The upgrading of the 825.9-km Xining-Golmud section of the Qinghai-Tibet railway started on June 9.
The 740-million-yuan (89 million U.S. dollars) project is scheduled to be finished by October 2001. Listed as one of China's major State-funded projects, the new rail section is aimed to increase the line's handling capacity by 30 percent to meet the growing demand.
At present, the line moves six million tons of goods and 3.13 million passengers each year. It is estimated that about 9.86 million tons of locally produced oil, ore and raw salt is transported out of Qinghai Province annually.
The Qinghai-Tibet railway line has handled 180 million tons of goods and 80 million passengers since it opened in 1984.