Connected Transaction

Zhejiang Expressway Co
22 November 2005

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)



        Connected Transaction: Loan to Zhejiang Jinji Property Co., Ltd.

This announcement is made pursuant to Rule 14A.66(2) of the Listing Rules in
respect of the Loan Agreement entered into between the Company, Jinji Property
and the Bank on 17 November 2005 whereby the Company agreed to provide a loan of
a principal amount of RMB260 million (approximately HK$250 million) with a
maturity period of six months to Jinji Property through the Bank.

Jinji Property is a connected person of the Company as it is a 90% subsidiary of
Communications Investment, which in turn is a substantial shareholder of the
Company holding approximately 56% of the issued share capital of the Company.
The provision of the Loan under the Loan Agreement by the Company to Jinji
Property thus constitutes a connected transaction for the Company under Rule
14A.13(2)(a)(i) of the Listing Rules.

As the value of the Loan to be provided under the Loan Agreement represents less
than 2.5% of each of the percentage ratios, and the Loan Agreement is on normal
commercial terms, the provision of the Loan is exempt from the approval of the
independent shareholders of the Company but subject to the requirements under
Rule 14A.66(2) of the Listing Rules to disclose such transaction in this
announcement and in the next published annual report and accounts of the
Company.



Background



On 17 November 2005, the Company entered into the Loan Agreement with Jinji
Property and the Bank. Pursuant to the Loan Agreement, the Company will advance
the Loan to the Bank, which will in turn advance the Loan to Jinji Property.
Interest will be payable by Jinji Property to the Company at a rate of 6.55% per
annum, being approximately 1.33% per annum over the current rate applicable to
one year term loans in the PRC, as quoted by the People's Bank of China. All
handling fees payable to the Bank in connection with the Loan will be paid by
Jinji Property.



Interest on the Loan is payable quarterly in arrears. The Loan was advanced in a
single payment on 17 November 2005, and is repayable in a single payment on 16
May 2006.



Pursuant to PRC laws, only authorised banks are permitted to advance loans.
Inter-company loan is typically made through back-to-back arrangement with an
authorised bank. The arrangement with the Bank was made to comply with such
legal requirements. The Bank was providing the loan services as part of its
ordinary course of business.



In connection with the Loan Agreement, Communications Investment has provided a
guarantee in favour of the Company and the Bank in respect of the obligations of
Jinji Property for repayment of the principal and for payment of interest and
related expenses under the Loan Agreement.



Reasons of the transaction



The Loan is being provided to Jinji Property for use as general working capital.
The Loan was provided by the Company out of excess cash from its operations. The
Directors, including the independent non-executive Directors, believe that the
terms of the Loan Agreement are fair and reasonable, are on normal commercial
terms, and in the best interests of the Group and the Company's shareholders as
a whole as the Loan provides a higher return than would otherwise be earned as
deposit interest on the cash at hand.



Connected transaction



Jinji Property is a connected person of the Company as it is a 90% subsidiary of
Communications Investment, which in turn is a substantial shareholder of the
Company, holding approximately 56% of the issued share capital of the Company.
The provision of the Loan under the Loan Agreement by the Company to Jinji
Property thus constitutes a connected transaction for the Company under Rule
14A.13(2)(a)(i) of the Listing Rules.



As the value of the Loan to be provided under the Loan Agreement represents less
than 2.5% of each of the percentage ratios, and the Loan Agreement is on normal
commercial terms, the provision of the Loan is exempt from the approval of the
independent shareholders of the Company but subject to the requirements under
Rule 14A.66(2) of the Listing Rules to disclose such transaction in this
announcement and in the next published annual report and accounts of the
Company.



Information of the Group and Jinji Property



The Company was incorporated on 1 March 1997 in the PRC and is a joint stock
limited company with a registered share capital of RMB4,343,114,500
(approximately HK$4,176,071,635) at present. The main business of the Company
and its subsidiaries is investment in, development, operation, management, and
collection of tolls, of the Shanghai-Hangzhou-Ningbo Expressway and the Shangsan
Expressway, both in the Zhejiang Province of the PRC, and businesses ancillary
to the operation of the expressways, such as billboard advertising and operation
of service areas on the expressways. Jinji Property is principally engaged in
the business of real estate investment.



Definitions



In this announcement, the following expressions have the meanings set out below
unless the context requires otherwise.


'Company'                               Zhejiang Expressway Co., Ltd. (Chinese character)
'Communications Investment'             Zhejiang Communications Investment Group Co., Ltd. (Chinese character), a
                                        PRC state-owned enterprise
'Bank'                                  a PRC incorporated bank
'Directors'                             the directors of the Company
'Loan'                                  a loan of a principal amount of RMB260 million (approximately HK$250
                                        million), made pursuant to the Loan Agreement
'Loan Agreement'                        a loan agreement dated 17 November 2005 entered into between the Company,
                                        Jinji Property and the Bank whereby the Company agreed to provide the Loan
                                        to Jinji Property
'HK$'                                   Hong Kong dollars, the lawful currency of the Hong Kong Special
                                        Administrative Region
'Jinji Property'                        Zhejiang Jinji Property Co., Ltd. (Chinese character), a PRC-incorporated
                                        company
'Listing Rules'                         the Rules Governing the Listing of Securities on the Stock Exchange of Hong
                                        Kong Limited
'percentage ratios'                     has the meaning as ascribed to it under the Listing Rules, as applicable to
                                        the transaction under the Loan Agreement
'PRC'                                   the People's Republic of China
'RMB'                                   renminbi, the lawful currency of the PRC

The exchange rate used for reference purpose in this announcement is HK$1 to
RMB1.04.


                                                                                              By Order of the Board
                                                                                                  Geng Xiaoping
                                                                                                     Chairman



Hangzhou, 18 November 2005



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.








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