Document:

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                                                                     EXHIBIT 4.2
                                                                TO ANNUAL REPORT
                                                                    ON FORM 20-F

                              LAND LEASE AGREEMENT

                                     between

                        Guangzhou Railway (Group) Company

                                  (the Lessor)

                                        &

                        Guangshen Railway Company Limited

                                  (the Lessee)

                             Date: November 15, 2004

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Clause   Heading
------   -------
<S>      <C>
1.       Land for Lease

2.       Lease Term

3.       Rent and Payment of Rent

4.       Facilities to the Land

5.       Delivery of the Leased Land

6.       Rights and Obligations of the Lessor

7.       Rights and Obligations of the Lessee

8.       Representations and Warranties of the Lessor

9.       Termination of the Agreement

10.      Breach of the Agreement

11.      Force Majeure

12.      Governing Law

13.      Dispute Resolution

14.      Registration and Expenses

15.      Effectiveness and Miscellaneous
</TABLE>

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THIS AGREEMENT is made on November 15, 2004 in Shenzhen

BETWEEN

   (1)   Guangzhou Railway (Group) Company (the "Lessor"); and

   (2)   Guangshen Railway Co., Ltd. (the "Lessee")

WHEREAS:

      1.    The Lessor is a state owned enterprise incorporated in the People's
            Republic of China ("PRC") with its registered address at No. 151
            Zhongshan Yilu, Guangzhou, PRC, and the business license number
            4400001007908.

      2.    According to the approval and authorization from the State Council
            and the Ministry of Land and Resources, the Lessor has acquired the
            right to use the land set forth in Schedule One ("Schedule One
            Land") to this Agreement in the manner of operating under the
            government authorization and transfer of the right to use
            state-owned land;

      3.    The Lessee is a company incorporated in PRC with its registered
            address at No. 1052 Hepinglu, Shenzhen, PRC, and the business
            license number 19241166-3.

      4.    The Lessor hereby agrees to lease and the Lessee agrees to accept
            the right to use the Schedule One Land.

NOW IT IS HEREBY AGREED as follows:

1     LAND FOR LEASE

      1.1 The land for lease is the land listed in Schedule One with altogether
   200 pieces of land and the overall area of 28,194,642.31 square meters.

      1.2 In case of any increase or decrease of the leased land during the
   lease term, the two parties shall enter into a supplementary agreement
   regarding the changes.

2     LEASE TERM

      2.1 The lease term shall be twenty (20) years, which will start upon the
   effective date of this Agreement.

      2.2 Unless otherwise for the reasons of force majeure events which are
   unanticipated, unavoidable or uncontrollable, when the lease term expires,
   the Lessee is entitled to renew the

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   lease term in accordance with the terms and conditions under this Agreement
   and the Lessor shall not refuse the Lessee's request of renewal.

3  RENT AND PAYMENT OF RENT

      3.1 In accordance with the negotiation between the two parties and with
   reference to the value of the right to use the land determined in the Report
   on the Evaluation of the Land Assets given by the Beijing Pan-China Assets
   Appraisal Co., Ltd, the rent shall be amortized within fifty (50) years. The
   rent shall not be more than RMB 74 million per year.

      3.2 The Lessor shall pay the rent in quarter within fifteen (15) days
   before the end of the prior quarter without prior notification.

      3.3 Except the rent under this Agreement and expenses resulting from
   breach of this Agreement by the Lessee, the Lessor undertakes that the Lessee
   shall not be liable for any other fees for any reasons (including any taxes
   which shall be paid by the Lessor), unless otherwise provided by law.

4  FACILITIES TO THE LAND

      4.1 Within the lease term, the Lessor shall be liable for the maintenance
   of all the facilities to the land.

5  DELIVERY OF THE LEASED LAND

      5.1 The Lessor shall finish all the formalities relating to getting the
   permission of leasing the Schedule One Land no later than the commencement
   date of the lease term provided herein, and deliver such land to the Lessee.

