FRANCE'S Veolia Transportation, Europe's largest transportation firm, has teamed up with Nanjing Zhongbei Group Co Ltd for its foray into the Chinese market.

The companies plan to establish the Nanjing Zhongbei Veolia Transport Co Ltd with a registered capital of 190 million yuan (US$27.34 million), Zhongbei said in a statement filed to the Shenzhen Stock Exchange yesterday.

Zhongbei will sell 93.1 million yuan worth of shares to Veolia, enabling the French company to take a 49-percent stake in the venture. The deal is still pending final approval from government departments and the companies' boards.

"The establishment of the venture will help to introduce advanced management expertise and will benefit the company for future development," Zhongbei said.

The introduction of a strategic partner for Zhongbei comes at a time when public transportation has been high on the agenda of many local governments, aiming to ease traffic congestion during the nation's urbanization and fast expanding economy.

It also helped Veolia Transportation, a unit of Veolia Environnement SA, to access the Chinese market after becoming the largest public transportation operator in Europe and United States. Zhongbei said the business scope of the new venture is intended to cover public transportation, vehicle maintenance and sales of spare parts.

Veolia currently manages public transportation in more than 5,000 cities in 29 countries worldwide. It has set up a representative office in Shanghai and started negotiation for projects in Shanghai, Chongqing, Shenyang and Xi'an.