The Parliamentary Standing Committee on Budget convened a general oversight hearing last week examining whether the capital’s 2024 to 2026 budget expenditure and investment project implementation comply with relevant legislation. What emerged was a portrait of institutional failure at nearly every level. The hearing ran in parallel with the Ulaanbaatar City Council’s first reading to approve this year’s revised budget, a scheduling overlap that few observers found coincidental. While lawmakers deliberated on fresh appropriations in one chamber, legislators and experts in another were methodically laying out how previous spending had already gone off the rails.
The most glaring case centered on the Tuul Highway project. Initially budgeted at 916 billion MNT in 2024, the project’s cost was doubled to 1.9 trillion MNT within months, a revision carried out under government instructions and filed under the label “Preliminary Draft Budget”. A further adjustment followed shortly after, adding another 400 billion MNT to bring the total to 2.38 trillion MNT. The catch, hearing chair and parliamentarian J.Zoljargal stressed, is that the term “Preliminary Draft Budget” does not exist anywhere in Mongolian law or regulation. The cost escalations were therefore processed through a legal category pulled out of thin air, and the City Council, the body tasked with oversight, approved the relevant resolutions each time without recording formal protocols. The representative body that should be the main oversight body repeatedly approved resolutions without recording any protocols, J.Zoljargal said during the hearing.
The Selbe sub center project drew equally sharp criticism. Investigators found that government executed construction came in substantially more expensive than comparable private sector work, while contracts were awarded in ways that appeared to open the door for Chinese firms. The circumstances, J.Zoljargal noted, remain under active debate. Together, the Tuul Highway and Selbe projects have come to stand for a broader pattern. Large sums of public money moving through processes that lack transparency, legal grounding, or meaningful checks and balances. The capital’s budget investment grew 3.8 times between 2024 and 2026, a dramatic expansion with little accountability to show for it. What remains to be seen is where the hearing’s findings will lead. The testimonies of experts and participants who surfaced these irregularities are now part of the public record. Whether they translate into formal accountability, and on what timeline, is a question the hearing itself left hanging in the air.
Budget is amended every 3 months
Meanwhile, the “gray palace” in Yarmag found a way to quietly muscle through a draft resolution on amendments to the capital’s 2026 budget last Monday, and the whole affair was wrapped up before most residents had finished their morning tea. Only a handful of representatives saw fit to raise their hands on a matter touching the lives of 1.6 million people. Capital Mayor B.Purevdagva stepped to the podium and smoothed things over with well-rehearsed efficiency. The amendment, he assured the room, was clean. Article 34 of the Budget Law and a clutch of government resolutions gave it full legal cover. The revision existed, he explained, to shoulder the costs of preparing the capital for winter. Folded into the package was an urgent line item for the repair and modernization of engineering infrastructure at the Tuul 1 collector, work that could not wait given the imminent commissioning of the new central treatment plant. Funding for the Agro City special economic zone was tucked in as well, prompted by the recent green light on its general development plan. The room absorbed it all without much friction. Hands went down. The session moved on.
For the Mongolian People’s Party bloc entrenched in the City Council, none of this was out of character. Reworking the capital’s budget three to five times a year has quietly hardened into something resembling a tradition, with each new round of revisions arriving before the previous ones have had a chance to take root. The 2025 budget was put through the wringer four separate times. This year’s version is already on its second overhaul within six months of being passed. At a certain point, repetition stops looking like adaptability and starts looking like an admission that no one had a serious plan to begin with. What is left is public money sloshing around with no coherent roadmap, no credible oversight, and no one visibly prepared to answer for it.
When journalists reached out for details on the approved amendment, the press offices of the City Council and the State Council of Mongolia proceeded to point fingers at one another, each sending reporters toward the other’s door. Neither delivered. It was a small farce, but an illuminating one. A city budget is not a cocktail napkin to be scribbled on and crumpled up at will. It is the governing architecture of urban life, the document that gives shape to long term ambitions, locks in medium term commitments, and translates both into concrete short term action. What Ulaanbaatar has in its place is something closer to a rough draft that never quite becomes final, rewritten every quarter in response to circumstances that competent planning should have anticipated months earlier. That is not governance. It is improvisation dressed up in the language of administration. The City Council exists, above all else, to stand behind the budget it passes. By that measure, the council has a great deal of standing left to do.
