A. BACKGROUND 

Mongolia received a credit from the International Development Association (IDA) for the Strengthening Fiscal and Financial Stability (SFFS) Project. The Objective of the SFFS Project has been to contribute to the Government of Mongolia’s efforts to strengthen fiscal and financial stability and improve the quality of expenditure. The project is designed into five components: (i) Strengthening Macroeconomic and Fiscal Management; (ii) Improving the Efficiency of Public Financial Management; (iii) Enhancing Financial Sector Stability; (iv) Strengthening the Social Protection System; (v) Project Management and Monitoring. The objectives are to strengthen fiscal responsibility and implement relevant policy measures; improve fiscal discipline; strengthen the resiliency of the banking system; improve public expenditure quality in social protection; and provide support for Project implementation, coordination, monitoring and evaluation, including, inter alia, audit arrangements, reporting requirements, procurement and financial management activities respectively. For more details, please refer to the Project Appraisal Document Report No. PAD2269 . 

The overall objective of Component A of the Project has been to strengthen fiscal responsibility and support the implementation of relevant policy measures toward (a) improving the quality of expenditure management, (b) strengthening macroeconomic and budget policy-making capacity, and (c) improving regulatory processes. Within this component there are also specific activities planned for furthering tax reform including by introducing the latest international taxation rules and regulations.

The Government of Mongolia (GoM) has been undertaking revenue mobilization measures to support the fiscal consolidation efforts in recent years including tax and customs policy reforms as well as revamping of key information technology infrastructure at the tax and customs administrations. Considering the economic and fiscal challenges posed by the COVID-19 pandemic, the GoM will be planning to take further and additional revenue mobilization measures to ensure and accelerate post pandemic recovery and support fiscal consolidation. In this regard, the GoM is focusing not only on tax revenue, but also on reviewing non-tax revenue items to expand the revenue basis. Thus, the Ministry of Finance (MoF) and the Government Agency for Policy Coordination on State Property are working in close coordination to improve the efficiency, transparency and governance of State Owned Enterprises (SOEs) and increase the revenue contribution by these entities. A number of policy measures have been carried out by both the Parliament and the Government to this end. In order to increase return on government equity and the fiscal contribution by the SOEs, the Parliament passed the Resolution 88, 2021 to outline the dividend payout policy for these enterprises for the first time. Likewise, the GOM approved the Resolution 345, 2021 to improve the governance, efficiency and fiscal discipline of SOEs. Currently, the GOM is undertaking the revision of State-Owned Company Law and State and Local Property Law to further its SOE reform agenda.    

There are over 110 SOEs operating in key industries, such as mining, electricity, banking, communication, aviation and transport sector. Some SOEs are managing and developing mega projects in mining and infrastructure sectors. Given the size of the total assets, sales, and monopoly of the SOEs, the return on total assets and equity have remained relatively low combined with low profitability and insufficient contribution to the government budget.          

Against the background above, as instructed by the Parliament and the Government, the MoF is taking on a new assignment to review financial soundness of SOEs and to prepare and formulate recommended measures towards improving profitability and revenue contributions by these entities. As part of this work, the MoF has collected data on the financial condition and profitability of SOEs and is working to use this data to develop a financial model. 

In this regard, the MoF is seeking to hire a national consultant to carry out a comprehensive financial analysis on the activities of state-owned enterprises (including mega projects) and other revenue mobilization measures.

B. OBJECTIVE OF THE ASSIGNMENT

The objective of the assignment is to assist the MoF in conducting a detailed financial analysis on the performance of SOEs and other government entities and carrying out revenue contributions to the budget in close cooperation with officers and local consultants of the Fiscal Policy and Planning Department (FPPD) of the MoF.

C. SCOPE OF WORK

Key tasks under the assignment will include, but not be limited to, the following:

1. Compile and create detailed data sheets for SOEs’ structure and ownerships; 
   
2. Collect the necessary data and information and conduct financial and other related analyses on the financial statements database of other companies in the sector to compare with the SOEs;
3. Create data series for tax, dividend payment and other fiscal contribution of SOEs and other government entities;
4. Review and revise the existing financial model for mega projects implemented by SOEs and revenue forecasting model for fiscal contributions from of SOEs;
5. Propose measures to promote revenue mobilization by reviewing the performance of SOEs and other fiscal entities; and
6. Undertake other assignments related to the activities above as reasonably requested by the Client. 

D. DELIVERABLES

The following deliverables shall be submitted to the Client:

1. SOEs business registration database revised containing key registration and stakeholder information;
   
2. Detailed data sheets created for SOEs’ structure, ownership, voting rights, the purpose and direction;
3. Multi-year tax and dividend payment data series updated;
4. Report on the findings of financial and other related analyses on financial statement database and other fiscal contribution statistics of other private companies in each sector;
5. Financial toolkit to review financial ratios and evaluate financial soundness and performance of the SOEs compared with the private companies;
6. Revenue projecting models for estimation of fiscal contributions from SOEs; 
7. Revised model for selected mega projects implemented by a given SOE; and
8. Summary report outlining completion of assignment.

E. CONSULTANT’S QUALIFICATIONS/ SELECTION CRITERIA

Education: The suitable candidate should have a bachelor’s degree in relevant field: economics, finance, mathematics, accounting or public administration;

Experience: The incumbent should have at least three (3) years of relevant professional experience including in the areas of accounting, finance and other public policy areas. Knowledge of technical terms of tax and budget as well as working experience related to SOE management or mega projects would be an advantage.

Language skills:  Fluent written and spoken skills in English;

Other skills: 

• Excellent interpersonal skills with the ability to function effectively and collaboratively in a team environment; 
• Be proficient in PC-based applications such as Word, Excel and data management, and have excellent web research and navigation skills;
• Familiarity with the IT system particularly, with fiscal management information system is essential; and
• Be able to work overtime if required.

F. SUPERVISION AND REPORTING 

The Consultant will report directly to the Head of the Budget Revenue Division (BRD) and the Director-General of the FPPD, MOF and will work on a day-to-day basis with officers, international and local consultants of the FPPD on all matters related to the assignment. The Head of the BRD and the Director-General of the FPPD will meet regularly with the Consultant to review progress with the work program and to resolve any outstanding issues. The consultant is expected to provide monthly reports to the Client with the relevant detailed deliverables and documents enclosed as per Section D above. 

G. CONTRACT DURATION AND PAYMENT CONDITION 

The assignment is expected to commence in July, 2022. The total duration of the consultancy service rendered is estimated to be twelve (10) months. 

The consultant will be required to carry out his/her tasks in line with the approved Work plan, which will serve as a basis for measuring progress on desired outcomes and goals. The monthly reports against the approved work plan will then be the basis for the monthly payments for the consultancy service. 

H. INSTITUTIONAL ARRANGEMENTS

The Client will provide an office space and will work with the Consultant on a day-to-day basis. The consultant shall be provided with all the necessary data and information to perform the tasks specified in Section C. All information provided to the Consultant will be regarded as confidential and information shall not be shared with any outside individuals or organizations without the Client’s prior consent.

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