A Chinese company has entered into an agreement with the Pakistani government for building a Rapid Mass Transit System in this eastern city that is considered the country's cultural capital.

Chinese firm Noranko will invest USD 1.7 billion for the Lahore Rapid Mass Transit System that will prove to be a milestone in providing modern transport facilities to the people of Lahore, officials said.

"During the first phase of the project, a 27-km distance from Shahdara to Gajju Matta will be covered while another Chinese company, Fotan, will operate 200 new buses on urban routes of the city. Out of these, 111 vehicles will be provided by the end of June," Lahore Transport Company chairman Khwaja Ahmed Hassan said.

Hassan said LTC will provide all possible assistance to private companies for facilitating the public.

He said new bus terminals and depots will be set up in different parts of Lahore to implement a "transport action plan" in an effective manner.

"There will be no compromise on the standard of the new buses and it will be ensured that buses meeting standards and specifications approved by the LTC's Board of Directors operate on urban routes," he said.

Punjab Chief Minister Shahbaz Sharif's recent tour of China has led to a "major breakthrough" in the field of investments in the transport sector, he said.

Sharif had made it clear to China that his government is interested in trade, not aid, he added.