private
Notes: Source:
Major Funding Source; Minor Funding Source/Subsidy; - Not applicable; Shaded: to be facilitated JICA Study Team
4) Capital Financing Strategy 2

(1) Issuance of City Bond and Long-term Loans in the Capital Market The second step is to make UB City capable to borrow long-term from capital markets on the basis of its own creditworthiness by means of long term municipal bonds, project bonds, project loans, and so on. The City should ultimately acquire its own credit rating from relevant credit agencies to widen and increase its potential for raising funds from the capital market. (2) Establishment of a UB Infrastructure Financing Corporation
Establishment of a financing intermediary that specializes in financing infrastructure development could allow UB City to have an efficient vehicle to tap the Central Governments financial resources (through revenues from the mining sector), multilateral and bilateral financial institutions, and ultimately from the domestic and foreign capital markets. Although it may need central government guarantee in the beginning phase, it will be worthwhile for UB City to examine the possibility of establishing the UB Infrastructure Financing Corporation (UBIFC) which will play a role as a financing intermediary in initiating infrastructure projects by public service entities as well as the UB City government. In the long run, it could be able to borrow long-term funds from capital markets or leverage its equity capital based on its own creditworthiness.
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5) Summary of Proposed Measures

The proposed measures are summarized in Figure 10.7. Figure 10.7 Summary of Proposed Strategies for Financing Capacity Enhancement
Common Strategy
1.
O&M Financing Strategy

Stakeholder participation Community-based housing and public service provision Private sector participation Introduction of Public Private Partnership (PPP)
Broaden Tax Revenue Base Improvement and expansion of property related taxation Introduction of Urban Planning Tax
2.
Efficient Finance Management System Matching of service cost payment and benefit Beneficiaries-Pay-Principle based on Value Capture Mechanism

Efficient Use of Existing Funding Sources Special account of earmarked taxes and budgets Leveraging ODA funding Application of Community Financing and PPP
3.
4.
Best-mix of three funding sources = public funding, user charge and beneficiary charge

Long-term Municipal Bond, Project Bond & Loan Establishment of Financial Intermediary UB Infrastructure Financing Corporation
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11. IMPROVEMENT OF INSTITUTIONAL AND LEGAL FRAMEWORK
11.1 Planning Issues

Since 2002 the Government of Mongolia has built a legal framework for urban development and land management. However, the entire legal framework is still so weak that it does not cover the necessary administration for urban growth management. Major legal systems related to urban planning are available in three (3) laws; Urban Development Law, Housing Law, and Land Law. The three laws should be mutually coherent and integrated, as conceptualized in Figure 11.1. Figure 11.1 Legal Integration of Three Urban Planning Laws
Urban Development Law Urban Development Law

Master Plan Zoning System Rules and Regulations for Development
Construction Permission Construction Permission Land Expropriation for Pubic Use Land Expropriation for Pubic Use
Housing Development Guidelines Housing Development Guidelines and Standards and Standards
Urban Growth Urban Growth Management Management

Land Registration Permission of Land Title Housing Master Plan Housing Development Fund
Land Law Land Law

Right of Land Ownership, Right of Land Ownership, Possession or Usage Possession or Usage
Housing Law Housing Law
In addition, new regulations and/or guidelines should be created to meet current requirements on urban development and the improvement of the ger areas. The following elements should be employed to enhance the general legal function:
To review the Urban Development Law as a tool of development control and promotion, as well as stipulate and address requirements of the following:
Legal functions of the Master Plan and governmental responsibilities; Zoning system; and Development guidelines.
To review Housing Law for the establishment of a Social Housing Corporation and
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the enlargement of a Housing Development Fund in tandem with the following:
Housing guidelines and standards; and Realization of the Housing Development Fund.
Review of the Land Law and Law on Allocation of Land to Mongolian Citizens for Ownership for appropriate land management and land value assessment systems, based on the need to rationalize the following items:
Land registration system; Newly amended ownership allowance: 700m2/HH to 700m2/person, and Land use permission.
To build new laws to guide the requisite urban development and Ger area improvement through the following items:
Land Readjustment Law; Urban Redevelopment Law; New Town Development Law; and Land Compulsory Expropriation Law.
11.2 Enhancement of the Urban Development Law

(1) Amended Urban Development Law Although the Urban Development Law was enacted in 1998, its has not been effectively enforced in a proper legal environment to regulate urban development issues under a market driven economy. Because of this fact, the Urban Development Law was amended and approved by the Parliament in June 2008. The amended law is expected to provide legal teeth for the effective management of urban development and land use in urban areas. The amended law stipulates a Zoning System in the master plan, as well as the legal objectives and responsibilities of master plans and approval procedures on urban development plans and projects, the documentation of the master plan and other related plans, etc. Out of these articles, the most important is the Zoning System which shall regulate appropriate land use and help manage housing and facility development. Although this system needs to be inherently associated with administrative enforcement and monitoring, any effective and concrete measures on these aspects have yet to be stipulated. (2) Sub-regulations and Administrative Procedures for Execution of the Urban Development Law
Sub-procedures, rules of administrative operation, enforcement regulations and ordinances have not been definitely established under the Law yet, and these issues are still being formulated. It will also employ extensive research and include discussion on such issues as: codes and criteria for zoning system, basic planning process for city master plans, integrated standards and formats for urban development documents, guidelines for city design and landscape, Ger area redevelopment planning, and other related regulations in order to establish appropriate legal environment in the conduct of urban development and administrative interventions on the construction sector.
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Such an integrated regulatory framework is crucial in the building and development of modern Mongolian cities. They should also be explored for suitableness and for the uniqueness of this country, with professional advice and reference from the experiences of developed countries. Another important legal aspect is the regulation of physical and spatial limits on building and land use with respect to designated zones. This regulation, which is popular in progressive countries, will determine the environmental quality, spatial structure and the economic efficiency of land use. Useful indicators for regulation are as follows:
Floor area ratio (FAR = total floor area of the building/land area); Building coverage ratio (BCR = building area/land area); Building height limit; and/or, Building setback (requirement of distance from the right of way to the building surface line).
11.3 Legal System to Realize Housing Policies

The Housing Law of Mongolia regulates the planning and design aspects of housing facilities based on living standards and the maintenance of apartments. It also stipulates the setting up of the Housing Development Fund (HDF) and the guidelines for using it. The Central Government has enacted some basic regulations related to housing and apartment development as described in the Housing Privatization Law and the Law on the Property of Shared-ownership of Residential Buildings and Legal Status of the Condominium Association. However, many relevant laws and regulations still have to be established or amended to suit current socio-economic conditions and realities. The establishment of new public institutions for housing finance and development in order to ensure housing improvement for vulnerable citizens is expected. The following legal measures are especially desired to be used for working groups involving MRTCUD, UB City, and other concerned agencies:
Law on Housing Development Financing Institution (HDFI) Law on Community Organizations Development Institute (CODI) Law on Social Housing Corporation (SHC)
The financial resources of Housing Development Fund (HDF) stipulated in the Housing Law is not sufficient to meet the present housing needs, and new financial resources have to be incorporated into HDF. To this end, the following resources are expected to be introduced for housing finance and development along with the necessary legal amendments on financial arrangements.
Mongolian Development Fund National Pension Fund Housing Development Mutual Fund
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11.4 Legalization of Development-Related Laws

Besides the Urban Development Law and Housing Law Mongolia has the following major law relative to the land and housing development.
Construction Law Land Law Environmental Protection Law / Environmental Impact Assessment Law
Construction Law regulates all aspects of development, engineering drawings, activities related to the development of the construction material industry, the norms and standards of construction works, and the normative technological and engineering criteria. It prescribes the rules of maintenance in construction sites and of technical supervision and safety of the compounds. However, currently the Construction Law is not applied in Ger areas. Therefore, some measures that will control construction and urban development activities in those areas have to be introduced. Land Law stipulates the extent of land tenure, such as ownership, possession and using right of land. The land ownership of Mongolian people was approved in 2002 through the Law of Allocation of lands to Mongolian Citizens for Ownership. More uniquely, there is a land fee decision system for land possession using the Law of Mongolia on Land Fee. It should also be noted that there is no land value assessment system which is an essential element that facilitates market-driven urban development. A rational system for land value assessment has to be introduced in such a way that economically rational land use is facilitated in line with the urban development law and land use regulations. Another planning issue is that the newly amended land ownership allowance from 700 m2 per household to 700 m2 per capita in 2008 will affect the efficiency of housing land use and make the improvement of Ger areas difficult. As it is obvious that within the current urban area, no sufficient land remains to respond to requirements under the new allowance of land ownership, urbanization will tend to be expanded outward, thereby leading to an inefficient urban structure against the concept of Compact City. Environmental Protection Law and Environmental Assessment Law prescribe basic policies for preserving the urban and natural environments and the technical standards for the environment impact assessment. These laws have to be operated together with urban growth management and the review of the surveillance system.
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11.5 New Legal Framework for Urban Planning Projects

The existing legal system in Mongolia is inadequate for promoting land, housing and commercial development projects which have been included in the Master Plan. The absence of a legal framework for project implementation is one of the major obstacles in the promotion of projects in a proper manner by private investors. A regulatory framework for development projects should be established, such as: a Land Readjustment Law, Urban Redevelopment Law, and a New Town Development Law. Table 11.1 shows the expected legal framework in land and housing development that should be further studied, taking into account the financial burden of the public sector, the acceleration of private participation in public services, the creation of new financial sources, and the improvement of the investment environment for the private sector. Table 11.1
Legal Framework
Legal Framework to be Studied for Land and Housing Development

Existing Legal System New Legal System Legal Objectives Effective use of the private sector for land and housing development, through the introduction of a new city planning system such as strict zoning, growth management, legal district plan, urban facilities, and new development permit system. Introduction of land and Infrastructure development system which is simple and easy to understand for citizens, with no heavy financial burden on the public sector. Large-scale supply of housing and workplaces by enabling compulsory land expropriation or purchase in advance. To vest public sector with land compulsory expropriation rights inside the boundary of the authorized city planning projects. Enhancement of financial resources and establishment of implementation body for affordable housings for low income class people. Institutionalization of a mechanism to improve, renewal and redevelop old and disorderly housing and/or commercial areas with sufficient transportation network, infrastructure and utilities. Improvement of the land-use management system to be linked with the Zoning System designated in the Master Plan, and introduction of a land value assessment system.
Law for city planning and development
Urban Development Law
To be revised
Community Development Networking System Land Readjustment Law Law for Land Development New Town Development Law Land Compulsory Expropriation Law Law for Housing Development
Housing Law
To be revised
Law for Urban Redevelopment
Urban Redevelopment Law
Law for Land Ownership
Land Law; Law of Allocation of Land to Mongolian Citizens for Ownership
To be revised
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12. CITY DEVELOPMENT PROGRAM
12.1 General
Based on the revised City Master Plan and the proposed city planning system, a draft of the Ulaanbaatar City Development Program, with 2020 and 2030 as its targets periods, has been compiled. It addresses a strategic framework to achieve the citys development goals and objectives. In the process of the formulation of the program, the close discussion and coordination with the Mongolian Side and other donors were made to make the program as the most common base for the development of Ulaanbaatar City. Nevertheless, the program as presented herewith is still subject to changes based on the further elaboration of processes and procedures. The Ulaanbaatar City Development Program consists of three components, that is hardware, software, and human capital. The hardware shall include the improvement and/or development of social and economic infrastructures. In particular, two projects are provisionally given high priority: one is transportation to enhance peoples mobility with well-functioning public transportation system, road network and comprehensive traffic management measures; and the other is a water-related program to supply fresh water to all citizens and improve the sewerage capacity against degradation of the urban environment Meanwhile, the software component includes the improvement and/or development of legal system and financial mechanism to support efficient growth management and implement the programs proposed in the new Master Plan 2020 and 2030. The most vital and urgent issue is to prepare the supplemental institutional and administrative system in a comprehensive legal framework for the Urban Development Law which was recently amended in May 2008. The human capital component includes capacity building program in urban planning administration of both the central and city governments. This component should be incorporated into both the hardware and software components.
12.2 Overall Program until 2030 (Long List)

