China Travel Service (Holdings) Hong Kong (CTS) - the unlisted parent of red chip China Travel International Investment (CTII) - is to buy six toll roads in Shandong province, sources said. The mainland conglomerate had signed a preliminary agreement with the Shandong provincial government this month, they said. The roads include the 137 kilometre Weifang-Laiyang Highway, Zibo-Binzhou Highway, Weifang-Yantai Highway and Weifang-Yanzhou Highway. Vice-director of the Shandong transportation department Duan Zhangyin confirmed that CTS was considering an investment but said the projects were subject to official approval from the central government. It is unknown whether CTS will purchase the roads on its own or with a partner. Details of how much the roads were worth were unavailable. One source said CTS would seek partners for the investments, possibly its listed arm CTII and its close partner Coastal International Holdings. CTS has been acquiring infrastructure projects in the mainland since last year. Mr Duan said the provincial government was seeking more foreign funding for its highway development. The province was hoping to have 1,590 kilometres of highway by the end of 2000; only 600 kilometres have been built to date. It would need at least 18 billion yuan (about HK$16.7 billion) to build the remaining 1,000 kilometres, he said. Shandong hoped to use foreign capital in order to concentrate the government's limited resources on the toll-free roads. 'We hope that 80 per cent of the total capital, or 15 billion yuan, will be foreign capital,' he said.