The State Railway of Thailand has started excavating the 6.2-kilometre tunnel which will connect Den Chai in Phrae with Chiang Rai's Chiang Khong district, which lies on the banks of the Mekong River.
The project is part of the 323.10km-long upgrades which will see another track laid out next to the existing rail track between Den Chai and Chiang Khong, said SRT's public relations chief, Ekkarat Sriarayanpong.
"Workers have begun boring into the rock face and are due to install a primary support structure for the tunnel," he said.
Once completed, the dual track upgrades will enable onward connections to Laos and Myanmar, which the government hopes will lower logistics costs and boost trade with Thailand's neighbours.
The upgraded tracks were designed without any level crossings in an effort to reduce traffic jams, so underpasses and/or overpasses will be constructed at 254 locations where the tracks intersect a road.
The dual track upgrades have been divided into three contracts, starting with the Den Chai-Ngao section, followed by the Ngao-Chiang Rai section and finally by the Chiang Rai-Chaing Khong section.
Land expropriation for the project will affect 7,704 plots with privately-held land title deeds, 783 Sor Por Kor agricultural land plots, 13 plots of forest land and 465 plots of land designated for other purposes.
The double tracks will feature 26 stops -- including four major stations, nine small stations and 13 halts -- through four tunnels.
Four cargo loading platforms and a warehouse will be built in Chiang Khong station with a road connection to the border in Chiang Khong.
In addition, each station will be decorated based on the identity of local areas.
The project will run from Den Chai station in Phrae, moving northward through Lampang and Phayao before ending at the Chiang Khong border in Chiang Rai.
Mr Ekkarat said the double-track upgrades from Den Chai to Chiang Khong will be finished by 2028.
Once completed, the project will shorten the travel time from Den Chai to the border to just 1.5 hours, attract more tourists and boost locals' income, he said.