Ulaanbaatar Railway Prices Increase by 50 Percent

Ulaanbaatar Railway officials announced Wednesday that current railway ticket prices will increase by 50 percent immediately, explaining that the company suffers from a Tg 20 billion deficit. D.Jigjidnyam, Deputy Chief of Transport for Ulaanbaatar Railway, said that the company has requested legislation for a transport fee from the Government for the last two years, but has not yet received a reply. Two years ago, Ulaanbaatar Railway covered the deficit from weak passenger revenues by charging tariffs on freight transit. However, when Russian oil company UKOS went bankrupt, transit freight revenue halted. In 2005, Ulaanbaatar Railway transported 4000 tons of crude oil from Russia to China, but in 2008 only one ton of crude oil was transported. Global oil prices, equipment prices, and maintenance costs have risen sharply in the last year, and Ulaanbaatar Railway has not been able to cover its deficit as well as before.D. Jigjidnyam stated that while the price of diesel has increased 6.8 times since 2001, freight rates have gone up only 82 percent. Ulaanbaatar Railway served more than 4.5 million passengers in 2007, and current year-end projections suggested a slighter higher total for 2008.Both international and domestic train prices will be affected by the increase. A trip to Erlian in China by an express train will now cost Tg 25,500 more than the present Tg 51,000, while a ticket to Darkhan city will now be Tg 15,200, up from Tg 10,200. Before the current price increase, one passenger from Ulaanbaatar to Russia would have paid Tg 250,000, but D. Jigjidnyam suggested that the real price was Tg 390,000, with the deficit absorbed by Ulaanbaatar Railway. “The increase is not meant to help [Ulaanbaatar Railway] make a profit,” D.Jigjidnyam said. “It would only minimize losses.”