A French multinational is taking over the running of Hong Kong's famed tramways after buying a 50 per cent stake in the business from conglomerate Wharf (Holdings). Announcing the deal yesterday, the two companies said they aimed to 'bring new impetus to keep the system on track well [into its] second century of operation'. They said existing services would continue. The French company, Veolia Transport, did not say how much it paid for its stake but that it was 'far less than 100 million euros (HK$1.04 billion)'. It has an option to buy the other 50 per cent of the company. The company - formerly Connex - is a subsidiary of Veolia Environnement and operates transport systems, including tramways, around the world. It runs bus joint ventures in Anhui province and Nanjing. Veolia sees buying a half-share in Hongkong Tramways as helping provide know-how as it builds an urban rail business in China. 'Operating the light rail system in Hong Kong will give us the knowledge and expertise in mainland China. That's strategically why we chose to start in Hong Kong,' Bruno Charrade, head of operations for Veolia Transport China, said. 'Hong Kong will be a very good base for us to develop in China, where environment-friendly traffic solutions are in great demand.' Under the new ownership arrangement - which is certain to face scrutiny from environmentalists and heritage activists - Mr Charrade will replace Wharf Transport Investment director Frankie Yick Chi-ming as managing director of Hongkong Tramways. Mr Charrade said the company understood the trams were part of Hong Kong's cultural heritage. 'We are committed to protecting and preserving it,' he said. Mr Yick said: 'Our goal [in co-operating with Veolia] is to bring the tram services to a new level.' Mr Charrade said Veolia would seek to improve the company's management and technical services and the safety, efficiency and quality of its services. 'We will study our passengers first before analysing the sustainability of the existing system,' he said. But he committed to 'continuity of existing services' and said there were no plans to raise fares, cut staff or restructure the company. For 11 years, the adult fare has been HK$2. The tram company made a profit of around HK$2 million a year between 1996 and 2006, but earnings surged to more than HK$10 million in 2007 and more than HK$30 million in 2008 thanks to a revamp of advertisement services. Andrew Cheng Kar-foo, deputy chairman of the Legislative Council's transport panel, hoped fares would not rise if services were added. 'We hope the trams will remain Hongkongers' trams,' he said. A spokesman for the Transport and Housing Bureau said the government had stressed to Wharf and Veolia the importance of preserving the tradition of the service, including the trams' design. 'Veolia has assured us that it is fully committed to preserving the trams in Hong Kong,' he said. The deal has been in the offing for more than two years. 'A number of buyers approached us during the past two years. We think Veolia is the best partner considering its knowledge and expertise in this area,' Mr Yick said.