From the long-term perspective, and based on findings of current problems, development programs to be carried out for Ulaanbaatar City were considered for major sectors related to the urban planning issues such as (see Figure 12.1):
Urban Economic Enhancement Urban Transportation Infrastructures and Utilities (Urban Water & Sanitation; Electric Power; Heating System; Solid Waste Management) Housing and Housing Policy Enhancement; Urban Environment (Living Environment Improvement; Environmental Management;
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Urban Amenity & Disaster Management) Social Service Improvement; Institutional & Legal-base Development; and Development Financing System
Figure 12.1
Overall Framework for Formulating Development Programs

Urban Development Visions Urban Development Visions 1. Competitive world class business center 1. Competitive world class business center 2. Livable city with sufficient infrastructures and housing 2. Livable city with sufficient infrastructures and housing 3. Healthy and safe city 3. Healthy and safe city 4. Democratic city with good governance with peoples 4. Democratic city with good governance with peoples participation participation 5. Reputable international tourism center in Asia 5. Reputable international tourism center in Asia
Current Problems Current Problems Disorderly Land Use Disorderly Land Use Traffic Congestions Traffic Congestions Insufficient utility services Insufficient utility services Substandard Ger settlements Substandard Ger settlements Poor public services provision Poor public services provision Legislative and Institutional Legislative and Institutional deficiency deficiency
Compact City Compact City

Spatial Structure Spatial Structure
Development Issues Development Issues A) Urban Economic Enhancement A) Urban Economic Enhancement B) Comprehensive Urban Transportation System B) Comprehensive Urban Transportation System C) Infrastructures and Utilities Improvement C) Infrastructures and Utilities Improvement D) Housing and Housing Policy Enhancement D) Housing and Housing Policy Enhancement E) Urban Environment Management E) Urban Environment Management F) Social Service Improvement F) Social Service Improvement G) Institutional & Legal-base Development and Governance G) Institutional & Legal-base Development and Governance H) Development Financing System H) Development Financing System
Since development issues were identified in consideration of how to achieve the development visions, there are close interrelations between both as shown in Figure 12.2. One vision cannot be achieved only with the solution of one issue, but needs composite solutions through their direct and indirect effects. On the same way, one program to solve one issue often brings multiple impacts on the achievement of multiple visions. There are also inter-linkages among the development issues, as shown in Figure 12.3 and such mutual relations should be considered to formulate development programs. None of programs cannot be standing alone, but every program has explicit and implicit impacts to others.
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Figure 12.2
Development Issues
Inter-linkages between Development Visions and Issues

G: Institutional & Legal-base G: Institutional & Legal-base Development and Development and Governance Governance H: Development Financing H: Development Financing System System
B: Comprehensive Urban B: Comprehensive Urban Transportation System Transportation System
D: Housing and Housing D: Housing and Housing Policy Enhancement Policy Enhancement
C: Infrastructures and C: Infrastructures and Utilities Improvement Utilities Improvement
E: Urban Environment E: Urban Environment Management Management
A: Urban Economic A: Urban Economic Enhancement Enhancement
Development Visions
1. Competitive world class business center 2. Livable city with sufficient infrastructures and housing 3. Healthy and safe city 4. Democratic city with good governance with peoples participation 5. Reputable international tourism center in Asia Notes: Direct interrelation Indirect interrelation
Figure 12.3
Mutual Relations among Development Programs

Compact City Compact City
Spatial Structure Spatial Structure
A: Urban Economic Enhancement A: Urban Economic Enhancement Program Program
E: Urban Environment E: Urban Environment Management Management Program Program
B: Comprehensive Urban B: Comprehensive Urban Transportation System Transportation System Program Program
D: Housing and Housing D: Housing and Housing Policy Enhancement Policy Enhancement Program Program
C: Infrastructures and C: Infrastructures and Utilities Improvement Utilities Improvement Program Program
F: Social Service F: Social Service Improvement Program Improvement Program
144
F: Social Service F: Social Service Improvement Improvement
G: Institutional & LegalG: Institutional & Legalbase Development base Development and Governance and Governance Program Program
H: Development Financing H: Development Financing System Program System Program
Program linkage necessary to materialize the Compact City Inter-program linkage
A total of 115 projects/programs, which are all essential to materialize the Master Plan 2020 and 2030, have been listed for the Ulaanbaatar City Development Program, as shown in Table 12.3. The following attributes of each project are presented in the table:
Support scheme: types of support to be required are presented: Technical Assistance (TA), Financial Assistance (FA) and/or Private Participation under a Public Private Partnership (PPP). Project Priority is represented in the time framework such as:
the short-tem: the medium-term: the long-term: to be completed or in service by 2015; to be completed or in service by 2020; and to be completed or in service by 2030 and/or beyond.
Some projects have long life on a long-term perspective. The volume and intensity of inputs are represented in this timeframe by X.
Investment cost for each project is provisionally estimated. These costs are subject to further clarification. This cost indicates initial investment costs to be prepared by the public sector, or under a PPP scheme, including the private sector. Since some projects are of cost-recovery type, the total cost of the cash flow may be different from this cost. Related projects are presented in the last column. This means that the project should be prepared, or designed, in consideration with related ones.
The total cost of the proposed 115 projects/programs accounts for US$9,894 million, as shown in Table 12.1. This investment needs to be allocated during the time period of 23 years up to 2030. Looking into the sector allocation of the investment cost, the largest share of 43.3% is appropriated for the transport sector, followed by the infrastructure and utilities services (20.5%), the Living Environment and Social Services Improvement (15.1%), and Housing Development (14.2%). The transport sector requires US$ 4,283 million, out of which about US$ 2,249.3 million (52.5%) shall be allocated for the Public Transport System, and US$ 1,901.1 million (44.4%) for Road Improvement. Almost equal distribution is made for both. Also important is the investment on Traffic Management. Although it shares only 3% of the transport sector, it will bring great impacts on alleviation of traffic congestion in the short-tem. The sector of Infrastructure and Utilities requires about US$ 2,032.7 million in total, out of which US$ 661.5 shall be allocated for Heating System Program, and US$ 480 million, for Electric Power Supply, US$ 440.0 million for Sewerage System and US$ 413.0 for Water Supply System. As for the Housing Sector, a total of US$ 1,407 million of public investment shall be necessary, out of which US$ 730 million is assumed to be allocated for the land development of two (2) new towns; and US$ 410 million, for social housing development of 20,000 units which shall be initiated by the Social Housing Public Corporation (to be newly established) until 2020. This cost will be recovered by selling housing units, and revenues may be reinvested for additional social housing development.
145
For the Living Environment and Social Services Improvement, a total of US$ 1,498.2 million will be needed up to 2030. The largest amount of public investment, or US$ 600 million, is assumed to be appropriated for the Rehabilitation of Degraded Apartments and Public Service Facilities, including approximately 65,800 units. This cost shall be recovered through the payment of individual owners and private real estate agents. The revenues may be utilized for additional rehabilitation projects as a revolving fund. The second largest investment, or US$ 230 million, should be allocated for Enforcement of Relocation from Flood Prone Areas which aims to move high risky settlements (about 15,000 households) to safer land areas, or new town areas. In order to uplift the level of social services, a total of US$ 400 million of public investment is necessary to be allocated for development of a sufficient number of educational and health facilities in communities, under a planning and design norm/standard to be newly reviewed. In order to strengthen the institutional, legal basis, and financial structure, a great amount of the investment is not required, but the impacts of the development will be extremely large and important. The necessary budget will be only US$28 million, out of which US$ 8.0 shall be used for a training program for urban planning administration and capacity building for the realization of the Master Plan, and US$10.0 million shall be allocated to facilitate technologies and the skills of the construction sector through a capacity development program.
146
Table 12.1 Summary of Project Investment Costs

Sector/Sub-sector
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Urban Economic Enhancement Program Urban Transportation Program (Road Projects) Urban Transportation Program (Public Transport Projects) Urban Transportation Program (Traffic Management Projects) Urban Water & Sanitation Program (Water) Urban Water & Sanitation Program (Sewerage System) Electric Power Program Heating System Program Solid Waste Management Program Housing and Housing Policy Enhancement Program Living Environment Improvement Program Environmental Management Program Urban Amenity & Disaster Management Program Social Service Improvement Program Institutional & Legal-base Development Program Development Financing System
No. of Projects
6 17 5 3 7 7 6 9 8 9 7 4 6 4 10 7
Public Investment (Million US$)

645.0 1,901.7 2,249.3 132.0 413.0 440.0 480.0 661.5 38.2 1,407.0 722.2 10.0
Sector Allocation (Million US$)

645.0
Share (%)
6.5%
4,283.0
43.3%
2,032.7
20.5%
1,407.0
14.2%
1,498.2 365.0 401.0 21.5 28.0 6.5
15.1%
0.3%
Total
115
9,893.9
100.0%
147
Table 12.2
Sector/Program Sector Code Sub-sector Sub-center Development Urban Economic Enhancement UED Business & Commercial Industrial Tourism Road Urban Transportation UTR Public Transportation Traffic Management Safety Improvement Water Resource Urban Water & Sanitation UWS Water Supply Sewage System Electric Supply Electric Power EPW Electric Network Institutional Mechanism Heating Supply Heating System HTS Heating Network Heating Efficiency Institutional Mechanism Garbage Collection Solid Waste Management Telecommunication Housing and Housing Policy Enhancement SWM TCM HSG Recycle system Institutional Mechanism Capacity Enhancement Low-cost Housing Social Housing
Program Categories and Project Codes

Sub-sector Code Sc Bc Id Tm Rd Pt Tm Sf Wr Ws Ss Es En Im Hs Hn He Im Gc Rs Im Lh Sh Development Financing System DFS Institutional & Legal-base Development ILG Urban Amenity & Disaster Management Social Service Improvement ADM Environmental Management EVM Living Environment Improvement LEV Sector/Program Sector Code Sub-sector Technical Standard Capacity Development Housing Quality Education and Promotion Public Facilities Community Empowerment Natural Environment Pollution Control Environmental Assessment Drainage and Flooding Green and Open Space Education SSI Health Urban Development Housing Standard Construction Financial System Sub-sector Code Ts Cd Hq Ep Pf Ce Ne Pc Ea Df Go Ed He Ud Hs Cs Fs
148
Table 12.3
Proposed Ulaanbaatar City Development Program for UBMPS 2020 and 2030
Project Description Implementing Agencies Support Scheme TA FA PPP Priority S M ~2015 ~2020 L ~2030 Cost (mil. US$) Related Projects
Code
Project
Beneficiaries
Urban Economic Enhancement Program

