"We have two projects on the railway, it will pass by the South or North Van. But we are still not sure about the area." APA's Turkish bureau reports quoting Turkish transportation minister Ismet Yilmaz as briefing journalists.

Iranian president Mahmud Ahmadinejad and Turkish Prime Minister Recep Tayyip Erdogan have already reached an agreement on the project.

"We have already discussed the issue with Iranian transport minister Mahammad Rahmati and Iranian side would take all the responsibility for the investment. Delegation will visit Iran next week to discuss rail way project. I assume Northern Van project is more real" said Mr.Yilmaz

The 250km railway which consists of two electrical lines with the maximum speed of 125 km/h would cost around of $450 million.

The Van project will connect Iran's railway to Europe.