Only 4 of 43 double-dipping representatives step down
The idea behind local self-government is elegant in its simplicity. Citizens elect representatives. Those representatives keep a watchful eye on the executive, give public concerns a seat at the table, and answer to the people who sent them there. It is a compact built on accountability, and it has worked, in various forms, in democratic societies for centuries. The Ulaanbaatar City Council has managed to turn that compact inside out.
Rather than acting as a check on the mayor, the 45-seat City Council has drifted into something closer to a rubber stamp, an institution that does not so much scrutinize the mayor’s decisions as dress them in a veneer of legitimacy and wave them through. The oversight function, the very reason the council exists, has been quietly hollowed out from within. What has taken its place is something altogether more troubling. Of the 45 representatives occupying seats in the city parliament, 43 simultaneously serve as chairmen or members of the boards of legal entities either owned by or carrying the capital’s equity stake. Across those 43 figures, 104 such board positions are divided up, and 65 of them are clustered in the hands of just 19 representatives, according to findings presented at a recent oversight hearing.
The names attached to the thickest slices of that pie make for instructive reading. Representatives G.Batzorig and T.Davaadalai each sit on the boards of five capital-linked entities. A.Amartuvshin, S.Davaasuren, T.Battsogt and Z.Tumurtumuu each chair or serve on four. A longer list of colleagues, among them D.Ikhbayar, L.Ariuntuya, J.Batbayasgalan, Ts.Battur, Ch.Batzorig, B.Munkhbat, B.Myagmar, T.Otgonbold, B.Semjidmaa, B.Khuyagbaatar, E.Enkhtur, L.Khosbayar and Ch.Mendbayar, hold positions across three entities apiece. The arrangement creates a conflict of interest so fundamental it borders on structural. A representative who draws a salary from a city-owned company is not in any meaningful position to scrutinize that company’s budget, question its management, or demand answers on behalf of the public. The watchdog becomes the ward.
Following the general oversight hearing, four representatives, B.Anu-Ujin, L.Khosbayar, B.Munkhbaatar and B.Munkhbat, submitted resignation letters from their board positions and stepped back voluntarily. It was a gesture toward decency, if a modest one. The remaining 39, including the 18 representatives who sit atop the largest concentrations of board seats, have yet to follow suit, apparently weighing whether to keep one foot in each world a little longer. And in a country where public outrage tends to have a short half-life, the pressure on them to act has already begun to dissipate. The story moves on. The arrangements remain.
What is left behind is a council in which many members serve their party machinery first, their board positions second, and the citizens who elected them somewhere further down the list. They are, in the bluntest sense of the word, conflicted. And a conflicted council cannot govern, cannot oversee, and cannot be trusted to push back against an executive that knows it holds the upper hand. The legal and procedural conditions for dissolving the City Council, by most readings, are already in place. The grounds exist. The requirements are met. What is missing is the political will to act on them. In the meantime, the 45 representatives of Ulaanbaatar carry on collecting their salaries, attending their board meetings, and fulfilling the letter of their roles while gutting the spirit of them entirely. The council has not been formally dissolved. But in every way that matters to the 1.6 million people it was built to serve, it might as well have been.
A two-thirds vote is all it takes to dissolve
The legal architecture for dissolving the City Council is not a matter of interpretation. It is written in plain language. Subsection 36.1.1 of the Law on Administration, Territorial Units and Their Management lays it out without ambiguity: if a majority of the total number of representatives submits a proposal that the Council is no longer capable of exercising its mandate, the Council may dissolve itself by a vote of at least two thirds of its total membership. Should that threshold be crossed, elections must be scheduled and announced within 30 days in accordance with relevant law. The mechanism exists. The precedent is established. The path is clear. And yet nobody is walking down it.
