The project aims to build the first high speed railway link between Laos and Vietnam and will take five years to complete. The State-run Vientiane Times reported that the 4 billion US dollar contract was signed on Monday.

Laos prime minister Thongsing Thammavong and his Malaysian counterpart Datuk Seri Najib Razak witnessed the signing for the electrified double track railway project.

The master concession agreement is between the Laotian government and Giant Consolidated Ltd, a Malaysian company, to develop the 220km track from Savannakhet to Lao Bao, near the Vietnam border.

Once the project is completed Savannakhet Province will have a direct rail link to Lao Bao, at the Laos Vietnam border.

The Laos-Vietnam railway line is part of a planned network linking Southeast Asia and when the entire project is completed it will provide a non-stop connection to Singapore through Thailand and Malaysia into Kunming Province in China.