Ulaanbaatar Railways loses MNT 1.7 billion due to coronavirus

2020-03-24 18:34:14

Ulaanbaatar /MONTSAME/. Today, B.Davaasuren, Head of Passenger Department of the Ulaanbaatar Railways national railway operator held a meeting with media organizations to give updates on the company’s operations amid coronavirus pandemic. 

Because of the coronavirus pandemic leading to suspension of international passenger train travels until April 30, the Ulaanbaatar Railways is having hard times, said Mr. Davaasuren. 

“The company cannot fulfill its plan for the first quarter of 2020 to carry 574 thousand passengers and has only served 150 thousand passengers in the first three months of 2020. We estimate the loss during this period at around MNT 1.7 billion. Moreover, only 90-100 trains are running for domestic travels out of 276 trains of the company due to reduced passenger traffic since February 15”. 

In normal times, daily passenger traffic of the Ulaanbaatar Railways Mongolian-Russian JSC reaches 8000, and up to 13000 during busy periods. However, the number reduced to only around 3200-3500 passengers a day, 20 percent of them travel southbound from Ulaanbaatar and 80 percent on northbound routes. 

He further said that operating cost to carry each passenger equals to MNT 52 each kilometer and the company charges each passenger MNT 30 for one kilometer, which means the company incurs an estimated loss of MNT 22 in each kilometer of travel for one passenger.

Even in normal conditions, the Ulaanbaatar Railways face an annual loss of MNT 25-30 billion on the grounds of the current pricing as well as difference of currency exchange rates, said Davaasuren. Despite the permission issued in 2018 from the Authority for Fair Competition and Consumer Protection to increase its tariffs by 3-30 percent with a view to minimize its financial loss, the company did not raise its price for customers as part of its social responsibility.”  

1700 employees of the company, who work for the passenger transportation services, are given options to take their annual leave and some of the employees have taken the initiative to voluntarily take unpaid leave.