China set to help with the $500 million rail link that would eventually stretch to Kunming

CAMBODIA and Vietnam have signed a deal to link their railways, Cambodia's foreign minister said Saturday, helping revive long-running plans to link Asia by rail.

Foreign Minister Hor Namhong said China would help Cambodia with the railroad link to Vietnam, which will cost more than US$500 million.

"China has promised to build the railroad from Phnom Penh to Vietnam as part of the project to create a link from Singapore to Kunming in China," Hor Namhong said on his return from regional meetings in Hanoi.

"The railroads are very important for Cambodia's economy because we can then export goods to other Southeast Asian countries at low cost," he told reporters at Phnom Penh International Airport.

Cross-border trade between Cambodia and Vietnam totalled $1.7 billion in the first eight months of this year, Hor Namhong added.

Cambodia is linked to its western neighbour Thailand by a track that is no longer in use.

Cambodia's civil war only ended in the 1990s, and trains crawl along dilapidated tracks.

It has long been a dream to connect Asia by rail, and many of the gaps in the railway are in Southeast Asia, with only Singapore, Malaysia and Thailand operating cross-border links.