Joint venture will see the construction of a new rail line from East to South London by 2010

A joint venture between Balfour Beatty and Carillion has been awarded the 拢363m contract to create the new East London rail line.

The project, which is the first phase, will extend from Dalston Junction in the North to West Croydon in the South of the city. It is scheduled for completion in late 2010 and construction works will begin early next year.

The companies said they were delighted to have been selected for this project, which is the cornerstone of Transport for London's 拢10 billion investment programme to give London a 21st century transport system.

Phase two of the project will further extend the line west to Clapham Junction and connect the North London Line stations at Canonbury and Highbury & Islington.

The proposed extension of the East London Line was one of the key factors in the bid for the 2012 Olympic Games. The line is expected to play major role in transporting people to and from the 2012 Olympic Games and also trigger substantial development and regeneration initiatives in some of London's most deprived boroughs.

As well as work on track, signalling, telecommunications and electrification, the construction will see the creation of two large new bridges, new stations and a new depot at New Cross Gate.