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This afternoon, Federal Railroad Administrator Joseph Szabo, Illinois Gov. Pat Quinn and Sen. Richard Durbin (D-Ill.) announced the Illinois Department of Transportation, FRA and Union Pacific Railroad signed a $685 million grant agreement that will enable the state to begin construction on the next phase of a high-speed rail line between Chicago and St. Louis.

The funds are part of the $1.2 billion in High-Speed Intercity Passenger Rail money allocated to Illinois through the American Recovery and Reinvestment Act. The Illinois DOT and UP will use the funds to construct new track between Dwight and Lincoln, and Alton and the Mississippi River, as well as install a modernized signal system between Dwight and Alton. Construction is scheduled to begin on April 5.

Work will be completed through UP, by members of the Brotherhood of Maintenance of Way and Brotherhood of Railway Signalmen under their national contracts with the Class I. More than $650 million of the total $1.2 billion in federal grants will be awarded to “competitively selected contractors,” according to a press release issued by Quinn’s office. To help firms seeking to bid on the work, UP will host an event on April 20 at Chicago’s Navy Pier.

In September, Illinois DOT and UP launched construction on the first phase of the project, a $98 million upgrade between Lincoln and Alton.

Illinois DOT plans to begin operating the first 110 mph trains between Chicago and St. Louis as early as next year. Upgrades to the entire Dwight-Alton portion of the line are expected to be complete by 2014.

Meanwhile, the state is conducting a study to determine the feasibility of operating 220 mph service between Chicago and St. Louis.

In December, the Illinois DOT launched a Tier 1 Environmental Impact Statement to study the potential for building a second set of tracks between Chicago and St. Louis, identify the preferred route for trains between Chicago and Joliet, and analyze the best path through Springfield. The study is expected to be complete in 2012.