The highly anticipated Beijing-Shanghai high-speed railway will begin construction next month, a Ministry of Railways official said.

The ministry source, who did not want to be named, confirmed in a phone interview yesterday that preparations are now being made for a ceremony to commence construction of the system.

Based on that timeframe, the railway will be completed by 2013. Trains running on the 1,318 km railway will then be able to travel at speeds of up to 350 kph and will cut travel time between the two cities from the current 10 hours to less than five.

The project involves one of the largest amounts of investment on railways. Industry sources say it will cost more than 200 billion yuan ($27 billion), more than the 180 billion yuan needed for the Three Gorges Project.

Officials say the project will also employ a set of locally developed high-speed railway technology for the first time.

The country is said to have already mastered the technologies needed to lay high-speed rail tracks and trains.

The first homegrown train able to reach 300 kph rolled off the production line over the weekend, marking China's entry into "an elite club that includes Japan, France and Germany to become the fourth country capable of making such trains", Wang Yongping, Ministry of Railways spokesman said.

Officials added that the railway still relies on foreign companies, such as the Germany-based Siemens, to build its signal network and other systems.

China has been upgrading the scale and speed of its railway network in the past decade, and the 11th Five Year Plan period (2006-10) is regarded as a critical period for building high-speed railways that can travel at speeds of 200 kph as part of an extensive transport network.

At least eight express passenger railways were being constructed as of last year.

Xinhua contributed to the story