Of the 15 km railway track, 10 km falls in the Bangladesh side and the rest in India.
"An amount of Rs 580 crore was sanctioned in the wake of a meeting between the officials of the Prime Minister's office, Ministry of External Affairs and Railways ministry recently," state Transport Secretary, Samarjit Bhowick told reporters here.
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A team comprising technical experts of IRCON, representatives of state government, the Indian High Commission officials in Dhaka as well as Bangladesh Foreign Ministry officials had earlier visited the sites.
The team had decided that a 3.7-km-long flyover (viaduct) would be constructed along the five km stretch on the Indian side to save cultivable lands and the present detailed project report (DPR) would be changed, he said.
New Delhi is keen to establish the rail link as it would connect West Bengal and Tripura through Bangladesh.
The 1,700 km distance between Agartala and Kolkata through Chicken Neck near Siliguri would be reduced to 350 km if passengers from here could move through the neighbouring country.
During Bangladesh Prime Minister Sheikh Hasina's visit to New Delhi in January 2010, the two countires had agreed to lay the track between Akhaura and Agartala.
The 15-km-long Agartala-Akhaura railway route would connect the Indian Railways with the Bangladesh Railways through the North-East which would improve connectivity and boost trade between the two countries.