Chinese state-owned firm Sinohydro has won a $167m contract to upgrade a major highway in Bangladesh connecting capital city Dhaka with Chittagong port.

The deal with Sinohydro covers seven of the ten construction segments of the 140km highway that will be upgraded under the $240m (BDT1,655 crore) project.

The project involves expanding the existing two-lane highway to a four-lane expressway that would cut travel times on the road by two hours.

The project will be financed by Japan under the Japan Debt Cancellation Fund and is expected to be complete in three years, according to Reuters.

The highway is considered a major artery of the country’s transport system and currently carries a load of 19,000 vehicles, which is expected to rise by 10% a year.