The Scottish Government-funded enhancement will transform journeys on the route introducing a half-hourly commuter service between Aberdeen and Inverurie and additional peak services between Inverness and Elgin.

BAM, which recently completed the on-time, on-budget £294m Borders Railway, will now oversee the delivery of the Aberdeen-Inverness Improvement Project – the first phase of which is due for completion in 2019.

Over the next four years engineers will:

Keith Brown, cabinet secretary for infrastructure, investment and cities, said: “I am pleased to witness the award of the contract to BAM for the first phase of the Aberdeen to Inverness Improvement Project.

“Today marks the Scottish Government’s landmark investment package of £170m to improve a key route connecting both northern cities, which will make journeys shorter, more frequent and more comfortable for those who use this important line regularly.

“This project is especially valuable for the region for, as well as the clear benefits to passengers and freight users, it will also support jobs and growth, providing an economic boost to the cities and communities along the entire length of the route.”

Phil Verster, managing director of the ScotRail Alliance, said: “BAM’s appointment is the first step on a journey that will deliver significant benefits for the North and North East of Scotland.

“Reduced journey times and the ability to run bigger trains with more seats will transform customers’ experience of rail travel.

“This is what the ScotRail Alliance is all about; connecting people with jobs, businesses with customers, and giving communities across Scotland the opportunity to grow and prosper.”

Jerry Dickson, operations director for BAM, said: “Together with our partners AECOM, CH2M, Stobart Rail and Siemens, we are looking forward to commencing work on the Aberdeen to Inverness Enhancement Programme. This essential programme of works will improve connectivity between the major cities of Aberdeen and Inverness, with wider enhancements for the local communities in the north of Scotland.

“We are particularly proud to have been awarded this contract in our 150th anniversary year, which has also seen BAM and Network Rail successfully re-open the Borders Railway, which is now providing an essential rail link between Edinburgh and the Scottish Borders.”

Engineers are currently carrying out ground investigation, site survey and vegetation clearance works on the line as part of the project and main construction works will begin in spring 2016.

Plans for new stations at Dalcross and Kintore are being developed separately by HITRANS and NESTRANS respectively, while a further phase of the Aberdeen-Inverness Improvements Project is to be developed.