Connected Transaction

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contents of this announcement, makes no representation as to its accuracy or
completeness and expressly disclaims any liability whatsoever for any loss
howsoever arising from or in reliance upon the whole or any part of the
contents of this announcement.

 (A joint stock limited company incorporated in the People's Republic of China 
                            with limited liability)                            
                              (Stock Code: 0576)                               

                             Connected Transaction                             
                  Financial Assistance offered to Shangsan Co                  


On 28 May 2007, the Company entered into the Loan Agreement with Shangsan Co
and the Bank whereby the Company agreed to provide a loan of a principal amount
of RMB370 million (approximately HK$377 million) with a maturity period of one
year to Shangsan Co through the Bank.

Shangsan Co is a connected person of the Company as Huajian Transportation, a
substantial shareholder of the Company, owns more than 10% equity interest in
Shangsan Co, which is also owned as to 73.625% by the Company. The provision of
the Loan under the Loan Agreement by the Company to Shangsan Co thus
constitutes a connected transaction for the Company under Rule 14A.13(2)(a)(i)
of the Listing Rules.

As the value of the Loan provided under the Loan Agreement represents less than
2.5% of the applicable percentage ratio, and the Loan Agreement is on normal
commercial terms, the provision of the Loan is exempt from the approval of the
independent shareholders of the Company but subject to the requirements under
Rule 14A.66(2) of the Listing Rules to disclose such transaction in this
announcement and in the next published annual report and accounts of the
Company.

Group structure (simplified):

Please refer to the link below:
http://xprnnews.xfn.info/ZhejiangExpressway/20070605/HK076733.jpg

Background

On 28 May 2007, the Company entered into the Loan Agreement with Shangsan Co
and the Bank. Pursuant to the Loan Agreement, the Company will advance the Loan
to the Bank, which will in turn advance the Loan to Shangsan Co. Interest will
be payable by Shangsan Co to the Company at a rate of 8.01% per annum. All
handling fees payable to the Bank in connection with the Loan will be paid by
Shangsan Co.

The Loan was advanced in a single payment on 28 May 2007, and will be repayable
in a single payment on 28 May 2008.

Pursuant to PRC laws, only authorised banks are permitted to advance loans.
Inter-company loan is typically made through back-to-back arrangement with an
authorised bank. The arrangement with the Bank was made to comply with such
legal requirements. The Bank was providing the loan services as part of its
ordinary course of business.

Reasons of the transaction

The purpose of the Loan is to facilitate an intended investment activity of
Shangsan Co, details of which will be set out in a separate announcement later.

On the basis of the foregoing paragraph, the Board, including the independent
non-executive Directors, believes that the terms of the Loan Agreement are fair
and reasonable, are on normal commercial terms, and in the best interests of
the Group and the Shareholders as a whole.

Connected Transaction Implications

Shangsan Co is a connected person of the Company as Huajian Transportation, a
substantial shareholder of the Company, owns more than 10% equity interest in
Shangsan Co, which is also owned as to 73.625% by the Company. The provision of
the Loan under the Loan Agreement by the Company to Shangsan Co thus
constitutes a connected transaction for the Company under Rule 14A.13(2)(a)(i)
of the Listing Rules.

As the aggregate value of the Loan provided under the Loan Agreement represents
less than 2.5% of the applicable percentage ratio, and the Loan Agreement is on
normal commercial terms, the provision of the Loan is exempt from the approval
of the independent shareholders of the Company but subject to the requirements
under Rule 14A.66(2) of the Listing Rules to disclose such transaction in this
announcement and in the next published annual report and accounts of the
Company.

Information of the Group and Shangsan Co

The Company was incorporated on 1 March 1997 in the PRC and is a joint stock
limited company with a registered share capital of RMB4,343,114,500
(approximately HK$4,429,976,790) at present. The main business of the Group is
investment in, development, operation, management, and collection of tolls, of
the Shanghai-Hangzhou-Ningbo Expressway and the Shangsan Expressway, both in
the Zhejiang Province of the PRC, and businesses ancillary to the operation of
the expressways, such as billboard advertising and operation of service areas
on the expressways.

Shangsan Co owns and operates the Group's business relating to collection of
road tolls in respect of the Shangsan Expressway.

Definitions

In this announcement, the following expressions have the meanings set out below
unless the context requires otherwise.

"Bank"                       a PRC incorporated bank;

"Company"                    Zhejiang Expressway Co., Ltd. ;

"Directors"                  the directors of the Company;

"Group"                      the Company and its subsidiaries;

"HK$"                        Hong Kong dollars, the lawful currency of the Hong
                             Kong Special Administrative Region;

"Huajian"                    Huajian Transportation Economic Development Center,
                             a State-owned enterprise;

"Listing Rules"              the Rules Governing the Listing of Securities on the
                             Stock Exchange of Hong Kong Limited;

"Loan"                       a loan of a principal amount of RMB370 million
                             (approximately HK$377 million), made pursuant
                             to the Loan Agreement;

"Loan Agreement"             a loan agreement dated 28 May 2007 entered into
                             between the Company, Shangsan Co and the
                             Bank whereby the Company agreed to provide the Loan
                             to Shangsan Co;

"percentage ratio"           has the meaning as ascribed to it under the Listing
                             Rules, as applicable to the transaction pursuant
                             to the Loan Agreement;

"PRC"                        the People's Republic of China;

"RMB"                        renminbi, the lawful currency of the PRC;

"Shangsan Co"                Zhejiang Shangsan Expressway Co., Ltd, a
                             PRC-incorporated company;

"Shareholders"               the shareholders of the Company;

The exchange rate used for reference purpose in this announcement is HK$1.02 to
RMB1.00.


                                                              By Order of the Board
                                                                 Zhang Jingzhong
                                                                Company Secretary

Hangzhou, 30 May 2007

As at the date of this announcement, the executive Directors are: Messrs. Geng
Xiaoping, Fang Yunti, Zhang Jingzhong and Jiang Wenyao; the non-executive
Directors are: Messrs. Zhang Luyun and Zhang Yang; and the independent
non-executive Directors are: Messrs. Tung Chee Chen, Zhang Junsheng and Zhang
Liping.