(Yicai Global) Aug. 30 -- The Thai cabinet has approved a construction contract for the first phase of the China-Thailand railway project, one week after the approval of the railway design contract on Aug. 22, state-owned news agency Xinhua reported.

The cabinet green-lit the supervision contract at a meeting yesterday, and increased the construction budget from THB1.649 billion (USD49.67 billion) to THB3.5 billion, though the total project budget remains at THB17.94 billion (USD5.4 billion).

The budget increase is mainly due to the addition of more work items, such as construction safety, Kobsak Pootrakul, vice minister at the Prime Minister's Office, said at a press briefing after the meeting.

Both countries are stepping up efforts to sign the contract in early September and kick-off construction in October, the Chinese embassy in Thailand said.

The railroad is Thailand's first high-speed rail with standard gauge tracks. The first phase is about 253 kilometers long, and the maximum design speed is 250 kilometers an hour.

The rail line will be extended to Nong Khai province in Laos, separated by a river from the capital, Vientiane, in the second phase. It will also join with the Boten-Vientiane section of the China-Laos railway. The project will transform Thailand into a transportation hub in the Indochinese peninsula, stimulate economic growth in the country, and benefit all nations along the route.