Thai cabinet on Tuesday approved the draft design contract of the Thailand-China railway project to pave the way for the signing early next month.

"Thailand will use this contract to hire China's state enterprise to do the detailed design for the railway project, including elevated tracks, tunnels, bridges and stations," Kobsak Pootrakool, vice minister at the Prime Minister's Office told media after the cabinet meeting.

Kobsak said the planning phase will take 10 months and the design work will cost Thailand some 1.7 billion baht (51 million U.S. dollars).

According to Chinese Embassy in Bangkok, China and Thailand plan to sign the design contract and the supervision contract early September in order to finally start the construction in October.

The first phase, a 253 km high speed railway running from Bangkok to the northeastern province of Nakhon Ratchasima, is approved by Thai cabinet in July.

The first phase is scheduled to be operational by 2021.

A planned second phase will run from Nakhon Ratchasima to Nong Khai on Thai-Lao border to be connected with the the China-Laos railway to form the artery railway from Bangkok to Kunming in southern China.

Sections of the planned cross-border railway outside Thailand are already under construction.

Thai government reiterated that the second phase will be built in the near future while the Chinese embassy said on Saturday that "the preparation work for the second phase of the project will start soon."