Mota-Engil is already involved in several construction works in Malawi including the construction of the M1 Lilongwe-Nsipe Road and the stalled Nsanje Inland Port.
In a statement filed with the Portuguese Securities Market Commission (CMVM), Mota-Engil said it would build the railway in 27 months [two years and three months].
The railway is part of the Nacala Corridor, a facility for transporting mining products from the Moatize Coal Mine in Mozambique which is operated by Vale.
Late last year, the Malawi Government and Vale signed a $1 billion (K168 billion) deal for the construction and rehabilitation of the railway that will transport 18 million tonnes of coal from Mozambique.
Vale Logistics, a subsidiary of mining giant Vale, will build a new line from Chikhwawa in the South to meet an existing line in Balaka.
Minister of Transport and Public Infrastructure Muhammad Sidik Mia said the Brazilian company is expected to employ 4 500 workers of which 70 percent will be Malawians.
Vale will rehabilitate 98.6 km of the existing link between Nkaya and Nayuchi.
Once the required rehabilitation is over, a locomotive will only take 38 hours to travel between Nacala and Limbe at an average speed of 50 to 70 km compared to the present when it takes between five to seven days with the train travelling at 15 to 20 km per hour.
The railway will have annual haulage of at least five million tonnes of general Malawian cargo.
Transport experts say the implementation of the rehabilitation would span three years and Malawi would be collecting a revenue worth $8 million per annum in concession fees with the Vale Mining Group.
In 2010, Vale bought 51 percent stake in Sociedade de Desenvolvimento do Corredo de Nacala (SDCN) and Caminhos de Ferro de Mozambique (CFM), a consortium that owns Central East African Railways (Cear).
Last year, Vale acquired a further 16 percent of the company at $8 million (K1.3 billion) to reach a 67 percent stake.