Relocation and Collectivization Project for Local Processing Industries (Industrial Park Development) Business entrepreneurs and employees of leather processing and cashmere processing industries, etc Small & medium scale industries and employees Commercial, business and service sectors and UB citizens Business entrepreneurs and employees of ICT/ business process outsourcing (BPO) industries Commercial and service sectors, UB citizens and tourists Foreign and Mongolian tourists and local tourism business entrepreneurs and employees Financial and technical support to relocate more efficient land and infrastructure use for leather processing industry and cashmere processing industry. It is necessary that both industry associations agree with the project as a precondition. Capacity expansion of current business incubation facility, and financial and technical support to tenants of the incubation facility. New urban sub-center development in association with development of the Mass Rapid Transit Systems in the major corridors of Peace Avenue. (3 sub-centers)
UED-Id-01
XXX
XX
XX
80.0
UED-Bc-01
UED-Bc-01
Improvement of Incubation Facility Project
XXX
XX
20.0
UED-Id-01 UED-Sc-02
UED-Sc-01
Commercial & Business Sub-centers Development
XX
XXX
150.0
UED-Sc-03
UED-Sc-02
Development of ICT and Knowledge Industry Center
To develop one sub-center as a center for incoming industries for Ulaanbaatar city such as the ICT industry and those involving higher education.
XXX
XX
50.0
UED-Bc-01
UED-Sc-03
Development of Underground Shopping Arcade
To develop UB Underground Shopping Arcade as a new urban attraction in the central district in association with development of stations of the MRT system. Relocation of current Tourism Information Center in Ulaanbaatar and improvement information provision functions to visitors. Development city circuit tour program and improvement of signage. Beautification of surroundings of tourist sites.
XXX
XX
340.0
UED-Sc-01 UED-Tm-01
UED-Tm-01
Improvement of Tourism Information Provision Project
XXX
5.0
UED-Sc-03
149
Code
Project
Beneficiaries
Project Description Implementing Agencies
Support Scheme TA FA PPP
Priority S M ~2015 ~2020 L ~2030 Cost (mil. US$) Related Projects
Urban Transportation Program (Road Projects)

UTR-Rd-01 Network Development of EW-1: Gachuurt to 22Km-post through Peace Avenue Network Development of EW-3: from Bayanzurkh to Road to Thermal Power Station No.4 through Narny Zam Network Development of NS-2: Eastern section of Middle Ring Road Network Development of NS-6: from Ikh Toyruu to Engels Street Network development of NS-7: from Chinggis Avenu to Ard Ayush Avenue through Ajilchin Street Development of Highway to Connect Ulaanbaatar City to New Airport and Zuunmod Network Development of EW-2: from B. Dorj Street to Tolgoit Road through Ard Ayush Avenue Network Development of Disaster Prevention Roads All road users in UB Improvement of the east-west transport corridor to strengthen mobility in Ulaanbaatar City, as well as to secure land and space for infrastructure development and urban rapid transit. Improvement of east-west arterial road to strengthen mobility in Ulaanbaatar City, as well as to secure land and space for infrastructure development and public transport. Improvement of north-south arterial road to strengthen mobility in Ulaanbaatar City, as well as to secure land and space for infrastructure development and public transport. Improvement of north-south arterial road to strengthen mobility in Ulaanbaatar City, as well as to secure land and space for infrastructure development and public transport. Improvement of north-south arterial road to strengthen mobility in Ulaanbaatar City, as well as to secure land and space for infrastructure development and public transport. Improvement of access to new international airport in the Khushigt valley and Zuunmod, Aimag center in Tov province. Improvement of east-west arterial road to strengthen mobility in Ulaanbaatar City, as well as to secure land and space for infrastructure development and public transport. Prevention of housing area and roads from storm water run-off or flash floods. X XXX 185.8
UTR-Rd-02
Road users in southern area of UB
XXX
164.9
UTR-Pt-01
UTR-Rd-03
Road users in central area of UB
XXX
37.6
UTR-Rd-04
XXX
12.3
On-going Japan Grant Aid Crossing
UTR-Rd-05
XXX
57.5
UTR-Rd-06
Road users in south of UB Metropolitan area and for airport
XXX
90.0
On-going New Airport Project
UTR-Rd-07
Road users in northern area of UB
XXX
86.4
UTR-Rd-01
UTR-Rd-08
Road users in northern area of UB and residents
XXX
109.6
UTR-Rd-07
150
Code
Project
Beneficiaries
Project Description Implementing Agencies Construction of a new road along the western dike of the Selbe River to strengthen the road network in UB-CBD. Improvement of north-south arterial road to strengthen mobility in Ulaanbaatar City, as well as to secure land and space for infrastructure development and public transport. Improvement of the north-south transport corridor to strengthen mobility in Ulaanbaatar City, as well as to secure land and space for infrastructure development and urban rapid transit. Improvement of the north-south arterial road to strengthen mobility in Ulaanbaatar City, as well as to secure land and space for infrastructure development and public transport. Improvement of the north-south arterial road to strengthen mobility in Ulaanbaatar City, as well as to secure land and space for infrastructure development and public transport. Improvement of the north-south arterial road to strengthen mobility in Ulaanbaatar City, as well as to secure land and space for infrastructure development and public transport. Development of full-control access road to secure mobility in Ulaanbaatar City. Development of Asian Highway to an international standard to complete international highway network. A comprehensive program to enhance the overall road maintenance capacity for UB city and the nation as a whole, including updating road inventories, technical improvement for betterment and upgrading works, restructuring of institutional and organizational systems. Modernization of machines and equipment for road maintenance is also facilitated.
UTR-Rd-09
Network Development of NS-3: Western dyke road of the Selbe River Network Development of NS-4: from Ikh Surguul Street to Olympic Street Network Development of NS-5: (from Sukhbaatar Street to Chinggis Avenue) Network Development of NS-9: from Chinggis Avenue to Tolgoit Road through Sonsgolon Road Network Development of NS-1: from Dari Ekhiin Ovoo to Narny Zam Network Development of NS-8: from Trade Union Street to Chinggis Avenue Development of Urban Expressway Development of Asian Highway No. 3
Road users in central area of UB and residents
XXX
7.9
UTR-Rd-10
XXX
67.3
UTR-Rd-11
All road users in UB
XXX
102.5
UTR-Rd-01
UTR-Rd-12
Road users in western area of UB
XXX
87.6
UTR-Rd-13
Road users in eastern area of UB
XXX
25.1
UTR-Rd-14
Road users in western area of UB
XXX
107.3
UTR-Rd-15
XXX
500.0
UTR-Rd-16
XXX
93.9
UTR-Pt-02
UTR-Rd-17
Capacity Development of Road Maintenance
XXX
XX
XX
166.0
151
Code
Project
Beneficiaries
Urban Transportation Program (Public Transport Projects)

UTR-Pt-01 LRT/BRT Development of the East-West Line (Red Line: Phase 1) LRT/BRT Development of the North-South Line (Blue Line: Phase 2) Public transport passengers Development of a mass-transit system along the main East-West Transport Corridors (27 km long), including stations s sub-centers, inter-modal facilities, workshop and related facilities/equipment. Development of mass-transit system along main north-southward transport corridors serving the city of Ulaanbaatar with the North-South Transport Corridor (18 km long). X X X XXX XXX X 1,107.3 UTR-Pt-03 UTR-Pt-08
UTR-Pt-02
Public transport passengers Railway cargo consignors, consignees, and forwarders of rail cargo, and passengers Railway cargo consignors, consignees, and forwarders of rail cargo
XX
XXX
792.0
UTR-Pt-01 UTR-Pt-03
UTR-Pt-03
Development of New Railway Bypass
Development of new railway line bypassing UB in the south of Bogd Khan Mountain.
XXX
200.0
UTR-Pt-04
UTR-Pt-04
Development of Railway Depots/Terminals at Tolgoit /Tolgoit
Development of cargo terminal and logistic center in the suburbs of Ulaanbaatar. Improvement of Smart Bus Stops: Replace 77 bus stops with newly designed better bus stop. Bus Location Information System: Provide bus location information at bus stop and through Internet. Installment of Transit Signal Priority System: Reduce delay of bus at signal by transit signal priority.
XXX
80.0
UTR-Pt-02
XXX
XXX
XXX 70.0
UTR-Pt-06 UTR-Pt-07 UTR-Pt-08 UTR-Pt-09
UTR-Pt-05
Bus Service Improvement Program
Bus passengers
Bus Route and Operation Schedule Rationalization Project: Develop mechanism to review and revise bus routes and schedules and implement them. Modernization Program of Bus Operators Fleet Renewal Program: Develop financial mechanism to introduce new bus fleets and study bus operating costs, impacts of bus fare hikes and other factors and revise bus fares.
XXX
XXX
152
Code
Project
Beneficiaries
Urban Transportation Program (Traffic Management Projects and Others)

One-way System in CBD: Modify and expand one-way system around Sukhbaatar Square. Signals will be updated and intersection geometry will be modified. Traffic Congestion Reduction Program UTR-Tm-01 (Comprehensive Traffic Management Improvement Project) Road users, Vehicle users and bus passengers and citizens in UB Turning Restriction along Peace Avenue: Prohibit left turn along Peace Avenue except at signalized intersections with left turn signal. On-street Parking Management at CBD: Designate parking and no-parking sections along streets in the CBD. Collect parking fees from on-street parking. Enforce no-parking regulation. Intersection Geometric and Engineering Improvement: Modify and improve intersection geometry and sidewalk at 45 selected intersections. Traffic Management Improvement in & around public markets: Apply traffic engineering solutions to ease traffic congestion in public market. Narantuul: Relocate entry and exit points and install signal. Bars: Construct parking and pedestrian crossing. 100 Ail: Improve sidewalk and construct parking at open spaces. Removal of Traffic Bottlenecks and Construction of Missing Links All road users using the intersections and Shoppers and vehicle users around market. Traffic Management Improvement Undsen HuuliEngels Bridge: Improve West Cross by upgrading signal and modifying geometry. Improve Seoul St Undsen Huuli intersection. Improve sidewalk and green spaces. Peace Ave Sukhbaatar St.: Modify intersection geometry and signal phase. Opening of Juulchin Street; and Widening of Western Section of Namy Zam. Elimination of 4 Staggered Intersections. X X XXX XX 82.0 UTR-Tm-03 X XXX 30.0 UTR-Tm-03
UTR-Tm-02
Construction of 4 Flyovers: at Sapporo; Bayanburd, Tuul Jin Pan, and Eastcross. Construction of 3 New Primary Links: Western Dike of Selbe River, Unur; Ajilchin to Chinggis.
153
Establishment of Mongolian National Transportation Research Center (MoNTREC) A center of knowledge and experience in traffic and transportation. Human Resource Development: Develop training curriculum and conduct training for both road administrators and enforcers. Establishment of a Traffic Management Coordination Committee for: UTR-Tm-03 Capacity Development of Traffic Management and Traffic Safety Promotion Program General public & road users; transport-related officials & agencies Coordination among the agencies concerned for better traffic management. Education and upgrading social norms on general public and drivers, etc. Formulation of a Traffic safety program, including: Accident analysis Development of Road safety audit and improvement measures. Road amenity green space: Improve sidewalk and provide green spaces to make walking and NMV more attractive and pleasant. X XXX XX XX X XXX 20.0 UTR-Tm-01 UTR-Tm-02 X XXX
154
Code
Project
Beneficiaries
Urban Water & Sanitation Program (Water)

