DISCLOSEABLE TRANSACTION

Zhejiang Expressway Co
30 November 2004

The Stock Exchange of Hong Kong Limited takes no responsibility for the 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)


             DISCLOSEABLE TRANSACTION AND RESUMPTION OF TRADING


On 26th November, 2004, the Company entered into the Agreement with Jiaxing
Jiashao and Shaoxing Communication to set up the JV Co. for the purpose of
developing the Project. The Company, Jiaxing Jiashao and Shaoxing Communication
will be interested in 35%, 35% and 30% of the share capital, respectively, of
the JV Co.



The Company will, in aggregate, make a total capital contribution of
RMB1,145,375,000 to the JV Co. Therefore, the transaction contemplated under the
Agreement constitutes a discloseable transaction of the Company under the
Listing Rules. A circular containing further details of the Agreement, the
Project and the JV Co. will be despatched to the Shareholders in due course.



At the request of the Company, trading in the shares of the Company has been
suspended from 9:30 a.m. on 29th November, 2004 pending the issue of this
announcement. Application has been made to the Stock Exchange for the resumption
of trading in the shares of the Company from 9:30 a.m. on 30th November, 2004.



The Directors announce that, on 26th November, 2004, the Company entered into
the Agreement to set up the JV Co. for the purposes of and in connection with
the Project.


BACKGROUND



The Company was incorporated on 1st March 1997 in the PRC and is a joint stock
limited company, currently with a registered share capital of RMB4,343,114,500
(HK$4,097,277,830). The main business of the Group is investment in and
development, operation, management and toll collection of Shanghai
-Hangzhou-Ningbo Expressway and Shangsan Expressway, both in Zhejiang Province
of the PRC, as well as businesses ancillary to the operation of the two
expressways, such as billboard advertising and operation of service areas on the
expressways.



PROPOSED STRUCTURE OF THE JV CO.



The proposed shareholding structure of the JV Co. is as follows:


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PRINCIPAL TERMS OF THE AGREEMENT



The principal terms of the Agreement are as follows:


Date                        26th November, 2004.

Parties                     The Company, Jiaxing Jiashao and Shaoxing Communication. To the best of the Directors'
                            knowledge, information and belief and after having made all reasonable enquiry, Jiaxing
                            Jiashao and Shaoxing Communication, together with their respective ultimate beneficial
                            owners, are third parties independent of the Company and its connected persons (as defined
                            in the Listing Rules) of the Company.

Initial Registered Capital  RMB100,000,000, which shall be contributed by the Company, Jiaxing Jiashao and Shaoxing
of JV Co.                   Communication in accordance with their respective equity holdings in the JV Co.
                            Accordingly, the Company, Jiaxing Jiashao and Shaoxing Communication shall contribute
                            RMB35,000,000, RMB35,000,000 and RMB30,000,000 respectively to the registered capital of
                            the JV Co.

                            The registered capital of the JV Co. shall be paid up within 7 days of the first
                            shareholders' meeting of the JV Co. which was held on 26th November, 2004.

Total Capital Contribution  RMB3,272,500,000 (inclusive of the initial registered capital), which shall be contributed
to the JV Co.               by the Company, Jiaxing Jiashao and Shaoxing Communication in accordance with their
                            respective equity holdings in the JV Co.

                            Accordingly, the Company, Jiaxing Jiashao and Shaoxing Communication shall contribute in
                            cash RMB1,145,375,000, RMB1,145,375,000 and RMB98,175,000 respectively to the total capital
                            investment in the JV Co.

                            Other than the registered capital, the parties shall fix the timetable for the payment of
                            the remaining capital contribution within 15 days upon obtaining the government approval
                            for the feasibility report of the Project. There is no guarantee as to when the JV Co. can
                            obtain the relevant government approval.

Total Amount of Investment  The total amount of investment for the Project is currently estimated to amount to
of the Project              RMB9,350,000,000 (subject to final determination). Save for the capital contribution, there
                            is currently no timetable for the contribution of the remaining amount of investment which
                            shall be financed by the JV Co. depending on the progress of the Project.

