A £220 million contract to build a 30-mile railway between Edinburgh and Tweedbank in the Borders has been handed to BAM Nuttall in a deal expected to create around 500 jobs.

The Dutch engineering firm was left as the sole bidder to build the Borders Railway before Government agency Transport Scotland abandoned its own tendering competition last year.

Network Rail, which subsequently took over the project, announced yesterday the design and construction of the route would be carried out by BAM Nuttall, with trains due to enter service in 2015.

The project, which is being funded by the Scottish Government, will re-establish the first passenger train service to the Borders in more than 40 years after the Waverley line between Edinburgh and Glasgow fell victim to the Beeching cuts in 1969.

Its overall budget has risen from £295m to £348m.

Transport Minister Keith Brown said: "The awarding of this contract so quickly after Network Rail took over delivery of the Borders Railway is a huge step forward for this vital project."