UWS-Wr-01 Water Resource Protection UB City citizen To establish integrated watershed management including enforcement of water resource protection, conservation of water resource, development of monitoring network. To investigate new water resource area. UWS-Wr-02 New Water Supply Source Development Improvement of Water Supply Capacity UB City citizen To study possibility of surface water use. To construct a new water resource. UB City citizen To renovate old pumps to improve water intake capacity (300,000 ton/day) To establish water quality management guideline. UWS-Ws-02 Water Quality Monitoring and Management UB City citizen To establish and strengthen of the inspection system. To raise incentives on water quality protection. UWS-Ws-03 Water Supply Distribution Network Rehabilitation & Enhancement Project Water Demand Management Program Provision of Water in Ger areas UB City citizen To expand water supply network to serve new areas. To rehabilitate old pipes to improve capacity. UB City citizen UB City citizen in Ger area To promote installation of water meters, tariff reform, and Save Water campaign to citizens to conserve water. To construct water kiosks through track where water is not supplied within urbanization area X XXX XX 10.0 UWS-Ws-01 UWS-Ws-01 UWS-Ws-04 X X XXX XX 50.0 UWS-Ws-01 X XXX 4.0 EVM-Pc-02 X X XXX XX XX 30.0 UWS-Wr-02 X X XXX XX 290.0 UWS-Wr-01 UWS-Wr-02 X XX XXX 4.0 UWS-Ws-02 EVM-Pc-02
UWS-Ws-01
UWS-Ws-04
UWS-Ws-06
XXX
25.0
155
Code
Project
Beneficiaries
Urban Water & Sanitation Program (Sewerage System)

To extend capacity of existing CWWTP. UWS-Ss-01 Central Wastewater Treatment Plant (CWWTP) Capacity Enhancement New Wastewater Treatment Facility Development Industrial Wastewater Facility Improvement Sludge Treatment and Bio-energy Facility Development Rehabilitation of old pipelines of sewerage UB City citizen To develop sewage sludge treatment facility. To rehabilitate existing sewage pipelines, channels and drainage system. To develop new wastewater treatment facility (300,000 ton/day). To renovate Khargia industrial wastewater treatment facility, To develop a new industrial waste-water treatment facilities in the newly developed industrial estate. To develop sewage sludge treatment facility including bio-gas generation. To rehabilitate old pipes to improve capacity. To study environmental friendly household-based system such as combined type septic tank, ECOSAN. To promote above system including establishment of financial supporting system. To install water recycling system in wastewater treatment facilities (10,000 ton/day). To make guideline on water recycling and public awareness. UWS-Ss-01 UWS-Ss-02 X X XXX 120.0 UWS-Ss-02
UWS-Ss-02
UB City citizen UB Citizen, Business sector and factory
XX
XXX
110.0
UWS-Ss-01
UWS-Ss-03
XX
XXX
60.0
UWS-Ss-02
UWS-Ss-04
UB City citizen
XX
XXX
XX
40.0
UWS-Ss-01 UWS-Ss-02 UWS-Ss-03 UWS-Ss-01
UWS-Ss-05
UB City citizen
XX
XXX
50.0
UWS-Ss-06
Household-based sewerage treatment
UB City citizen in Ger area
XXX
40.0
UWS-Ss-07
Water Recycling Promotion Program
UB City citizen
XX
XXX
XX
20.0
Electric Power Program

EPW-Es-01 EPW-Es-02 EPW-En-01 Improvement of Electric Power Capacity New Power Supply System Development Electric Distribution Network Enhancement UB City citizen UB City citizen UB City citizen To renovate the existing power supply facilities. To study a new electric power source and develop feasible power system. To expand electric network and replace power cables to larger ones. x X X X X X X XXX XXX XX XX XX XXX XX X 55.0 400.0 6.5 EPW-En-01 EPW-Es-01 EPW-Es-01 EPW-Es-02
156
Code
Project
Beneficiaries
Priority S M ~2015 ~2020 XXX XX L ~2030 XX Cost (mil. US$) Related Projects
EPW-En-02
Construction and Rehabilitation of Power Substations Installation of Solar System to Governmental Facilities Electric Demand Management Program
UB City citizen
To construct and rehabilitate power substations. To save power by installing solar system devices, to begin with government buildings. To conduct a pilot project to introduce solar system. To reform the tariff structure, and promote a campaign for citizens to conserve water.
14.5
EPW-En-01
EPW-En-03
UB City citizen
XXX
XX
2.0
EPW-Es-02
EPW-Im-01
UB City citizen
XXX
XX
2.0
EPW-En-03
Heating System Program

HTS-Hs-01 New Heating Source Development Rehabilitation of Heat-only Boiler UB City citizen To establish heating supply facilities. To study renewable energy. To prioritize old type heat-only-boiler to be rehabilitated. To rehabilitate old type heat-only-boilers To develop small scale local network in residential area including: Construction of facilities. Development of a feasible operation and maintenance mechanism. To renovate the old heating pipes. To expand heating network and replace pipes to larger ones. To improve heat insulation materials and construction techniques for air condition improvement of buildings. To study feasible coal improvement technologies. HTS-He-02 Coal Quality Improvement Project UB City citizen in Ger area To establish semi-cokes, briquette production facility. To standardize coal quality. To promote improved coal including financial supporting system. X X X 6.0 HTS-Hs-01 HTS-He-01 HTS-Hn-02 X X X XXX XXX X X 80.0 50.0 HTS-Hs-02 HTS-Hn-02 HTS-Hn-01 X X XX XXX 120.0 X XXX XXX XXX 400.0 EPW-Es-02
HTS-Hs-02
UB City citizen
XXX
XX
HTS-Hs-03
Local Cluster Heating System Development
HTS-Hn-01 HTS-Hn-02
Rehabilitation of Old Pipelines for Heating Heating Distribution network Enhancement Improvement of Heat-efficiency of Buildings
UB City citizen UB City citizen Building contractor, UB City Citizen
HTS-He-01
XXX
2.0
XXX
157
Code
Project
Beneficiaries
Project Description Implementing Agencies To study stove improvement technology.
HTS-He-03
Dissemination of Improved Quality Stove
To standardize coal quality. To promote improved coal including financial supporting system. To reform existing heating tariff structures to improve financial status of the heating company.
XXX
3.5
HTS-Im-01
Heating Tariff Structure Reform
UB City citizen
XXX
Solid Waste Management Program

Improvement of Solid Waste Dumping Sites and Enhancement of the Management To construct sanitary landfill facilities including bio-gas generation system. UB City citizen To establish guidelines on a monitoring and inspection system. To develop and strengthen regulation on waste dumping. To sort out recyclable waste and non-recyclable ones. To separate combustible and non-combustible waste. To establish garbage collection network with procurement of garbage trucks and employment of necessary personnel. To study an appropriate collection fee system. To promote a campaign on the benefits of waste reduction. Solid Waste Recycling System Development Waste-to-Energy Generation Project To establish a feasible waste recycling system, including institutions, waste separate facilities, recycle markets, people's awareness to recycling, etc. To establish a bio-gas power generation plan, using solid waste. To study coal ash recycling technology. SWM-Rs-03 Coal-ash Recycling Project UB City citizen To establish coal ash collection network. To promote coal ash recycling. SWM-Rs-04 Construction Waste Recycling Project UB City citizen To recycle construction waste including those from demolished buildings and construction works X X X XX XXX 6.5 X X X XX XXX X X XX XXX 5.7
SWM-Gc-01
SWM-Gc-02
Construction of Solid Waste Separation Facilities
UB City citizen
XX
XXX
9.0
SWM-Gc-03
Garbage Collection System Improvement
UB City citizen
XXX
XX
XX
15.0
SWM-Rs-01
UB City citizen
XXX
XX
SWM-Rs-02
UB City citizen
XX
XXX
158
Code
Project
Beneficiaries
Project Description Implementing Agencies To establish guideline on education and campaign program. To provide education materials.
Support Scheme TA X FA PPP
Priority S M ~2015 ~2020 XXX L ~2030 Cost (mil. US$) Related Projects
SWM-Im-01
Education and campaign of solid waste management
UB City citizen
2.0
Housing and Housing Policy Enhancement Program

HSG-Lh-01 Guideline Development of Low-cost Housing Building contractor, UB City Citizen in Ger area HSG-Ts-01 To study and develop functional guidelines for low-cost housing supply. Two new town developments (UB West:700ha; and UB South: 750ha) to be initiated by a public entity for all segments from low- to high-income groups with sufficient infrastructures and urban functions such as higher education institutes and commercial and business areas to create employment. Housing financing scheme shall be linked with this project. Provision of 20,000 social housing units to be constructed by Social Housing Corporation until 2020 along with new town development and in association with ger area improvement projects. To provide rental apartments for residents in the short-term to meet different patterns of housing demands (10,000 units). To provide special land areas with minimum utilities and services until permanent settlements (8,000 units). To enhance social housing provision and supply capacity while reforming of the financing system for low income households. To enhance the housing development fund with financial engineering methodologies such as housing bond issuance. X X XXX HSG-Ts-02, HSG-Sh-03, LEV-Ep-01
HSG-Lh-02
New Town Development by a Public Entity
UB citizens and migrants, including all income groups.
XXX
XXX
730.0
HSG-Lh-01, HSG-Sh-03, HSG-Sh-01, HSG-Hq-02
HSG-Sh-01
Social Hosing Development Project (20,000 units)
UB citizens, particularly low and middle income groups and migrants Low income households, students and single families Migrants, resettled households
XX
XXX
410.0
HSG-Lh-02, HSG-Sh-03
HSG-Sh-02
Provision of Rental Apartments Temporary Housing Area Development for Resettled Households
XX
XX
180.0
HSG-Lh-01, HSG-Sh-03 LEV-Ce-01, ADM-Df-01, ILG-Ud-04,
HSG-Sh-02
XXX
84.0
HSG-Sh-03
Reform/Restructure of Mongolian Housing Financing Company (MHFC)
Low income households, Migrants, resettled households
XXX
HSG-Lh-01, HSG-Sh-01, HSG-Sh-02
159
Code
Project
Beneficiaries
Project Description Implementing Agencies To reform the existing building code and update modern standards to apply present building structure and materials, in consideration of anti-earthquake structures. To introduce design and supervision system to monitor and improve construction process. To improve heat insulation material and construction techniques for air condition improvement of buildings. To strengthen and enhance capacity and activities of apartment management bodies to maintain and improve buildings, facilities and communities.
HSG-Ts-01
Reform of Building Code and Construction Supervision System
Building contractors and UB City citizens
XXX
HSG-Lh-01 HSG-Ts-02 LEV-Hq-01 LEV-Ep-01 HSG-Lh-01 HSG-Ts-01 LEV-Hq-02 LEV-Ep-01 HSG-Sh-02 LEV-Hq-01
HSG-Ts-02
Improvement of Heat efficiency of Housing Buildings Management guideline of apartments
Building contractor, UB City Citizen
XXX
3.0
HSG-Cd-01
UB City Citizen in apartment area
Living Environment Improvement Program

LEV-Hq-01 Rehabilitation of Old Apartments Promotion of New Technologies for Energy-saving and Eco-housing Development Raising Awareness of Environmental ad Living Condition Improvement Community & City Parks and Open Space Development UB City Citizen in apartment area UB City citizen in Ger area To rehabilitate degraded apartments and facilities (65,800 units up to 2030) To study appropriate technology for Eco-house. To promote Eco-house system. To establish financial supporting system for installing Eco-house system. To provide guideline of education and public awareness raising for environmental protection. To plan community parks and open space in land readjustment plan and urban redevelopment plan To share land plots to secure community park and open spaces (a total of 200 ha) To plan multiple usage and rules of schools for neighborhood X X XX XXX XX 20.0 HSG-Lh-02, HSG-Ts-02 HSG-Lh-01, HSG-Ts-01, HSG-Ts-02 X X XX XX XX 600.0 HSG-Ts-01, HSG-Cd-01
LEV-Hq-02
LEV-Ep-01
UB City citizen
XXX
2.0
LEV-Pf-01
Children, UB City citizen
XX
40.0
ADM-Go-01
LEV-Pf-02
Promotion of Community-based School Facilities
Children, UB City citizen
XX
50.0
HSG-Ep-01, SSI-Ed-01, SSI-Ed-02, ADM-Df-03
160
Code
Project
Beneficiaries
LEV-Ce-01
Establishment of Support to Community-based Organizations for Environmental Improvement and Social Activities Establishment of A Participatory Land and Immovable Asset Assessment System
To activate community activities based on CBO for living condition improvement.
XXX
XX
XX
10
LEV-Ep-01, LEV-Pf-01, DFS-Fs-02
LEV-Ce-02
To formulate an agreeable system for land and immovable assets value assessment to facilitate Community-driven Ger area improvement activities
XXX
0.2
LEV-Ep-01, LEV-Pf-01, DFS-Fs-02
Environmental Management Program

