The project, to build a 167-km railway from Dali county to Lijiang city in northwestern Yunnan Province, will develop efficient, safe and environment friendly rail transport in the region, creating jobs and income generating opportunities, and providing better links for the poor in the area, the ADB said Friday in a statement.

The single-track railway will provide the shortest land route between the two key centers in the province, the statement said.

Besides laying of railway track, the project will construct 11 new railway stations and install modern signaling and safety systems, including mechanized track maintenance.

Around 1.1 million people, mostly ethnic minorities, living in the project area will benefit from the ensuing greater economic integration, access to services, and lower transport costs, as will railway freight operators and passengers, who will face shorter travel distances and times.

The railway construction will also generate direct jobs for more than 7,000 poor people, the majority of whom are ethnic minorities.

The project will also provide better connections to Kunming, Shanghai and Beijing via various national rail systems. Further, it will promote regional cooperation in the Greater Mekong Subregion through its links to the port of Haiphong in Vietnam andto the proposed Pan-Asian Railway (Singapore-Kunming Railway).

The total project cost is estimated at 548 million dollars. Trial operation is scheduled to start in January 2009, and it willtake one year before commercial operations begin.