Iran and China have agreed a $2 billion deal to electrify the railroad linking Tehran to Mashhad in north-eastern Iran, a report said.

The project will take 42 months to complete, manager of the electrification project of Iran's Railroads Qassem Saketi, was quoted as saying by Iran Daily, which cited Fars News Agency.

"The two-billion-dollar project for electrification of Tehran-Mashhad railroad has been finalized and it has also received the (necessary) approval of the Iranian Economy Council and we are introducing the project to the Chinese Investment Insurance Company on behalf of the Central Bank of Iran," the official said.

"The electrification project will shorten travel time between Tehran and Mashhad to six hours from the current minimum of 12 hours as the train's top speed will hit a maximum of 200 km per hour,” Saketi said.

He highlighted that licenses for implementing the project have been obtained through 85 per cent of foreign finance. The balance of15 per cent will be financed by the Iranian government, he added.

He noted that project would be implemented within the framework of the engineering, procurement, construction and finance (EPCF) contract.

With the completion of the project, passenger capacity of Tehran-Mashhad railroad will increase from the current 14 million passengers per year to 35 million, Saketi said.

The electrification project would also increase the cargo capacity of Tehran-Mashhad railroad to 10 million tons per year as well, he noted.

The project is due to be implemented by an Iranian-Chinese consortium, including the Iranian companies of Mapna, Mapna Ehdas and Mapna International and the Chinese CMC and SU Power firms, the report said.