6  RIGHTS AND OBLIGATIONS OF THE LESSOR

      6.1 The Lessor is entitled to the following rights:

         6.1.1 Claiming rent under the term provided herein;

         6.1.2 Supervise the use of the land by the Lessee to ensure the Lessee
      makes rational use of the land pursuant to law and the provisions under
      this Agreement. The Lessee shall actively cooperate the Lessor in its
      supervision.

      6.2 The Lessor shall assume the following obligations:

         6.2.1 Dispose formalities with respect to acquiring permission of
      leasing the land in accordance with provisions under this Agreement;

         6.2.2 Assume all taxes, levies in relation to the right to use the land
      occurred during the lease term, unless otherwise provided by law;

         6.2.3 Fully perform its obligations under the land use agreement;

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         6.2.4 If necessary, the Lessor shall provide the Lessee with the
      relevant certificate documents for the use of the Schedule One Land by the
      Lessee, such as projects of construction and installation.

         6.2.5 The title of the buildings constructed by the Lessee on the
      Schedule One Land during the lease term shall belong to the Lessee, and
      the Lessor shall assist the Lessee in the disposal of the relevant
      certificates or license.

         6.2.6 During the lease term, the Lessor shall not transfer, lease or
      mortgage the Schedule One Land to a third party, or establish any third
      party interest on such land to limit or affect the Lessee's use of the
      land.

         6.2.7 Provide relevant materials to the Lessee and assist the Lessee to
      dispose the formalities of registering the title of the buildings on the
      Schedule One Land or change of such registration with the relevant
      authorities.

7  THE RIGHTS AND OBLIGATIONS OF THE LESSEE

      7.1 The Lessee is entitled to the following rights:

         7.1.1 to use the land in compliance with the terms and conditions of
      this Agreement;

         7.1.2 build various buildings pursuant to the provided purpose for the
      land use;

         7.1.3 the Lessee is entitled to lease, mortgage and transfer the
      buildings it constructs on the Schedule One Land and is also entitled to
      receive proceeds generated from such disposal.

      7.2 The Lessee shall assume the following obligations:

         7.2.1 The Lessor shall pay the rent on time in accordance with this
      Agreement. In case of overdue payment, the Lessee shall pay the Lessor a
      daily liquidated compensation equivalent to 0.03% of the rent payable.

         7.2.2 All construction and other activities the Lessee conducts on the
      Schedule One Land shall be in compliance with laws and regulations of the
      People's Republic of China;

         7.2.3 In the event of laying down various pipelines through the
      Schedule One Land for public interests, the government shall obtain
      consent from the Lessee, and the Lessee shall not refuse without any
      reasons, but the entity carrying out such construction shall make
      reasonable compensation to the Lessee. If such construction act damages
      seeded strips, passageway or pipelines, the entity cutting through the
      land shall be liable for the repair of such damage. The cutting through by
      various pipelines laid down for public interests shall not impede the
      construction and the finished buildings.

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         7.2.4 The Lessee shall ensure that the management personnel, policemen,
      firemen ambulancemen and the relevant equipments and vehicles of the
      government or the Lessor may enter the Schedule One Land and the buildings
      thereto without any trouble to conduct public affairs or emergency
      services;

         7.2.5 In the event that the construction or operation activities of the
      Lessee damages the surrounding environment and the underground facilities,
      which makes the state, enterprises or individuals suffer losses, the
      Lessee shall be liable for the compensation.

         7.2.6 The Lessee shall not develop, dug or occupy any other land
outside the Schedule One Land without authorization. In case of provisional use
of the land or road outside the Schedule One Land, the Lessee must obtain the
approval from the competent government authorities or the user of such land or
road, and make necessary payment.

8  REPRESENTATIONS AND WARRANTIES OF THE LESSOR

      8.1 The Lessor hereby provides representations, warranties and
   undertakings to the Lessee as follows:

         8.1.1 The Lessor has the right to use the state owned Schedule One Land
      and has met the conditions of leasing such land;

         8.1.2 By and upon the execution date of this Agreement, the Lessor has
      not put any mortgage or any other restrictions to limit the right to use
      the Schedule One Land.

