URUMQI, April 12 -- Construction of a new railway in far west China's Xinjiang Uygur Autonomous Region, which will eventually link the area with Kazakstan, got underway on Friday.

The 308 km railway from Karamay to Tacheng will cost over 5 billion yuan (840 million U.S. dollars) and be completed at the end of 2016.

When it opens in 2017, the railway is expected to carry over 10 million tonnes of freight annually and, in the long run, annual throughput will top 15 million tonnes, the local government of Tacheng Prefecture said in a press release Saturday.

From Baikouquan in Karamay to Bakti Port on the China-Kazakstan border, the railway will be part of a route linking the border with the interior regions. The line runs through Xinjiang's oil and coal areas.

"Upon completion, it will cut transportation costs by at least 30 percent," said Wan Genwei, deputy general manager of Tacheng Iron and Coal Energy Co. Ltd. The new railway will help Tacheng, which produces about 1.5 million tonnes of coal each year, expand its market share both in China and abroad.

The line will be part of the national network connecting Xinjiang with the neighboring Gansu Province and Inner Mongolia Autonomous Region and provide an easier link to Kazakstan, central Asia and, ultimately, Europe.

Xinjiang has just under 5,000 km of railways in operation, according to the regional transportation department.

Xinjiang is expected to become a national transportation hub by the end of 2015, said Zhang Dehua, deputy head of the department.