THE GOVERNMENT GETS TO WORK ON FEASIBILITY STUDIES AND ADVANCE PAYMENTS

Many working for the Ministry of Mineral Resources and Energy, and the Ministry of Transportation and Urban Development, and researchers at the National Development and Innovation Committee have been kept from taking a vacation during the summer and the autumn, as they help the Government prepare the ground for feasibility studies of mega development projects. Still, the work is not going as fast as it should, and reading between the lines of the decisions taken at Cabinet meetings in September suggests that unless the process is somehow accelerated, the studies may not be finished during the term of the current Government.

The meeting on September 1 noted that studies are still being made on identifying the major infrastructure areas, while in several other areas proposals are beginning to be evaluated, with no indication when work on a proper feasibility study can begin on one finally selected. This was followed by the meeting on September 8 asserting that international standards have to be followed in preparing infrastructure projects, and then passing a resolution to select a reputable international legal consultant firm to advise on drafting agreements on major projects. This was particularly significant as showing that the Government wants to proceed carefully if slowly, so that feasibility studies for projects worth USD8 billion are beyond debate. Only  realistic and reliable studies will interest investors in projects that require huge funds.

It has become clear that the Prime Minister and his Cabinet colleagues will not be involved in work on these studies. It seems experience and study of global norms have taught them that such work is better left to specialist professionals than to all-purpose politicians. In its Spring session, Parliament gave the Prime Minister the responsibility to complete a feasibility study of a copper smelter in six months’ time. A busy political leader getting such a brief period of time to prepare a feasibility study of a major facility worth USD300-400 million is the perfect example of how such work should not be done. There are another 25 major projects approved by the Government exactly a year ago. The full list can be found in the November 2009 issue of the MMJ, but they include the Tavan Tolgoi mining project, a metallurgical complex, a coking coal unit, a chemical facility, an oil refinery, a construction material factory, the new railway, the Tavan Tolgoi power station, the fifth power station, and the residential apartment project. Their total worth will not be less than USD200 million. One hopes  Ministries and Agencies will stay away, or be kept away, from working on their feasibility study.

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