                            Save as disclosed in this announcement, there is no other capital commitment by the Company
                            under the Agreement.

Business Scope              The business scope of the JV Co. includes (subject to the approval by the Administration
                            for Industry and Commerce of the PRC) investment in and financing, construction, toll
                            collection, maintenance and management of expressway, as well as the provision of other
                            ancillary services.

Board representation        The board of the JV Co. shall comprise nine directors, of which, each of the Company,
                            Jiaxing Jiashao and Shaoxing Communication shall nominate three directors to the board of
                            the JV Co. and the chairman of the JV Co. shall be nominated by the Company.

Profit sharing              The Company, Jiaxing Jiashao and Shaoxing Communication shall share in the profit and loss
                            of the JV Co. in accordance with their respective equity holdings in the JV Co.

Pre-emptive right           Upon the formation of the JV Co, if any party intends to transfer its equity interests in
                            the JV Co., it has to obtain the prior consent of the other parties and on the same terms
                            and conditions, the other parties shall have the pre-emptive option to purchase that party's
                            interest in the JV Co.



INFORMATION ON THE PROJECT



The main business of the JV Co. will be the development, operation and
maintenance of the Project.



Jiaxing-Shaoxing Expressway starts from the junction of Shanghai-Hangzhou
Expressway and Zhapu-Jiaxing-Suzhou Expressway in the southwestern side of
Jiaxing, Zhejiang Province and ends at the junction of Hangzhou-Ningbo
Expressway and Shangsan Expressway in the western side of Shangyu, Shaoxing with
a total length of 69.23 km, including 12.32 km bridge crossing over the Hangzhou
Bay. There are a total of 11 interchanges along the entire expressway.



Jiaxing-Shaoxing Expressway is planned to be designed as an 8-lane expressway
with a designed traffic speed of 100 km / hour.



It is planned that the Jiaxing-Shaoxing Expressway will commence operation by
the end of 2008.



REASONS FOR INVESTMENT IN THE JV CO. AND THE PROJECT



The reasons for the investment in the Project are two-fold. As far as the
strategic position is concerned, the Project links with Shanghai-Hangzhou and
Hangzhou-Ningbo Expressway and is connected to Shangsan Expressway, and
accordingly is closely related to the existing highway network of the Company.
The Project is not only an important integral part of the trunk highway planning
of Zhejiang province, but also an important integral part of the national road
network planning. The Directors are of the view that Jiaxing-Shaoxing Expressway
serves as a shortcut linking up the north-south traffic of Hangzhou Bay with an
extensive radiation area and therefore, is likely to attract a substantial
volume of traffic flow.



As far as future traffic demand is concerned, rapid growth in traffic volume has
created much pressure on the existing roads. Several national roads are
operating under a saturated condition, while traffic volume on expressways is
also very substantial, particularly the Jiaxing-Hangzhou-Guzhu (Shaoxing)
section. According to the estimation of the Zhejiang Transport Planning and
Design Institute, the traffic volume in the region will increase at an annual
average growth rate of 7.55% in the next 20 years. The Directors are of the view
that the financial return of the Project is expected to meet the investment
criteria set by the Company which is based on its weighted average cost of
capital, and could be further enhanced by expanding the ancillary services
related to the expressway.



The completion of the Project may cause traffic diversions in certain sections
of Shanghai-Hangzhou-Ningbo Expressway. With the investment in the Project and
as one of the majority shareholders, the Project is beneficial to the Group as a
whole.



As the Project is still in a preliminary stage and the feasibility report of the
Project has not been approved by the relevant authorities of the State, the
Project faces a number of uncertain factors, including the implementation time
of the Project, investment scale, operation period, toll levels and the project
construction and operation risks. Such risks may reduce the financial return of
the Project.



Based on the above reasons, the Directors believe that the terms of the
Agreement, which were determined after arm's length negotiation, are fair and
reasonable and are in interests of the Company and the Shareholders as a whole,
and that the transaction contemplated under the Agreement constitutes a
discloseable transaction of the Company under the Listing Rules and is required
to be disclosed by way of this announcement and a circular containing further
details of this transaction to be despatched to the Shareholders in due course.



