Bangkok (Reuters) - Thailand have signed two contracts, worth 5.2 billion baht ($157 million), with Chinese state enterprises for a high-speed rail project with China, Anon Luengboriboon, acting governor of the State Railway of Thailand, told Reuters on Wednesday.

The first contract covers the detailed engineering design of the project worth 1.7 billon baht, while the second involves the hiring of Chinese technical advisers, worth 3.5 billion baht.

The Thai government and Chinese state enterprises signed the to contracts this week, witnessed by Chinese President Xi Jinping and Thai Prime Minister Prayuth Chan-ocha on the sideline of a BRICS summit in China.

Construction of the first phase of the project, a 250-km rail line that will link the Thai capital, Bangkok, and the northeastern province of Nakhon Ratchasima, will begin in October. It is expected to be operational in 2021, according to Anon.

“The Department of Highways will build the first 3.5 km of the rail line while the rest will be open to public bidding for Thai contractors,” Anon told Reuters.

“The signing of these two contracts has officially kicked-off the Thai-Chinese high-speed rail project.”

The project has been in the making since 2014 but was beset with delays, held up by negotiations over everything from the cost and loan terms to land-development rights.

The full line will span 873 km (542 miles), linking Thailand and Laos across the Mekong river at the northeastern Thai city of Nong Khai.

The project is part of China’s Belt and Road initiative, which aims to build a modern-day “Silk Road” connecting the world’s second-largest economy by land corridors to Southeast Asia, Pakistan and Central Asia, and with maritime routes opening up trade with the Middle East and Europe.