To clarify and classify land degraded areas on natural environmental conditions. EVM-Ne-01 Development of Forest Protection Management and Monitoring System Government staff in charge of forest protection management To provide and promote guidelines for natural environmental protection. To regulate land use in the designated protection areas. To establish and strengthen a monitoring system with enforcement power against illegal use. Development of Air Quality Management and Monitoring System Government staff in charge of air quality management Government staff in charge of water quality management To develop emission standard enforcement. To establish and strengthen air quality monitoring system with power on enforcement against violators. To develop discharged water standard enforcement. To establish and strengthen water quality monitoring system with enforcement power against violations To coordinate among Ministry of Natural and Environment, other government bodies and private sector. To promote necessity of environmental assessment. To increase number of inspectors for EIA inspector. X XXX XX X 2.0 X XXX XX X 3.0 X 4.0
XXX
XX
EVM-Pc-01
EVM-Pc-02
Development of Water Quality Management and Monitoring System
EVM-Ea-01
Capacity Development on Management of the EIA System
Government staff in charge of EIA
XX
XX
XX
1.0
161
Code
Project
Beneficiaries
Urban Amenity & Disaster Management Program

To examine and prepare a hazard map indicating flood prone risky areas and environmentally vulnerable areas. ADM-Df-01 Enforcement of Relocation from Flood Prone Areas UB City citizen To prepare regulations to prohibit human settlements in high risky areas. To prepare a resettlement plan to relocate residents in high risky areas (15,000 units). To rehabilitate and extend storm water drainage canals and the entire system. Rehabilitation of Strom Water Drainage Canals and the Entire System To facilitate drainage canal protection from waste dumping. To construct disaster prevention roads. To construct and rehabilitate flood dams, reservoirs and/or dykes. To establish underground reservoir under road. To provide a hazard map, indicating flood prone areas To develop a community-based evacuation manual, including an information dissemination system, locations of evacuation route and places, stocking of basic commodities and rehabilitation assistance in case of occurrence of disaster such as flood and earthquake. To provide awareness of the importance of the community-based preparedness against disasters. To prepare regulations and/or a legal enforcement system against human settlements and economic activities in disaster-risky areas. To develop a flood warning system. X X XXX XX X 200.0
ADM-Df-02
UB City citizen
XXX
XX
60.0
UTR-Rd-08
ADM-Df-03
Promotion Program of Community-based Preparedness against Disaster
UB City citizen
XXX
3.0
162
Code
Project
Beneficiaries
Project Description Implementing Agencies To improve road network and widen roads for emergency vehicles in the Ger areas. To reform and strengthen regulations on land use and maintain adequate roads and open space. To facilitate development of city parks, community parks, green areas and open space to be reserved.
ADM-Df-04
Road Improvement and Emergency Vehicles Procurement Program
XX
XX
XX
60.0
ADM-Go-01
City Parks and Green Network Development Project
To develop a green network in UB City with these parks and green areas, based on the Master Plan. UB City citizen To monitor Land Use Zoning with enforcement against illegal construction and development activities. To regulate green area development by construction permission, development permission, etc. X XXX XX 40.0
ADM-Go-02
Promotion of a Campaign for Greening Buildings and Streets
UB City citizen
To study appropriate greening technique to meet UBs natural climate and environment. To promote green building and street techniques. To establish a financial support system.
XX
XXX
XX
2.0
Social Service Improvement Program

SSI-Ed-01 Development of Planning Standard and Guidelines of Educational Facilities Acceleration Program for Pre-school and School Facility Development Development of Planning Standard and Guidelines of Health Care Facilities Acceleration Program for Health Care Facility Development UB City citizen To develop planning standards and guidelines for educational facilities under a catchment service area concept. To facilitate construction of pre-schools and other schools to meet development guidelines (100 places for 6,000 pupils). To develop planning standards and guidelines for health care facilities under a catchment service area concept. To facilitate construct ion of clinics, hospitals and/or medical service facilities to meet the development guidelines above (120 primary Health Center). X X XXX 0.5 HSG-Ts-01 LEV-Df-02 SSI-Ed-02 HSG-Ts-01 SSI-Ed-01 LEV-Pf-02 HSG-Ts-01 SSI-He-02
SSI-Ed-02
Students
XX
XX
XX
200.0
SSI-He-01
UB City citizen
XX
0.5
SSI-He-02
Patients and UB City Citizens
XX
XX
XX
200.0
SSI-He-01
163
Code
Project
Beneficiaries
Institutional & Legal-base Development Program

Legal Enhancement of Urban Planning and Urban Development-related administration Introduction of Property Assessment Land Valuation Systems To assist the MRTCUD in reviewing existing laws: urban development laws, housing laws, and land law. And in the making of new laws on urban development: land readjustment, urban redevelopment, new town development, land compulsory expropriation, etc.. To establish a new land valuation standards and introduce a declared land value system. To provide practical training for Urban Growth Management mechanisms applicable for the market economy. Training Program for Urban Planning Administration and Capacity Building for Realizing the UB Master Plan 2030 To provide basic knowledge of legal framework and guidelines related to urban planning administration and enforcement. To provide practical systems training on land readjustment project, urban redevelopment project, new town development project, community development. To provide appropriate and rational norms on permission and the monitoring of construction administration and land development activities. Development of Resettlement Policy and Plan UB City citizen, UB City To define clear resettlement conditions and enforcement measures including support measures. To develop a resettlement plan prioritizing resettlement areas and its implementation measures. To formulate the community and public service development guidelines under a neighborhood unit concept To facilitate a community-driven activities for public service provision in cooperation with UB City government. HSG-Sh-02, ADM-Df-01 X XXX XX XX 8.0
ILG-Ud-01
MRTCUD, UB City
XXX
1.5
ILG-Ud-02
MRTCUD, UB City
XXX
3.0
ILG-Ud-03
MRTCUD, UB City, NGOs, and Related Agencies
ILD-Ud-04
XX
XX
ILD-Ud-05
Development of Neighborhood Area Development Plan (NADEP) for Ger Area Improvement
UB City citizen, UB City
XXX
XX
HSG-Sh-02, ADM-Df-01
164
Code
Project
Beneficiaries
Project Description Implementing Agencies To formulate institutional guidelines encouraging a Community-driven Ger Area improvement Projects based on a concept of Land Readjustment though Pilot Projects. To assist related ministries and agencies in establishing:
ILD-Ud-06
Establishment of an Institutional System of Land Readjustment (Land Pooling) System
UB City citizen, UB City
XXX
XX
HSG-Sh-02, ADM-Df-01
ILG-Hs-01
Institutional Development for Social Housing Policies and Programs
MRTCUD, MSWL, UB City, MOF, Bank of Mongolia, MHFC
Housing Development Financing Institution (HDFI); Social Housing Corporation (SHC); and, Community Organizations Development Institute (CODI).
XXX
XX
1.0
ILG-Hs-02
Financial Capacity Building Related to Social Housing Development
MRTCUD, MOF, Bank of Mongolia MRTCUD, UB City, Building Material Manufacturers Association and other construction-related business sector
To develop a framework on Financial Resources for Housing Development Fund to be utilized for social housing for low income households. To develop a self-help housing construction system for poor households. To facilitate R & D activities in the universities for affordable and energy-efficient construction materials. To provide a number of model houses to replace the Ger settlements. To establish basic policies fostering the construction business sector in Mongolia. To encourage the production of basic construction materials such as cement & iron through the provision of incentives for the investment. To provide vocational education programs for the construction sector.
XXX
2.0
ILG-Hs-03
Facilitation of a Self-Help Housing Construction System
XXX
XX
XX
6.0
ILG-Cs-01
Business Development Policy to Strengthen the Construction-related Sector
MRTCUD, MOF, National Railway, Building Material Manufacturer's Association
XXX
xx
10.0-
165
Code
Project
Beneficiaries
Development Financing System

Property-related Taxation: To examine the possibility of imposing a property related tax on property owners and to formulate an imposition system. Urban planning taxation: To examine the possibility of imposing an urban planning tax on property owners and to formulate an imposition system. Fiscal management system: To formulate an efficient fiscal management system to improve the Citys credit worthiness and allow it the ability to borrow on a long term basis from capital markets. To formulate a community fund system for improvement of the Ger areas and the redevelopment of built-up areas. To formulate various value capture methods imposed on beneficiaries of infrastructure development such as mass rapid transit, expressway, and integrated urban corridor, including the application of Transfer of Development Right (TDR). To examine the feasibility of bond issuance by UB City for capital financing of infrastructure projects. To examine the feasibility of establishing a UB Infrastructure Financing Public Corporation that shall specialize in financing infrastructure development in UB City. Possible fund sources: 1) mining revenues; 2) bonds; 3) pension funds, and 4) external donors funds. To examine thoroughly existing public service tariff structures (water, heating, power, sewage, solid waste disposal, etc) and come up with an adequate subsidy system in consideration of: Full or partial cost recovery structures under the market mechanism; and, Public Service Privatization. Preparation of Implementation Framework for PPP-based Public Service and Urban Development Projects UB City, General tax payers, private sector To formulate an appropriate and applicable implementation framework on a Public Private Partnership (PPP) public service and urban development projects, including institutional and legal frameworks and procurement procedures. DFS-Fs-05 DFS-Fs-06 X XXX XX 2.0 DFS-Fs-07 DFS-Fs-08 DF-Fs-09
DFS-Fs-01
Financial Basis Enhancement Program of UB City Government
UB City and UB Citizens
DFS-Fs-02
Formulation of Community-based Financing System
Ger Area residents, UB City residents in general UB City, General tax payers
XXX
XX
DFS-Fs-07
DFS-Fs-01 X X XX XXX XX DFS-Fs-08 DF-Fs-09 X DFS-Fs-01 DFS-Fs-07 DFS-Fs-01 X XX XXX 1.5 DFS-Fs-02 DFS-Fs-05 DFS-Fs-06
DFS-Fs-05
Formulation of Value Capture Methods for UB City Exploration of Long-term City Bond Issuance by UB City Establishment of the UB Infrastructure Financing Public Corporation
DFS-Fs-06
UB City, General tax payers
XXX
DFS-Fs-07
UB City, General tax payers
DFS-Fs-08
Comprehensive Policy Reform of Public Service Tariff Structure
UB City residents and all public service providers and managers
XXX
1.0
DFS-Fs-01 DFS-Fs-05
DF-Fs-09
XXX
XXX
XXX
.0
166
12.3 Priority Projects (Short-List) and Profiles

