The joint venture, headquartered in Beijing, is already operating bus services in Nanjing and trams in Shenyang . Its operation also includes two metro lines in Mumbai, one in Seoul and the Sydney tram.

Cyril Carniel, vice-president of RATP's business in Asia and the Middle East, said modern tram systems were becoming more popular on the mainland for their environmental benefits over other forms of transport.

"Soon [trams] will be a big transportation system in China," he said, noting that Shanghai planned to expand its tram system to 800km by 2020. Other cities, such as Beijing and Zhuhai , are also considering building tram systems.

"It's a new market. It's a big market and we have the expertise, so it makes sense," Carniel said.

Jean-Marc Janaillac, chairman and chief executive of Transdev, added that trams were necessary in a public transport system to fill the gap between metro systems, which are expensive to build but efficient, and buses, which are cheaper but can carry fewer people.

Hongkong Tramways has suggested the government build a modern tram system in Kai Tak, instead of the proposed elevated monorail. The company said it would consider bidding for the project whether it is a tram or monorail system.

Carniel said the companies would also look at other opportunities in Hong Kong, because "it is a nice place for a transportation company to do business".

Janaillac said he hoped problems of congestion in the city could be alleviated in the future, to allow the trams to become a more efficient system.

Hongkong Tramways is celebrating its 110th anniversary this year. The first tram in the city, a single-decker, was introduced on July 30, 1904. Double-decker trams were introduced in 1912, with first class on the upper deck.

The number of passengers using the city's tram system reached its peak in 1981, but has since gradually declined. Last year, an average of 200,000 passengers used the system daily.