-The amendment will enable Ulaanbaatar city government to issue bonds and grant concessions-

Ulaanbaatar /MONTSAME/ During its plenary session, the State Great Khural amended the Law on Legal Status of Mongolian Capital of Ulaanbaatar, which will enable the Ulaanbaatar city government to issue bonds and grant concessions besides making it legally independent. Moreover, with the responsibilities and involvement of the governor of the capital city now expanded through the amendment, ministries will be required to consider suggestions from the city’s mayor when they discuss matters concerning the capital city at Cabinet meetings and the city’s mayor will be entitled to submit matters for consideration. We interviewed Governor of the Capital City and Mayor of Ulaanbaatar D.Sumiyabazar regarding the recent amendment to the Law on Legal Status of Ulaanbaatar City. 

-First of all, I extend my congratulations on having the Law on Legal Status of Ulaanbaatar City amended after 27 years. What are the key changes, made by the amendment?

-Thank you. MONTSAME National News Agency is also marking its 100th anniversary. I congratulate you on that. The Law on Legal Status of Ulaanbaatar City was adopted 27 years ago and there had not been any substantial changes since then. At the time, the legal capacity of Ulaanbaatar city government, responsibilities and involvement of the city’s governor and the city’s governance principles, budget, population, density, and economy were incomparably different from today. Regulating the present-day Ulaanbaatar with basic legal regulations of that time was deemed a challenge. The Law on Legal Status of Ulaanbaatar City has been successfully amended after 27 years. The amendment is a major achievement. It will ensure increased fundamental social support for the 1.5 million citizens of the capital city. Alongside a budget reform and the introduction of independent taxation regulations taking place, thousands of new jobs are expected to be created accordingly. 

19 bills and resolutions accompanying the Law on Legal Status of Ulaanbaatar City were also approved. Preparations are underway to amend many other laws as well. 

-The amendment entitles the Ulaanbaatar mayor to submit matters to the Cabinet themselves, which appears to be opening up many opportunities for the city government?

-The governor of the capital city previously was not the one submitting matters to the Cabinet and had to submit them via a ministry. Since the mayor was not the one presenting matters concerning their city to the State Great Khural, everything would seem to be fine and going well. For example, a majority of the country’s health care providers are based in Ulaanbaatar, but we could not raise their salaries. Expanding the Ulaanbaatar city government’s legal capacity as a solution to many such issues is a key change made by the amendment. Specifically, the amendment includes a new regulation requiring ministries to take suggestions from the city’s mayor before submitting matters concerning the city to the cabinet. Secondly, a change has been made enabling the city’s mayor to personally submit and present matters, to have a voice on behalf of the 1.5 million citizens in matters regarding the city and its public enterprises, social and economic development, budget, and financing structure, and in increasing jobs and supporting employment. In the absence of this, the city, which is akin to ‘a large family’, had been disregarded. We will use our voice to protect the interests of our citizens and submit matters to the State Great Khural and the cabinet. Thirdly, from now, land clearing will be carried out with funding from state and city budgets. There previously were no definite regulations on that. After funds had been allocated for the much needed development and construction of roads, bridges, engineering infrastructure, schools and kindergartens, the city government would be required to fund land clearing, despite not having the funds needed. The Ministry of Finance would then withdraw the funds earmarked for development projects. The amendment includes a new regulation requiring the State Great Khural, government, and Ulaanbaatar city government to work in harmony and carry out land clearing with funding from state and city budgets.

-What new opportunities have been created for foreign investors within the legal framework for investment?

-The Law on Legal Status of Ulaanbaatar City was developed with the aim of securing support for the city government through development policy, funding, and foreign loans and aid. The city government’s foreign cooperation will be elevated to a new level. We have to create a legal framework that enables the Ulaanbaatar city government to implement major construction projects on its own and have the human resources. The city government now has the legal capacity to issue bonds and grant concessions. 

So there will be a human resource reform. We will aim at recruiting the best and most skilled people. Major projects will be launched. We will adopt a road map defining what kind of city Ulaanbaatar will develop into by 2040 and 2050 and have an ambition to work towards becoming that city in the future. 

The amended Law on Legal Status of Ulaanbaatar City comes into force on January 1, 2022. In the meantime, we will make preparations to issue bonds and grant concessions. There is also a great deal of work to carry out including preparing the governance structure and supporting the health care sector. We are planning to have a structure geared to the city’s social and economic realities and residents. The amendment is also the first step for Ulaanbaatar in becoming economically independent. It represents the interests of the 1.5 million citizens of Ulaanbaatar city and will be the solution to numerous pressing issues such as traffic congestion, public transport upgrade, and road maintenance and services. Moreover, we have to support the private sector by permitting them to provide services in compliance with COVID-19 control and prevention guidelines. Preparations are underway to support citizens’ businesses and companies’ production and services. In other words, there will be much less pressure from the government. Secondly, the city government’s financial capacity will be improved. A great number of jobs will be created. Major development projects will be launched in the coming years. Infrastructure development works will be carried out as well. It is expected that the city will see positive changes.

-Ulaanbaatar is having a new set of rules. When and how will it be developed and what rules will be included? 

-The Capital of Ulaanbaatar will have its own rules set out by the Citizens’ Representative Khural (city council). The rules will be developed with the temporary committee on Ulaanbaatar’s development plan. The law, which was amended after 27 years, will bring new opportunities and pave the way for development for Ulaanbaatar. To aid the city’s development, Head of the Government L.Oyun-Erdene has decided to annually allocate MNT 420 billion in the city budget, opening up opportunities for expanding the city and developing it from a single-center city to a multi-center city. In efforts to make the city more pleasant, we will work with the city’s residents, civil society organizations, and companies through public-private partnerships. Design plans of road, bridge, and subway construction projects are under development. I would like to avail myself of this opportunity to express my profound gratitude to Speaker of the State Great Khural G.Zandanshatar, members of the temporary committee on Ulaanbaatar’s development plan, and Chair of the Working Group on the law and Member of the State Great Khural J.Sukhbaatar, and members of the working group, who gave policy support to the amendment, and the staff of the Secretariat of the State Great Khural who had to take on a heavy workload.

-What works will be carried out using the MNT 420 billion allocated in the state budget for the capital city’s development?

-Ulaanbaatar city government earns direct revenue from income taxes and other taxes. The revenue goes to the state budget. In general, the city government contributes the same amount as Oyu Tolgoi Company. What we asked for at first was to keep that revenue. The Cabinet accordingly made a decision to yearly allocate no less than MNT 420 billion from the state budget to improve Ulaanbaatar city government’s financial capacity. The MNT 420 billion will not be earmarked to solve only traffic congestion. 

Traffic congestion is caused by numerous factors including poor urban development and planning, public transport, and private vehicle use. There are many matters to consider such as how to address the city’s overpopulation and develop the sub-centers to reduce traffic congestion. Firstly, we want to build a highway network. It is feasible and there is a solution. Secondly, the development of a subway network has been under discussion. As the client, we have to first discuss what kind of rapid transport to have with the contractor and to determine at what depth below the surface the lines should be created through a study. We need a rapid transit system. The opportunities and possibilities are there. There is a way to raise funds. We have launched an extensive plan to alleviate traffic congestion in Ulaanbaatar and address the city’s overpopulation with the speaker of the State Great Khural, prime minister, government, and members of the State Great Khural.