1) Short-term Development Targets
An intermediate milestone in the short-tem toward the final goal in 2030 was considered to be the year 2015. General targets in the short-term are twofold: (a) to make steady steps toward the final goals; and (b) to establish a fundamental institutional mechanism to ensure a sustainable and balanced growth with the implantation of the Master Plan. Attainments to be realized by 2015 are envisaged as follows: (1) Officially approved Ulaanbaatar City Master Plan 2030 functions well as guidelines of the rational and transparent administration for issuance of permissions of land registration building construction, development projects and environmental management. (2) Some of laws, regulations and institutional systems necessary for urban planning and land use management have been built as effective and workable administrative tools. (3) Ulaanbaatar City has a responsible urban planning section to facilitate citizens participation in improvement of living conditions in Ger areas and purse the Public Private Partnership (PPP) to accelerate development and provision of infrastructures, urban utilities and public services. (4) Steady steps to solve chronic and crucial urban problems in Ulaanbaatar City have been made by implementing the Master Plan 2030. In particular, there are noteworthy progress in the following four (4) sectors: With the implementation of the short-term program addressed in the Master Plan, traffic congestion is somewhat alleviated. A notable change appears in the modernized traffic control system, with which traffic flows are rectified, thereby resulting in safe transport in the city. In addition, new mass transit system (Ulaanbaatar Rapid Transit: URT) is under construction along Peace Avenue, and development activities at/around the station areas appear active. The water supply system has been improved in Ger areas in particular along with living environmental improvement projects. One of the most important projects in the water sector, which is the development of new water resources, is steadily carried out in association with the progress of afforestation in the comprehensive water-shed conservation program. Social Housing Cooperation functions to provide low-income households with affordable housing units and rental houses under a Comprehensive Social Housing Program which includes housing financial supports. The housing market efficiently and stably works, as the construction industry have been encouraged with a strong government policy. Environmental projects are going-on with a few donors supports. Among them, it is noted that the Central Waste Water Treatment Plant have been rehabilitated and expanded in its treatment capacity, and that cluster systems for industrial waste water
167
treatment to serve the designated industrial zones are being developed. In addition, a peoples movement for 3Rs (reduction, recycling, reuse) is proactive. (5) Some practical models for improvement of Ger areas, which are based on a community-driven approach, have been built and a number of projects using the models are being carried out in collaboration with communities and Ulaanbaatar City. Priority projects need to contribute to attainment the status as described above.
2) Sector Priority Concept

Since the city is a composite urban agglomeration, all sectors are equally important and mutually related to each other. Therefore, priority among sectors will not be considered. Instead, a priority concept is assumed by taking into account the most crucial subsectors for the respective planning issues: Table 12.4 Concept of Priority Subsectors for Planning Issues
Code Planning Issue Sector Highest Priority Subsectors Industrial Relocation and Collectivization UED Urban Economic Enhancement Tourism Sector Enhancement Sub-center Development UTR Urban Transportation Road Traffic Bottlenecks Alleviation and Traffic Management Public Transport System Improvement IFR HSG Infrastructures and Utilities Housing and Housing Policy Enhancement; Urban Environment Water-related Utilities (Water Supply and Sewerage) Energy Supply Management System Ger Area Improvement Social Housing Development Air Pollution Mitigation UEM Disaster Management Urban Amenity Improvement SSI Social Service Improvement; Institutional & Legal-base Development and Governance Education and Health Care Facilities Development in Communities Development of Urban Planning-relayed Acts Capacity Development in Urban Planning and Development Management Enhancement of Municipal Financing Capacity DFS Development Financing System Housing Financing Mechanism for Lower Income Households
ILG
3) Criteria of Prioritization
The prioritization process is important to envision a rational phased development under limited budgets and capacities. In general, the most crucial criterion is economic feasibility of the investment, based on a cost/benefit analysis. However, it is not easy to economically evaluate all projects over different sectors. Instead, an implicit evaluation is carried out based on five (5) criteria, as follows:
168
Coherence with Visions; Urgency; Necessity (needs); Implicit Feasibility; and Social Acceptance.
Coherence with Visions: Although all proposed projects must be relevant to the visions for Ulaanbaatar City, which were envisaged in the first stage of the planning process, the more relevant projects to achieve the visions should be given higher priority. Urgency: Needless to say, projects that are expected to contribute to more urgent issues should be given higher priority. Necessity: All proposed projects are considered based on the needs of Ulaanbaatar citizens which were indentified through the household interview survey and a series of technical working group meetings and community consultation meetings. However, projects that can more widely and more greatly respond to peoples needs may be given higher priority. Implicit Feasibility: Technical and institutional feasibilities need to be considered for prioritization, because these factors are closely related to the implementability and sustainability of a project. This criterion is not necessarily tangible but implicit. Social Acceptance: Projects which are accepted by all may be given a higher priority. However, there are projects that are highly necessary for society, but are not welcome by the public. The restructuring of tariff structures for public services, such as bus fares or electric bills, is a case in point. Priority shall be considered in balancing both sides of these needs. Each project proposed in the long list (Table 12.3) was evaluated through a scoring method, referring to these five (5) criteria, as shown in Table 12.5. Projects that are the most relevant to the respective criteria are given the highest score, 3. On the contrary, those whose impacts are not necessarily expected are given the lowest score, 1. In cases where neither 3, nor 1, is given a middle score, 2, applied. Thus, each project has a total score when summed up. However, the score of Urgency is counted double in consideration of the importance of the time factor in the priority.
4) Selection of Priority Programs/Projects

Priority projects were selected, taking into account the total score derived from the scoring method as well as the sector priority concept. A total of 50 projects, as summarized in Table 12.6, are proposed to be urgently implemented. For the 50 projects, the investment cost will total US$2,700 million, or 27% of the total cost estimated for all projects/programs. Strategic budget is expected to be appropriated to commence the preparation of these projects by the Mongolian Government and Ulaanbaatar City Government as soon as practicable. These priority programs/projects are to be accomplished until, or be in service, by the target year 2015. The donor community is also expected to support in initiating the project implementation in close collaboration with the government.
169
Table 12.5
Priority Scoring Evaluation for Proposed Projects

(1/5) Criteria for Priority
1)
Schedule
Social Acceptance Total Weighted Score
Sector
Code
Project
Environt'l Impact
2)
Coherance with Visions
Urgency
Needs
Feasibility
Short ~2015
Medium ~2020
Long ~2030
UED: Urban Economic Enhancement
Relocation and Collectivization Project Id-01 for Local Processing Industries (Industrial Park Development) Bc-01 Improvement of Incubation Facility Project Commercial & Business Sub-centers Development Development of ICT and Knowledge Industry Center Development of Underground Shopping Arcade Improvement of Tourism Information Provision Project
17
Sc-01
11
Sc-02
16
Sc-03
13
Tm-01
18
UTR: Urban Network Development of EW-1 (from Transportation Rd-01 Gachuurt to 22Km-post through (Road) Peace Avenue) Network Development of EW-3 Rd-02 (Bayanzurkh to Road to Thermal Power Station No.4 through Narny Zam) Network Development of NS-2 Rd-03 (Eastern section of Middle Ring Road) Rd-04 Network Development of NS-6 (from Ikh Toyruu to Engels Street)
14
14
14
14
Network development of NS-7 (from Rd-05 Chinggis Avenu to Ard Ayush Avenue through Ajilchin Street) Development of Highway to Connect Rd-06 Ulaanbaatar City to New Airport and Zuunmod Network Development of EW-2 (from B. Rd-07 Dorj Street to Tolgoit Road through Ard Ayush Avenue) Rd-08 Network Development of Disaster Prevention Roads Network Development of NS-3 (Western dyke road of the Selbe River) Network Development of NS-4 (from Ikh Surguul Street to Olympic Street) Network Development of NS-5 (from Sukhbaatar Street to Chinggis Avenue)
14
16
10
10
Rd-09
10
Rd-10
10
Rd-11
10
Network Development of NS-9 (from Rd-12 Chinggis Avenue to Tolgoit Road through Sonsgolon Road) Rd-13 Network Development of NS-1 (from Dari Ekhiin Ovoo to Narny Zam) Network Development of NS-8 (from Trade Union Street to Chinggis Avenue)
10
10
Rd-14
10
Rd-15 Development of Urban Expressway
11
Rd-16 Development of Asian Highway No. 3
10
Rd-17
Capacity Development of Road Maintenance
3 3 2 1 PP P n N NN
18
Notes: 1) Decision of Scoring:
Most relevant and/or suitable Modarately relevant and/or suitable Fairly relevant and/or suitable Greatly positive impact or improved Positive impact or improved None Slightly negative impact anticipated Negative impact anticipated Cruicially negative impact anticipated
2) Environmental Impact:
3) Those writen in bold letters with shaded cell stand for selected "Priority Projects/Programs"
170
(2/5) Criteria for Priority Sector Code Project

Coherance with Visions Urgency Needs
1)
Schedule
Environt'l Impact
2)
Feasibility
Short ~2015
Medium ~2020
Long ~2030
UTR: Urban LRT/BRT Development of the EastTransportation Pt-01 West Line (Phase 1) (Public Transport) LRT/BRT Development of North-South Pt-02 Line (Phase 2)
17
PP
11
PP
Pt-03 Development of New Railway Bypass
11
Pt-04
Development of Railway Depots/Terminals at Tolgoit /Tolgoit
15
Pt-05 Bus Service Improvement Program UTR: Urban Traffic Congestion Reduction Transportation Tm-01 Program (Comprehensive Traffic (Traffic Management Improvement Project) Management and Others) Removal of Traffic Bottlenecks and Tm-02 Construction of Missing Links Capacity Development of Traffic Tm-03 Management and Traffic Safety Promotion Program UWS: Urban Water & Sanitation (Water) Wr-01 Water Resource Protection
18
18
PP
18
18
16
PP
Wr-02
New Water Supply Source Development Improvement of Water Supply Capacity Water Quality Monitoring and Management Water Supply Distribution Network Rehabilitation & Enhancement Project
18
Ws-01
18
Ws-02
14
Ws-03
15
Ws-04 Water Demand Management Program
16
Ws-05 Provision of Water in Ger areas UWS: Urban Water & Sanitation (Sewerage System)
16
Ss-01
Central Wastewater Treatment Plant (CWWTP) Capacity Enhancement New Wastewater Treatment Facility Development Industrial Wastewater Facility Improvement Sludge Treatment and Bio-energy Facility Development Rehabilitation of old pipelines of sewerage Household-based sewerage treatment
16
PP
Ss-02
12
Ss-03
14
PP
Ss-04
11
Ss-05
16
PP
Ss-06
14
Ss-07 Water Recycling Promotion Program Notes: 1) Decision of Scoring:
3 3 2 1 PP P n N NN
11
PP
171

1)
Schedule
Environt'l Impact
2)
Feasibility
Short ~2015
Medium ~2020
Long ~2030
EPW: Electric Power Es-01 Improvement of Electric Power Capacity
16
Es-02
New Power Supply System Development Electric Distribution Network Enhancement Construction and Rehabilitation of Power Substations Installation of Solar System to Governmental Facilities
17
NN
En-01
14
En-02
14
En-03
12
Im-01 Electric Demand Management Program HTS: Heating System
16
Hs-01 New Heating Source Development
13
NN
Hs-02 Rehabilitation of Heat-only -Boiler
14
Hs-03
Local Cluster Heating System Development Rehabilitation of Old Pipelines for Heating Heating Distribution network Enhancement Improvement of Heat-efficiency of Buildings
11
Hn-01
16
Hn-02
14
He-01
11
PP
He-02 Coal Quality Improvement Project
15
He-03
Dissemination of Improved Quality Stove
14
Im-01 Heating Tariff Structure Reform SWM: Solid Waste Management Improvement of Solid Waste Gc-01 Dumping Sites and Enhancement of Management Gc-02 Construction of Solid Waste Separation Facilities Garbage Collection System Improvement Solid Waste Recycling System Development
15
13
13
Gc-03
17
Rs-01
15
Rs-02 Waste-to-Energy Generation Project
10
Rs-03 Coal-ash Recycling Project
10
Rs-04 Construction Waste Recycling Project
11
Im-01
Education and campaign of solid waste management
2 3 2 1 PP P n N NN
15
PP
172

