The state—run New Light of Myanmar newspaper reported on Thursday the project will start with a 79—mile (126 kilometer) rail link between the border town of Muse and Lashio in Myanmar’s northeastern Shan State. That first phase is expected to be built in three years.

Myanmar and China plan to build a railroad together that will link China’s landlocked Yunnan province to a deep—sea port being built in Myanmar’s Rakhine state.

The state—run New Light of Myanmar newspaper reported on Thursday the project will start with a 79—mile (126 kilometer) rail link between the border town of Muse and Lashio in Myanmar’s northeastern Shan State. That first phase is expected to be built in three years.

The completed railroad will extend to a port China is building in Myanmar’s Kyaukphyu town in northwestern Rakhine. China National Petroleum Corp. is already building a 480—mile (770—kilometer) pipeline from Rakhine to Yunnan.

The newspaper said the memorandum of understanding was signed on Wednesday in the capital Naypyitaw.

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