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Zhetygen, August 3 (Interfax-Kazakhstan) - A construction of a new railway line from Zhetygen to Korgas (Khorgos, on the border with China) was commenced on Monday in Almaty region (in the south east)

Kazakh President Nursultan Nazarbayev took part in the opening ceremony, an Interfax-Kazakhstan correspondent reported.

"Today we begin a very important construction project for our country. A 298 kilometer long Zhatygen-Korgas railway line will become a second route of our economic ties with China," Nazarbayev said during the ceremony.

According to the president's press office, the total cost of construction will make up 147.4 billion tenge. Construction may be completed in 2012.

A new railway line will pass through Ili, Talgar, EnbekshiKazakh, Uigur and Panfilov districts of Almaty region.

"The project foresees establishing of a second railway border crossing point on the border with China, which will ensure the rise in freight traffic volumes," the press office said in a statement.

Construction will be financed by means of the republic's budget and own funds of Kazakhstan Temir Zholy National Railway Company (KTZh).

As reported, in 2008 ENRC Logistics (a subsidiary of ENRC) won the bid for the construction and operation of a 298 kilometer rail link between Korgas and Zhetygen, including 4 stations, 10 sidings and 25 bridges, but in late July 2009 has agreed with the Government of the Republic of Kazakhstan to terminate the Group's concession to construct and operate the 'China Gateway Project', a rail link and transshipment point between the Republic of Kazakhstan and the Peoples' Republic of China.

Eurasian Natural Resources Corporation is a vertically integrated metals and mining group operating in Kazakhstan. The company has its own energy and transportation organizations. ENRC's scope of operations includes exploration, production, processing, electricity generation, logistics and marketing.