The Thai cabinet has approved a US$585 million project to improve the country's rail system.

The cabinet also gave the Finance Ministry authority to borrow money from the Export-Import Bank of China for the project.

The rail freight upgrade project will start next year and be completed in 2014. It will include the construction of two rail routes - one linking Khon Kaen, Nakhon Ratchasima and Laem Chabang deep-sea port in Chon Buri, and the other between the container depot at Lat Krabang and Laem Chabang.

The depot at Lat Krabang will take and store rice transported by rail from Nakhon Sawan. The two routes will serve as models for supporting the transport of containers by rail in each region.

Container depots will be set up in each region of the country to store and distribute commodities. Trucks would be used to support the rail system to save time and expense in conveying goods from regional depots to the final destination at Laem Chabang, the main gateway port for Thai exports to other countries.

Currently, up to 86 percent of goods are transported by truck. Trains account for just two percent.

The two rail routes could meet rail transport demand in the region and transport more of Thailand's important export commodities such as rice, tapioca starch and sugar.

Prime Minister Surayud Chulanont ordered agencies to speed up the construction of parallel rail tracks between Chachoengsao and Laem Chabang - already approved by the cabinet.

The rail tracks will connect and support the planned logistics system.