Russia and Iran have signed a €1.2-billion ($1.28 billion) contract for the electrification a key railway line in Iran, a report said.

Russian Railways' export business RZD International and Islamic Republic of Iran Railways (IRIR) signed the contract for the electrification of the 495-km route from Garmsar, Semnan Province on the Tehran–Mashhad main line to Incheh-Borun on the border with Turkmenistan, said the Iran Daily report.

The scope of the work includes 25 kV 50 Hz electrification and track, signalling and telecommunications enhancement to increase capacity on the route.

It also covers the supply of maintenance vehicles and electric locomotives as well as the provision of technical assistance during the first year of electric operation, the report said.

The work is expected to take four years, and will start as soon as the governments have finalised a €1-billion Russian loan for the project.