Three contractors have signed a deal to build a section of Melbourne’s Suburban Rail Loop (SRL), a project to improve lateral connections in the city.

The Terra Verde consortium consists of GS Engineering & Construction of Korea (33.5%), Bouygues of France (33%) and Webuild of Italy (33.5%). It has been chosen by the SRL Authority of Victoria to construct SRL East – a 10km double-bore tunnel with two underground station “boxes” and 39 lateral connections.

The signing of the US$1bn contract comes after the team was named preferred bidder in July.

SRL East will be part of a 90km rail system that will link the city’s existing rail systems.

It will let people reach destinations in the suburbs without going in and out of the central business district.

Three “super hubs” at Clayton, Broadmeadows and Sunshine will offer a choice of routes.

The next contracts up for award are two lots of three stations: the first at Glen Waverley, Burwood and Box Hill, and the second at Cheltenham, Clayton and Monash.

These will be followed by the Linewide contract, which covers building the trains, the fit-out of the tunnels and the operation of the network.

Yoon Hong Huh, chief executive of GS E&C, said the SRL East contract was “a significant step in expanding our footprint in Australia’s infrastructure sector.

“As part of Terra Verde joint venture, we are excited to apply our global tunnelling expertise and local knowledge to deliver this city-shaping project.”

For its part, Webuild notes that the win continues a relationship with Melbourne that began in 1985 when it worked on the Melbourne Underground Rail Loop.

Globally, the company has 63 tunnel-boring machines, including those being assembled for upcoming projects.

Construction is set to commence this year, with the project expected to be completed by 2035.