      8.2 The Lessor shall fully indemnify the Lessor for any losses or expenses
   incurred to the Lessee arising from any untruth, misleading or violation of
   such statements, warranties and undertakings.

9  TERMINATION OF THE AGREEMENT

      9.1 The Agreement shall be terminated if any of the following events
   occur:

         9.1.1 The lease term expires and the Lessee does not renew the
      Agreement;

         9.1.2 The Lessee terminates this Agreement before the expiration of the
      lease term (including dissolution, insolvency of the Lessee);

         9.1.3 The two parties to this Agreement agree to terminate before the
      expiration of the lease term;

         9.1.4 Upon the expiration of the lease Agreement, the Agreement is not
      renewed not for the reason of the Lessor;

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      9.2 After the termination of this Agreement, the Lessee shall return the
   Schedule One Land to the Lessor after disposing all the buildings, affiliated
   articles, equipments and facilities on the land.

      9.3 If the Lessee is not liable for the termination of this Agreement
   before the expiration of the lease term and the Lessor takes back the
   Schedule One Land, the Lessor shall compensate a fee equivalent to the left
   value with deduction of the depreciation charges to all the buildings,
   affiliated articles, equipments and facilities.

10 BREACH OF THE AGREEMENT

      10.1 The Lessor shall be regarded as breach of this Agreement in case of

         10.1.1 not delivering the Schedule One Land to the Lessee upon the time
      provided in this Agreement;

         10.1.2 any other violation of any terms under this Agreement;

      10.2 The Lessee shall be regarded as breach of this Agreement in case of

         10.2.1 not paying the rent upon the time provided in this Agreement;

         10.2.2 any other violation of any terms under this Agreement.

      10.3 The breaching party shall pay liquidated damages to the other party
   in accordance with the provisions under this Agreement. In case of the
   liquidated damages cannot cover the losses suffered by the party who does not
   breach the Agreement, the breaching party shall indemnify the actual losses
   resulting from such breach of Agreement.

11 FORCE MAJEURE

      11.1 In case of inability of one party or both parities to perform this
   Agreement because of force majeure events during the enforcement of this
   Agreement, the party unable to perform its obligations shall not be liable
   for the breach of Agreement, but such party affected by the force majeure
   events shall immediately notify the other party and provide the relevant
   proving documents notarized by the local notary agency where the force
   majeure events occur.

12 GOVERNING LAW

      12.1 The establishment, effectiveness, interpretation, performance and
   dispute resolution of this Agreement shall all be in accordance with the laws
   of the People's Republic of China.

13 DISPUTE RESOLUTION

      13.1 During the performance of this Agreement, in case of any disputes
   arising, the parties shall first resolve the dispute by negotiation. Should
   the dispute not be resolved by

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   negotiation, either party might seek litigation to the People's Court where
   the Schedule One Land locates.

14 REGISTRATION AND EXPENSES

      14.1 The two parties shall dispose the registration formalities for land
   lease with the competent authority of land and resources within thirty (30)
   days as of the effective date of this Agreement.

      14.2 The registration fee shall be paid in accordance with the relevant
   regulations.

15 EFFECTIVENESS AND MISCELLANEOUS

      15.1 This Agreement shall become effective after satisfying the following
   conditions:

         (1) Legal or authorized representatives from both parties execute on
             this Agreement;

         (2) The Lessee has performed the voting procedure for affiliated
             transaction and obtained permission to this Agreement from the
             shareholders or exemption to the transactions involved in this
             Agreement from the Hong Kong Stock Exchanges;

         (3) The domestic initial issuing of A shares has been approved and all
             the funds raised have been remitted to the account of the Lessees;

         (4) The Agreement for the Sale and Purchase of the Railway Operation
             Assets between Guangshen Co., Ltd and Guangzhou Railway Yangcheng
             Railway Company has come into effect and the act of purchasing the
             assets and operation has begun.

      15.2 The "day" herein in this Agreement means business day, excluding
   Saturday, Sunday and public holidays.

      15.3 The schedule to this Agreement is an integral part to this Agreement
   and has the same legal effect as this Agreement.

