Plans for a 2.5 billion yuan (about HK$2.32 billion) tram network in Kunming, the Yunnan provincial capital, have been dropped in favour of a cheaper guided bus-way system using locally manufactured vehicles. This follows a reassessment of a pre-feasibility study carried out by the Zurich Transport Authority (ZTA) in Switzerland in association with the Kunming municipal government. ZTA deputy director Ernst Joos said the review found that 40 per cent of the project cost covered the purchase of foreign trams. Consequently 'it was imperative to look for possibilities to build vehicles in China, to achieve a better price and provide opportunities for the domestic workforce,' Mr Joos said. He said there had been some contacts between Swiss tram makers and mainland tram and locomotive factories. The Kunming city authorities though have initially decided to go ahead with a pilot programme using buses on a dedicated system that will be converted later to a tram network. Mr Joos said this first stage involved the construction of guideways along existing streets that would separate the buses from normal traffic. There would also be special passenger boarding points, preferential traffic control measures and new ticketing equipment. The aim was to establish a research project that would be used to develop plans for the tram system while links were cemented with mainland manufacturers and financing issues were considered. Kunming municipal government construction commission director Hu Xing confirmed the city would go ahead with the tram system.