Hong Kong  - A half share in Hong Kong's historic tram network has been sold to a French multi-national company in a surprise deal, operators announced Tuesday.

The tram system's operators Wharf Holdings said it had sold a 50 per cent stake in the 105-year-old network crisscrossing Hong Kong island to the French company Veolia.

The two companies will jointly operate the service although there was speculation Tuesday that the move will lead to a complete takeover of the Hong Kong tram system by the French company.

At a joint press conference Tuesday afternoon, both Wharf and Veolia declined to reveal the cost of the deal but said it ran to "double-digit million euros."

Veolia said it had no immediate plans to raise fares and said it would study the route and the network before deciding on what changes if any would be made to the existing network.

However, the company confirmed it had already applied to build a new line on a harbour-front reclamation area where new government offices and other buildings are under construction.

Hong Kong's iconic trams, which have run from the east to the west of the island since 1904, carry around 230,000 passengers a day for a flat fare of just 2 Hong Kong dollars (25 US cents) per journey.

Along with the Star Ferry that crosses Victoria Harbour, they are a huge attraction for tourists and the Hong Kong Tourism Board is this year launching a guide to dining along tram routes, which have stops every 250 metres.(dpa)

A Transport Bureau spokesman said Veolia had assured the Hong Kong government it would "preserve the tradition" of the tram service and consult passengers before any changes to the system were made.