FUNDING FOR THE PROJECT



Amongst the estimated total cost of approximately RMB9,350,000,000 for the
Project, RMB3,272,500,000 will be contributed by the Company, Jiaxing Jiashao
and Shaoxing Communication in accordance with their respective equity holding in
the JV Co. as equity capital, with the remaining balance to be financed by the
JV Co. itself through bank borrowings.



As the existing projects of the Company generate a substantial amount of cash
flow and the Company has, as at the date of this announcement, immediately
realisable cash equivalents of approximately RMB1,000,000,000 and cash and time
deposits of approximately RMB500,000,000, the Company has adequate financial
resources to support the capital commitments to the Project, while still being
able to maintain a positive balance of its cash flow at the same time. All
capital commitment of the Company under the Agreement will be funded from the
internal financial resources of the Company.



INFORMATION REGARDING JIAXING JIASHAO AND SHAOXING COMMUNICATION



Jiaxing Jiashao is a PRC state-owned limited liability company with a registered
capital of RMB50,000,000. Jiaxing Jiashao is engaged in the business of
investment in and development, constructuion, maintenance, operation and
management of expressway.



Shaoxing Communication is a PRC state-owned company with a registered capital of
RMB500,000,000. Shaoxing Communication is engaged in the businesses of
transportation infrastructure facilities, ancillary facilities and related
property investment, development, asset management and the letting out of
ancillary facilities.



RESUMPTION OF TRADING IN THE SHARES OF THE COMPANY



At the request of the Company, trading in the shares of the Company has been
suspended from 9:30 a.m. on 29th November, 2004 pending the issue of this
announcement. Application has been made to the Stock Exchange for the resumption
of trading in the shares of the Company from 9:30 a.m. on 30th November, 2004.



DEFINITIONS



In this announcement, unless the context otherwise requires, terms used herein
shall have the following meanings:


Agreement                        means the agreement entered into between the Company, Jiaxing Jiashao and Shaoxing
                                 Communication dated 26th November, 2004 for the setting up of the JV Co.;

Company                          means Zhejiang Expressway Co., Ltd., a joint stock limited company incorporated in the
                                 PRC, whose shares are listed on the main board of the Stock Exchange;

Directors                        means the directors of the Company;

Group                            means the Company and its subsidiaries;

JV Co.                           means Zhejiang Jiashao Expressway Co., Ltd, a PRC limited liability company to be
                                 established by the Company, Jiaxing Jiashao and Shaoxing Communication;

Jiaxing Jiashao                  means Jiaxing Jiashao Expressway Investment and Development Limited Liability Company,
                                 a PRC state-owned limited liability company;

Jiaxing-Shaoxing Expressway      means the proposed 69.23 km Jiaxing-Shaoxing Expressway to be developed by the JV Co.
                                 in the Zhejiang province of the PRC;

Listing Rules                    means the Rules Governing the Listing of Securities on the Stock Exchange;

PRC                              means the People's Republic of China;

Project                          means the development and operation of the Jiaxing-Shaoxing Expressway by the JV Co.;

Shaoxing Communication           means Shaoxing Communication and Investment Limited, a PRC state-owned company;

Shareholders                     means the shareholders of the Company; and

Stock Exchange                   means the Stock Exchange of Hong Kong Limited.


                                                          By Order of the Board
                                                          ZHANG Jingzhong
                                                          Company Secretary





Hangzhou, the PRC, 29th November, 2004





In this announcement, the translation of RMB into Hong Kong dollars is based on
the exchange rate of HK$1.00 to RMB1.06. Such translations should not be
construed as a representation that the amounts in question have been, could have
been or could be converted at any particular rate or at all.



As at the date of this announcement, the executive directors of the Company are:
Messrs. Geng Xiaoping, Fang Yunti, Zhang Jingzhong and Xuan Daoguang; 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.


                      This information is provided by RNS
            The company news service from the London Stock Exchange