The Inner Mongolia autonomous region will start the construction of a 1000-km rail line to transport coal next year to ease the country's coal transportation bottlenecks.

The project will start from Erdos in Inner Mongolia and end in Caofeidian in Tangshan, Hebei province. It is expected to transport 200 million tons of coal annually, sources close to the project said yesterday.

The project is in line with the government's policy to boost domestic demand.

Inner Mongolia will invest over 170 billion yuan in building railways by the year 2013, and the total length of the railways will increase to over 1,3000 km from the present 6,800 km, said Xu Jing, who oversees railway projects in the local development and reform commission.

Rail lines for coal transportation will account for an important part of the project, he said.

At present, Inner Mongolia is still facing coal transportation bottlenecks. Currently only 150 million tons of coal can be transported out from the autonomous region. This year the total coal output from the region is expected to surpass 400 million tons.

Transportation bottlenecks are often seen as major impediments to the development of China's coal industry.

The west-to-east Daqin and north-to-south Shuohuang lines are the only two trunk railways connecting coalfields and seaports.

China has announced a dramatic increase in spending on transport infrastructure to spur domestic demand.

The Ministry of Railways says investment on railway construction in the fourth quarter of 2008 will reach 150 billion yuan - equal to the total amount for the first three quarters of the year.

The government earlier said it would spend 120 billion yuan to build a second railway linking the northwestern Xinjiang Uygur autonomous region with inland cities.

Construction is expected to begin next year, with investment from the central and local governments and other sources.

The new line will be parallel to the existing Lanxin Railway linking Gansu, Qinghai and Xinjiang.

Only passenger trains will run on it.

When the new line is complete, the old 1,892 km Lanxin railway will be used by cargo trains only.

Xinjiang, a vast region in China's far west, boasts rich oil, coal and other resources and is the country's major cotton producer.

Lanxin is currently the only railway linking Xinjiang and other parts of China.