1)
Schedule
Environt'l Impact
2)
Feasibility
Short ~2015
Medium ~2020
Long ~2030
HSG: Housing Guideline Development of Low-cost and Housing Lh-01 Housing Policy Enhancement New Town Development by a Public Lh-02 Entity Social Housing Development Project (20,000 units)
17
12
Sh-01
15
Sh-02 Provision of Rental Apartments Temporary Housing Area Sh-02 Development for Resettled Households Sh-03 Reform/Restructure of Mongolian Housing Financing Company (MHFC) Reform of Building Code and Construction Supervision System Improvement of Heat efficiency of Housing Buildings
14
14
16
Ts-01
13
Ts-02
13
Cd-01 Management Guideline of Apartments LEV: Living Environment Improvement
12
Hq-01 Rehabilitation of Old Apartments Promotion of New Technologies for Hq-02 Energy-saving and Eco-housing Development Ep-01 Raising Awareness of Environmental and Living Condition Improvement Community & City Parks and Open Space Development Promotion of Community-based School Facilities
15
10
PP
18
Pf-01
15
Pf-02
13
Establishment of Support to Ce-01 Community-based Organizations for Environmental Improvement and Social Activities Establishment of Participatory Land Ce-02 and Immovable Asset Assessment System EVM: Development of Forest Protection Environmental Ne-01 Management and Monitoring System Management Pc-01 Development of Air Quality Management and Monitoring System Development of Water Quality Management and Monitoring System Capacity Development on Management of the EIA System Enforcement of Relocation from Flood Prone Areas Rehabilitation of Storm Water Drainage Canals and the Entire System Promotion Program of Communitybased Preparedness against Disaster Road Improvement and Emergency Vehicles Procurement Program
17
14
14
PP
17
PP
Pc-02
15
Ea-01 ANM: Urban Amenity & Disaster Management
15
Df-01
11
Df-02
12
Df-03
13
Df-04
2 3 2 1 PP P n N NN
14
173

1)
Schedule
Environt'l Impact
2)
Feasibility
Short ~2015
Medium ~2020
Long ~2030
ANM: Urban City Parks and Green Network Go-01 Amenity & Development Project Disaster Management Promotion of a Campaign for Greening (cont'd) Go-02 Buildings and Streets SSI: Social Service Improvement Development of Planning Standard Ed-01 and Guidelines of Educational Facilities Ed-02 Acceleration Program for Pre-school and School Facility Development
15
13
PP
17
13
Development of Planning Standard He-01 and Guidelines of Health Care Facilities He-02 Acceleration Program for Health Care Facility Development
17
14
ILG: Legal Enhancement of Urban Institutional & Ud-01 Planning and Urban DevelopmentLegal-base related administration Development Ud-02 Introduction of Property Assessment Land Valuation Systems
16
16
Training Program for Urban Planning Ud-03 Administration and Capacity Building for Realizing the UB Master Plan 2030 Ud-04 Development of Resettlement Policy and Plan
18
10
Development of "Neighborhood Area Ud-05 Development Plan (NADEP)" for Ger area improvement Establishment of Institutional System for Ud-06 Land Readjustment/ Land Pooling (by Implementing of Pilot Projects) Hs-01 Institutional Development for Social Housing Policies and Programs Financial Capacity Building Related to Social Housing Development Facilitation of a Self-Help Housing Construction System
15
15
17
Hs-02
17
Hs-03
Business Development Policy to Cs-01 Strengthen the Construction-related Sector DFS: Development Financing System Fs-01 Financial Basis Enhancement Program of UB City Government Formulation of Community-based Financing System Formulation of Value Capture Methods for UB City Exploration of Long-term City Bond Issuance by UB City Establishment of the UB Infrastructure Financing Public Corporation Comprehensive Policy Reform of Public Service Tariff Structure Preparation of Implementation Framework for PPP-based Public Service and Urban Development Projects
14
12
Fs-02
15
Fs-03
12
Fs-04
13
Fs-05
14
Fs-06
15
Fs-07
18
3 2 1 PP P n N NN
174
Table 12.6
Summary of the Priority Programs/Projects

(1/2)
Sector UED:Urban Economic Enhancement
Code Bc-01 Sc-02 Tm-01
Project Improvement of Incubation Facility Project Development of ICT and Knowledge Industry Center Improvement of Tourism Information Provision Project Network Development of EW-1 (from Gachuurt to 22Kmpost through Peace Avenue) Network Development of EW-3 (Bayanzurkh to Road to Thermal Power Station No.4 through Narny Zam) Network Development of NS-2 (Eastern section of Middle Ring Road) Network Development of NS-6 (from Ikh Toyruu to Engels Street) Network development of NS-7 (from Chinggis Avenu to Ard Ayush Avenue through Ajilchin Street) Development of Highway to Connect Ulaanbaatar City to New Airport and Zuunmod Capacity Development of Road Maintenance LRT/BRT Development of the East-West Line (Phase 1) Bus Service Improvement Program Traffic Congestion Reduction Program (Comprehensive Traffic Management Improvement Project) Removal of Traffic Bottlenecks and Construction of Missing Links Capacity Development of Traffic Management and Traffic Safety Promotion Program New Water Supply Source Development
Executing Schedule Cost Short Mediu Long Estimate ~2015 m ~2030 (US$ mill.) 20.0 50.0 5.0 185.8 164.9 37.6 12.3 57.5 90.0 166.0 300.0 70.0 30.0 82.0 20.0 290.0 30.0 10.0 120.0 30.0 30.0 40.0 250.0 100.0 0.0 40.0 6.0
UTR: Urban Transportation (Road)
Rd-01 Rd-02 Rd-03 Rd-04 Rd-05 Rd-06 Rd-17
UTR: Urban Transportation (Public Transport) UTR: Urban Transportation (Traffic Management and Others)
Pt-01 Pt-05 Tm-01 Tm-02 Tm-03
UWS: Urban Water & Sanitation (Water)
Wr-02
Ws-01 Improvement of Water Supply Capacity Ws-04 Water Demand Management Program
UWS: Urban Water & Sanitation (Sewerage System)
Ss-01 Ss-03 Ss-05 Ss-06
Central Wastewater Treatment Plant (CWWTP) Capacity Enhancement Industrial Wastewater Facility Improvement Rehabilitation of old pipelines of sewerage Household-based sewerage treatment New Power Supply System Development New Heating Source Development Rehabilitation of Heat-only -Boiler Heating Distribution network Enhancement Coal Quality Improvement Project
EPW: Electric Power HTS: Heating System
Es-02 Hs-01 Hs-02 Hn-02 He-02
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(2/2)
Sector SWM: Solid Waste Management Code Gc-01 Gc-03 Rs-01 HSG: Housing and Housing Policy Enhancement Sh-01 Sh-02 Sh-03 LEV: Living Environment Improvement Ep-01 Project Improvement of Solid Waste Dumping Sites and Enhancement of Management Garbage Collection System Improvement Solid Waste Recycling System Development Social Housing Development Project (20,000 units) Temporary Housing Area Development for Resettled Households Reform/Restructure of Mongolian Housing Financing Company (MHFC) Raising Awareness of Environmental and Living Condition Improvement Establishment of Support to Community-based Organizations for Environmental Improvement and Social Activities Establishment of Participatory Land and Immovable Asset Assessment System Development of Forest Protection Management and Monitoring System Development of Air Quality Management and Monitoring System Development of Water Quality Management and Monitoring System Enforcement of Relocation from Flood Prone Areas City Parks and Green Network Development Project Development of Planning Standard and Guidelines of Educational Facilities Acceleration Program for Pre-school and School Facility Development Development of Planning Standard and Guidelines of Health Care Facilities Acceleration Program for Health Care Facility Development Legal Enhancement of Urban Planning and Urban Development-related administration Training Program for Urban Planning Administration and Capacity Buildingfor Realizing the UB Master Plan 2030 Development of "Neighborhood Area Development Plan (NADEP)" for Ger Area Improvement Institutional Development for Social Housing Policies and Programs Financial Capacity Building Related to Social Housing Development Formulation of Community-based Financing System Comprehensive Policy Reform of Public Service Tariff Structure Preparation of Implementation Framework for PPP-based Public Service and Urban Development Projects Total Executing Schedule Cost Short Mediu Long Estimate ~2015 m ~2030 (US$ mill.) 5.7 10.0 0.0 150.0 84.0 0.0 2.0 10.0 0.2 4.0 3.0 2.0 50.0 30.0 0.5 50.0 0.5 50.0 1.5 4.0 0.0 1.0 2.0 0.0 1.0 1.0 2,700
Ce-01
Ce-02 EVM: Environmental Management Ne-01 Pc-01 Pc-02 ANM: Urban Amenity & Disaster Management SSI: Social Service Improvement Df-01 Go-01 Ed-01 Ed-02 He-01 He-02 ILG: Institutional & Legal-base Development Ud-01 Ud-03 Ud-05 Hs-01 Hs-02 DFS: Development Financing System Fs-02 Fs-06 Fs-07
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12.4 Financial Affordability Assessment

