Work to upgrade Yangon's circular rail line started on December 15, according to the Ministry of Rail Transport.
To promote rail use, the project, partly funded by Japan International Cooperation Agency (JICA), is due to raise speeds to 40 mph.
“JICA will provide technology know-how and investment,” said Kyaw Soe Lwin, the manager of Myanmar Railways.
The track is being replaced, upgraded and strengthened. The number of stations will be reduced and new Japanese carriages ordered.
The track would be secured with bricks walls and squatters removed, he said.
Tokyo has made a low-interest loan of ¥25 million.