Spain’s Fomento de Construcciones y Contratas (FCC) has won a contract to build a 185-kilometre railway in Algeria that is expected to cost almost $1.3bn.

FCC will build the railway in a joint venture with local construction company ETRHB Haddad.

The railway will connect the cities of Relizane, Tiaret and Tissemsilt in northern Algeria and is part of the government’s $147bn economic development plan for 2009-2014 that is aimed at upgrading the country’s infrastructure.

The new line will allow trains to travel at speeds of up to 160 kilometres an hour and will be built in two phases.

The first phase will be a 121.1-kilometre line that will run from Relizane to Tiaret in northern Algeria and will have five tunnels.

The second phase will run between Tiaret and Tissemsilt and will be 64.2km.

The railway will also involve the construction of seven passenger stations, five junctions, seven maintenance buildings along the length of the railway and renovation work on existing stations in Relizane and Tissemsilt.

Algeria’s Transport Ministry awarded the contract together with the country’s railway authority Agence Nationale d’Etudes & de Suivi de la Realisation des Investissement Ferroviaires (Anesrif).

FCC Group is already operating in Algeria through its water management subsidiary Aqualia, which has two projects with state-owned Algerian Energy Company. The two projects involve the construction and management of two seawater desalination plants in Mostaganem and Cap Djinet.

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