The total cost of the proposed 115 projects/programs accounts for US$9,894 million, as shown in Table 12.1. This investment needs to be allocated during the time period of 23 years up to 2030. As of 2007, it is estimated that the central government spends approximately Tg. 70,000 per capita for the capital expenditures, while Ulaanbaatar City spends Tg.12,000 per capita for its capital expenditures, as well. In total, Tg.82,000 (or US$70) is being appropriated for capital investment. Since it is forecasted that GRDP per capita in 2030 will increase by about 3 times as much as those in 2007, it can be safely said that the per capita expenditures for capital investment will be 3 times; at least through the government sectors budget increase along with the economic growth. The affordable expenditures of the governments will at least be Tg.246,000 (US$210) per capita. The future population in 2030 will be 1,740 thousand, an increase from the 1,030 thousand in 2007. Based on the above assumptions, the affordable line of the government expenditures will be computed at approximately US$5,030 million over the coming 23 years. This is a trend scenario, which means that no financial reforms will be carried out in future. Given the maximum effort to strengthen the financial capacity based on the measures proposed in the Master Plan, this affordable level will be greatly uplifted. Moreover, large-scale projects such as the development of the LRT system will be supported by international donors with long-term soft loans as well as involvement of the private sector under a PPP (Public Private Partnership) scheme. Other large-scale projects, that require huge initial investments, are the underground shopping arcade, the expressway, the electric power generation project, New Town Development, social housing project and so on. These projects are cost-recovery types, which means that total cash flows will not require as much funds as estimated in the project list. Taking into account these factors, it can be said that the proposed Master Plans for 2020 and 2030 are practicable and implementable in terms of budgetary affordability.
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13. ACTIONS FOR IMPLEMENTATION OF THE MASTER PLAN
13.1 General
Necessary actions should be taken for the realization of the Master Plan, which includes legal and institutional processes by such agencies as Ministry of Road, Transport, Construction and Urban Development, and the Ulaanbaatar City Government. (a) Institutionalization of the Newly Revised Master Plan of Ulaanbaatar City: Although this Study was carried out in a highly comprehensive and technical manner, it has not been conducted in accordance with the institutionalized processes stipulated in the Urban Development Law. But since this Study presents a number of recommendations and proposals that will revise the current Master Plan 2020, the Ulaanbaatar City government has acted on these recommendations to prepare a new Ulaanbaatar Master Plan for the target year 2030 with technical and financial support from the national government. (b) Organizational Restructuring: The administrative and technical capacities of city planning are too weak to cope with actual development management needs in Ulaanbaatar City. The public entity technically responsible for Urban Planning is the Urban Planning, Research and Design Institute (UPRDI), an important organization for city planning administration. However, UPRDI is an external organ with financial constrains, always facing difficulties in staffing and working capacities. A well-functional organizational system on urban planning administration should be structured; otherwise, Ulaanbaatar City will not be able to properly perform urban growth management and actually implement the designed Master Plan. (c) Formulation of District Plans with a Hierarchical Planning Structures: The Ulaanbaatar Master Plan shall provide a general framework for spatial structure and land use, as well as orientations on social and economic infrastructures. Based on the framework delineated by the Master Plan, local or District Plans, shall be formulated based on local realities. District Plans should present more detailed land use and spatial structures in proper consultation with community leaders and relevant stakeholders. This planning process should be initiated and facilitated by the Ulaanbaatar City in accordance with the Urban Development Law. (d) Donors Coordination: The common concerns of many donors are on urban development, environmental improvement, and the uplifting of social services such as education and health. The improvement of the Ger areas is a focal agendum in the donor community. Since technical and financial support from the donor community is
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an indispensable part of turning Ulaanbaatar City into a more livable and competitive city, a well-coordinated assistance among donors is highly required. Among the four (4) actions cited above, two key actions are briefly examined herein: (a) Institutionalization of the Newly Revised Master Plan of Ulaanbaatar City; and (b) Organizational Restructuring.
13.2 Institutionalization Process for Revision and Approval of the New Master Plan
As mentioned above, the most important action is to facilitate the institutionalization process of a new Ulaanbaatar Master Plan, based on this JICA Study. The official procedure in the formulation of a new, or a revised, master plan, in compliance with the Urban Development Law, is as follows: First, Based on Article 9, the Mayor of Ulaanbaatar City shall organize and initiate action leading to the revision and reform of the Master Plan. For this purpose, a working team (or Task force) shall be organized, headed by the Chief Architect (Article 10). The working team shall be organized with representatives from the relevant authorities of Ulaanbaatar City. This includes the economic and social affairs-related authorities; urban development-related authorities, such as Construction and Urban Development Department, Urban Policy Department, Land Management Department and Transportation Department, Road Department, and other concerned agencies or departments. Due to the important mandate given to the ministry, in accordance with Articles 7 and 18, MRTCUD shall dispatch qualified officials and technically proficient personnel to the working team. At the same time, based on Article 15, the Central Government shall arrange a budget to cover financial requirements for the working team. Ulaanbaatar City should also prepare a special budget to support comprehensive planning activities. The working team shall start by reviewing this JICA UBMPS in a manner where the planning will coincide with the requirements in Article 12. For this technical work, technical sub-groups may be organized with full involvement of academic experts. In the review process, public participation should be facilitated based on the elements of Article 17. The revised documents of the New Master Plan shall be approved by the parliament. Before that, projects and programs incorporated in the Master Plan shall be approved by the Citizens Representatives Khurals, based on Article 8. This will be a crucial but time-consuming part of the process.
13.3 Organizational Restructuring for Urban Planning Administration

The establishment of an empowered organization is essential to realize the targets of the Master Plan. The city government is required to conduct excellent management and opera-
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tion actions of the overall urban development project based on the Master Plan. To this end, a more functional organizational system should be established, with the following measures: The Mayor, and other high-ranking decision-makers, shall take strong leadership with a clear grasp and vision of the future development of Ulaanbaatar. Line agencies related to urban planning should be further strengthened. There are three functions on the administrative system: One is the policy building & planning function represented by the Urban Policy Department, since the physical and spatial planning capacity is generally weak. Another is the project and policy implementing function, represented by the sector department. The third is the registration and permission function rendered by Land Management Department. The most powerful authority is the Construction and Urban Development Department, headed by the Chief Architect, which covers the three functions in accordance with the Urban Development Law. In the administrative structure, the policy building and planning function needs to be further strengthened. Urban Policy Departments mandate is to study and formulate overall policy for development, but does not cover physical and spatial development policies. A new organization, provisionally called Urban Planning Department, which is independently responsible for the implementing, monitoring, revising and managing the City Mater Plan, is recommended for establishment, as shown in Figure 13.1. This department shall function as the base office of Deputy Mayor (newly assigned in December 2008) who is in charge of urban development policy. Figure 13.1 Enhancement of Urban Planning Administration in Ulaanbaatar City
Policy Building & Planning Function Project and policy Implementing Function Registration & Permission Issuing Function
Urban Policy Department
Construction and Urban Development Department (Chief Architect Office) Road Department Land Management Department Information Department Solid Waste Department
Urban Planning Department (Proposed)
Transport Department
Affiliated organizations, which are responsible for planning and project implementations of specific strategic projects and programs, also should be established, or reorganized, as the Mayors control organs, this is conceptualized in Figure 13.2.
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Establishment of City Planning Institute, which can be reorganized by strengthening the Urban Planning, Research and Design Institute (UPRDI) in terms of financial and staff capacities. The City Planning Institute shall have various functions, among which are the following: 1) Prepare the city master planning; 2) Provide technical and professional support in the formulation of the District Plans; 3) Conduct research for master planning and continuous monitoring of urban development; 4) Verify related policies and laws; 5) Review and develop the organizational environment in conformity with the dynamic change of the city; 6) Supervise works and duties related to urban development projects; and 7) Compile statistical and mapping data/information. Financially, the current operation cost of the institute may be managed through investment profits born from a special fund to be allocated from Mongolian Development Fund. Establishment of Social Housing Corporation as an independent public Corporation to provide affordable housings for low income class groups and to manage and operate comprehensive policies and planning in relation to the social housings, including the effective participation of the private sector. Rental housing provision is also part of this corporations task. The MHFC deserves to be functionally converted into a Social Housing Corporation. Establishment of New Town Development Corporation as an independent public corporation that will take responsibility for the constrution of infrasrturcures (roads, utilities, parks and recreational facilties) and the preparation of locations for new town project, as well as new housing area development. This organization may carry out joint venture projects with the private sector, but should take the intiative in project implementation through strong management roles. The financial source will come from Mongolian Developemnt Fund, National Pension Fund, bond issuance, and/or the new financial organization FILP (Fiscal Investment & Loans Program). Figure 13.2 Organizational Framework with External Affiliated Entities
Mayor
External Affiliated OrganiCity Planning Institute Social Housing Corporation New Town Development Public Corporation Other Public Interest Organization
Management Group
Private Sectors
Administrative Line Departments

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14. STEP FORWARD
A number of substantial arguments, proposals, and ideas were involved in this draft plan. Among these were the terms of enhancement for the legal and financial system in the urban planning administration as well as land use and zoning, new town development, and new urban transport systems with two public transit corridors under a compact city concept. In order to realize these concepts and strategies, the Study shows that a total of 115 projects/programs in the Development Program should be implemented up to the target year 2030, which cover almost all important sectors with a total cost of US$9,894 million. The result of the priority evaluation showed that a total of 50 projects are considered as urgent action projects which means that they are recommended for commencement as soon as practicable. These projects hopefully should be completed by 2015. The study outcomes are all subject to further elaboration and/or clarification among the relevant agencies and stakeholders. The most important action that should be taken soon after, or along with, the clarification process is that based on this Study, Ulaanbaatar City should commence revising the existing UBMP-2020 and prepare the New Ulaanbaatar City Master Plan 2030 in accordance with the Urban Development Law. This act of institutionalization is extremely important in turning Ulaanbaatar City into a well-governed, modern city where a fair and normative system ensures an orderly land use and development under a functional growth management mechanism. Donors are all welcome to join the above process and to support Ulaanbaatar City to become more competitive, livable, environmentally sustainable, financially bankable and governed well. On the other hand, model projects for Ger area improvement are still being planned in Dambadarjaa and Unur, with strong involvement of all stakeholders such as district and Khoroo governments and the community residents. Through these model projects, a community-driven Ger area improvement mechanism is being explored through a simple but ideal form of land readjustment. These project need to be technically and financially supported by JICA, other donors such as UN-HABITAT and NGOs as well as the Ulaanbaatar City government. The Study Team was often asked a question why the existing Master Plan 2020 cannot be materialized and what faults are existing, despite that the master plan has been approved by the Government. Even though the master plan is well-designed and technically correct, the plan could never be realized, given three (3) conditions, i.e., (a) legal and institutional systems to ensure the implementation; (b) government commitment for budgeting toward the implementation; and (c) strong support and advocacy of the general
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public and stakeholders. The JICA Study Team really hopes that this report will be fully utilized to guide such an institutional process of the Central Government as well as the Ulaanbaatar City Government towards establishment of the proudly prosperous city, Ulaanbaatar.
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JAPAN INTERNATIONAL COOPERATION AGENCY MINISTRY OF ROADS, TRANSPORTATION, CONSTRUCTION AND URBAN DEVELOPMENT ULAANBAATAR CITY GOVERNMENT

Eiji HASHIMOTO, Deputy Vice President Japan International Cooperation Agency

Subject: Letter of Transmittal Dear Sir,

Very truly yours,

District Location Map

Satellite City Location Map

ii Map of Ulaanbaatar City

Location of Ger Areas

2nd Steering Committee (October 2007)

1st Donor Meeting (October 2007)

Learning Session (July 2007)

Workshop on Infrastructure, Ger area improvement and Environment (June 2008)

Final Seminar (February 2008) xv

4th Steering Committee (February 2009)

Overall Schedule of the Study

Overall Schedule of the Study

Progress Progress Report Report

Interim Interim Report Report

Draft Draft Report Report

Final Final Report Report

Model Area Projects

Field Field Surveys Surveys

Preparatory Preparatory Work Work

Draft Action Draft Action Plan/Program Plan/Program

Final Plan Final Plan

Source: JICA Study Team

Structure of Final Report

GIS Maps and Drawings for Urban Planning (English)

2. VISION AND STRATEGIES

Urban Development Visions

9. 10. 11. 12.

UB Vision 2020 and Refined UB Vision 2030

Following the same visions

2: Livable city with appropriate land

3: Health city with safe environment,

4: International tourist city with

3. SOCIAL AND ECONOMIC PERFORMANCE & DEVELOPMENT FRAMEWORK

Socio-economic Conditions in Mongolia and Ulaanbaatar

Population Growth in Mongolia and Ulaanbaatar City

Changes in the Population of Mongolia and Ulaanbaatar City

60% Mongolia UB City

Changes in the Population of Mongolia and Ulaanbaatar since 1998

Land privatization (Summer house)

Source: Mongolia Statistical Yearbook

Distribution of Population by Age Groups in 2000

In-migration and Out-migration Patterns

Source: Statistical Handbook of Ulaanbaatar 3rd Edition, Ulaanbaatar City, 2006

Population Changes in Ulaanbaatar City by District

Economic Performance of Mongolia and Ulaanbaatar City

Changes in Economic Activities and Per-capita Products

Contribution of Industries to GDP Growth

Distribution of GRDP by Industry

Source: Statistical Handbook Ulaanbaatar 3rd Edition 2006

Number of Business Enterprises by Industry

Source: Statistical Handbook of Ulaanbaatar 3rd Edition

Major Export and Import Items

Source: Mongolian Statistical Yearbook 2006 and 2007

Source: Data from Foreign Direct Investment Committee

Foreign Direct Investment by Country

Source China Canada South Korea USA Japan Others Total

1990-2004 441,786 174,207 85,180 45,725 66,208 307,788 1,120,895

2005 227,912 1,542 19,004 5,564 5,841 56,975 316,839

2006 171,879 72,180 16,435 37,166 4,728 64,156 366,544

Share 46.6 13.7 6.7 4.9 4.3 23.8 100.0