The party that has won three consecutive elections in the capital is not about to see off the branch it is sitting on. These are people who have spent years maneuvering for positions, consolidating influence, and building the kind of institutional entrenchment that does not surrender itself willingly. Pulling the cord on their own council would mean relinquishing board seats, executive access, and the quiet financial arrangements that come with holding power in a city of 1.6 million people. Whatever their obligations to the electorate, self-preservation tends to win in a landslide. The law offers a second route as well. Under the same article, the Government may dissolve the City Council upon the proposal of the mayor if the first session is not convened within 50 days of being announced, if the question of nominating the mayor goes unresolved, if the budget is not passed within the legally prescribed window, or if more than 60 days pass between the announcement of a session and its actual convening.
On paper, these are meaningful triggers. In practice, they are pressure valves that have never been opened, and there is little reason to believe they will be now. When one party holds the reins at every level of government simultaneously, the checks embedded in legislation tend to become decorative. The law says what it says. Enforcing it is another matter entirely, and for the better part of a decade, enforcement has been conspicuously absent. A total of 10 years of single-party dominance from the capital’s district offices to the Parliament have produced a political ecosystem in which institutional accountability has been slowly crowded out by institutional loyalty. The rules have not changed. The willingness to apply them has. And in that gap between what the law demands and what those in power choose to do, the residents of Ulaanbaatar are left waiting for a council that answers to them, and wondering if that day will ever actually come.
Government pressure can break the deadlock
History offers no shortage of cautionary tales for institutions that lose their way. In 2023, the British government stepped in and stripped Birmingham City Council, one of the largest local authorities in Europe, of significant powers after years of financial mismanagement had piled up debts the council could no longer pretend to manage. The money had run out. The controls had long since stopped functioning. Westminster did not wait for the council to fix itself. Two years earlier, Liverpool City Council had met a similar fate after a court laid out damning findings of tender fraud, corruption and conflicts of interest so entangled that normal governance had become effectively impossible. A special commissioner was appointed. Functions were centralized. The elected body, in practical terms, was sidelined.
Across the Channel, Italy has been down this road more times than it would care to count. In 2012, the Government dissolved the local authority of Reggio Calabria after concluding that organized crime had worked its way so deeply into the decision-making of local leaders that the institution could no longer be trusted to govern itself. It was the first major case of its kind, but far from the last. Coastal municipalities have since been dissolved on similar grounds in a recurring pattern, each time replaced by government-appointed commissioners tasked with clearing out what elected officials had allowed to fester. These are not obscure footnotes from distant political systems. They are blueprints for what happens when local governance collapses under the weight of its own contradictions, and the outside world decides it has seen enough.
Ulaanbaatar is not there yet. But the distance is closing. Among the elected representatives sitting in the Council, several have already attracted the attention of investigators. Some have faced suspicion of corruption and abuse of office. Some have been detained. These are not allegations that floated in from nowhere. In the case of the Tuul Highway project alone, a sitting representative of the capital’s local government was implicated through family and personal connections, raising questions that go far beyond one individual. If a member of the very body charged with overseeing a mega project has skin in the game through relatives and associates, the oversight function does not merely weaken. It collapses entirely.
The Tuul Highway is not a minor procurement. It is a project that has already swallowed 2.38 trillion MNT of public money and counting, touching design approvals, financing structures, investment decisions, tendering processes, land ownership transfers, and registration records at every stage. Each of those stages is a pressure point. Each one represents an opportunity for someone with access and motivation to reach in and take something. Whether the City Council, in its current configuration, is capable of watching over any of that with clean hands and clear eyes is a question that can no longer be brushed aside.
If the honest answer is no, then the conversation that needs to happen is not about reform or gentle course correction. It is about who takes the wheel, how quickly, and under what authority. Other cities have been forced to have that conversation. Some came out the other side in better shape. Ulaanbaatar would do well to study those examples carefully, because the longer the current arrangement is allowed to drift, the fewer good options remain on the table.
