Construction began in April 2025 on the 87.8-km Bagakhangai–Khushig Valley section. According to the government, the main construction on that section is now complete. Work on the Khushig Valley–Emeelt section began this year.

The government has ordered officials to have the railway ready for test runs in September. Full operation of the route could occur as early as December.

The railway is being built primarily to move dangerous freight away from populated areas of Ulaanbaatar. Once completed, it will carry gasoline and other petroleum products, as well as explosives and chemically hazardous cargo and coal destined for power plants.

"This dangerous cargo will be transported via the Bagakhangai–Khushigiin Valley–Emeelt direction, not through Ulaanbaatar city," Prime Minister Uchral Nyam-Osor told reporters during a visit to the project site on August 13.

The need to remove hazardous freight from the capital gained added urgency after a deadly accident in January 2024, when a heavy transport truck carrying liquefied gas collided with a vehicle in Ulaanbaatar and exploded, killing six people and igniting a large fire (See archived news video report at foot of this article)

In addition to the safety aspect, moving cargo trains around the city is also expected to reduce wait times at railway crossings. The government adds that train use could also take hundreds of trucks off Ulaanbaatar’s roads.

The new line is being constructed on a considerably more direct alignment than the older railway that goes past Nalaikh and through Ulaanbaatar.

"The old line was built like a snake. Now, the route is direct," said Uchral.

One of the project's largest structures is a new railway bridge over the Tuul River. The government says the bridge will be 476 metres long, making it the longest railway bridge in Mongolia.

Mongolian Railway officials said engineers are working to protect the flow of the Tuul River during construction.

The government says a total of 95 Mongolian companies and more than 4,000 Mongolian engineers and workers are participating in the railway project.

Uchral emphasised the domestic nature of the construction, saying Mongolians had reached a point where they could undertake major railway projects themselves.

The railway is also intended to play a much broader role in the development of the Khushig Valley, home to Chinggis Khaan International Airport, completed in 2021.

With around 1.7mn people now living in Ulaanbaatar, the population has doubled over the past two decades, and the government is looking to take pressure off the capital’s infrastructure by encouraging its residents to move to satellite towns.

The government envisions the Khushig Valley as playing a key role in that effort and is promoting it as a major transportation and logistics hub rather than simply an airport district. A new logistics centre is planned there, with the railway providing a connection that could allow some freight and logistics operations to move out of Ulaanbaatar.