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The explosion and fire broke out following a collision between a Sabah Railways train and a fuel tanker here on Monday.
The 5.40pm accident occurred at Jalan Kepayan-Jalan Lintas junction near the Kota Kinabalu international airport.
Ambulances and fire trucks were seen rushing to the scene.
The number of casualties have yet to be determined.
A thick column of smoke could be seen from miles away and the mishap caused brought traffic to a virtual standstill along both busy roads.