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Construction will start next year on the $71.4 million railroad project that the feds authorized for Northwest Indiana in early 2010, state transportation officials said Monday.

The project, which is supposed to relieve congestion in a bottleneck from Porter County to the Indiana/Illinois state line, is paid solely by stimulus funding. It’s expected to create about 700 jobs each year for two years.

“Right now, they’re still working on the final details of the agreement between Norfolk Southern, Amtrak and the Federal Railroad Administration. They’re meeting every week to two weeks and hope to have it finalized by the end of the year,” Jim Pinkerton, a spokesman for the Indiana Department of Transportation, said. “Once the agreement is finalized, they’ll go ahead and authorize the final design work to go ahead. That’ll probably take place in first quarter of 2011. The project will be under way during the 2011 construction season.”

The Northwest Indiana plan will reduce train delays by 11.6 minutes per 100 train miles, according to one study, and make it easier for freight trains to pass. The project includes relocation, reconfiguration and addition of high-speed crossovers and improving the signal system at seven locations in Gary, Burns Harbor, Porter and Whiting.