      15.4 As for matters not included in this Agreement, the two parties shall
   enter into a supplementary agreement after negotiation. The supplementary
   agreement must be registered with the local competent land authority.

      15.5 This Agreement shall be executed on five counterparts, and each
   counterpart is original. Each party holds two counterparts and the other one
   shall be filed with the land administrative authority.

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LESSOR: Guangzhou Railway (Group) Company

LEGAL OR AUTHORIZED REPRESENTATIVE:

LESSEE: Guangshen Railway Co., Ltd.

LEGAL OR AUTHORIZED REPRESENTATIVE:

                                       9<PAGE>
                                                                     EXHIBIT 4.3

                                                                TO ANNUAL REPORT
                                                                    ON FORM 20-F

                        COMPREHENSIVE SERVICES AGREEMENT

                                 BY AND BETWEEN

                        GUANGZHOU RAILWAY (GROUP) COMPANY

                                       AND

                        GUANGSHEN RAILWAY COMPANY LIMITED

                          DATED AS OF NOVEMBER 15, 2004

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>          <C>                                                              <C>
Article 1    Scope of the Comprehensive Services...............................3
Article 2    Undertakings and Warranties.......................................4
Article 3    Transportation Services...........................................6
Article 4    Rail Line Maintenance Services...................................12
Article 5    Car Repair in Depot and Wheel Repair Services....................14
Article 6    Railway Materials Procurement Agency.............................17
Article 7    Settlement Services by the Railway Settlement Center.............18
Article 8    Hygienic and Anti-Epidemic and Convalescence Services............19
Article 9    Nursery and Kindergarten Services................................21
Article 10   Liabilities for Breach of Contract...............................22
Article 11   Miscellaneous Provisions.........................................22
</TABLE>

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      This Comprehensive Services Agreement (this "Agreement") is entered into
this 15th day of November 2004 in Shenzhen by and between:

      (1) GUANGZHOU RAILWAY (GROUP) COMPANY (hereinafter referred to as "Party
A"), a group company registered in Guangzhou of Guangdong Province with its
enterprise legal person business license number being 4400001007908 and its
legal address being at No. 151 First Zhongshan Road, Guangzhou; and

      (2) GUANGSHEN RAILWAY COMPANY LIMITED (hereinafter referred to as "Party
B"), a joint-stock limited company registered in Shenzhen of Guangdong Province
with its publicly-held shares being listed on Hong Kong Stock Exchange, its
enterprise legal person business registration number being 19241166-3 and its
legal address being at No. 1052 Heping Road, Shenzhen.

      For the purpose of the better provision of such services to Party B as
transportation, rail line maintenance and repairs, materials procurement,
medical care and epidemic prevention, accounts settlement, nurseries and
kindergartens and any other related services so as to ensure the normal
operation of Party B's transportation business, Party A and Party B hereby reach
the following agreement after consultations and by adhering to the principle of
equality:

                  ARTICLE 1 SCOPE OF THE COMPREHENSIVE SERVICES

      1.1 The services to be provided to Party B by Party A hereunder shall
include transportation, rail line maintenance and repairs, locomotives and cars
repair in depot, materials procurement on behalf of Party B, accounts
settlement, hygienic and anti-epidemic services, nursery and kindergarten
services and any other services that are consistent with the purposes of this
Agreement (hereinafter referred to as the

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"Comprehensive Services").

      1.2 For purposes of this Agreement, unless otherwise expressly provided
herein, references to "Party A" shall include Party A itself, and any company,
entity and department (other than Guangshen Railway Enterprise Development
Company, Guangzhou Railway Group Yangcheng Railway Company and any companies,
entities or departments controlled or managed by it) that are owned, controlled,
managed or used by Party A during the term of this Agreement, including any
institutions, equipment, facilities, premises, buildings and employees that are
owned, controlled, managed or used by such company, entity or department.

                      ARTICLE 2 UNDERTAKINGS AND WARRANTIES

      2.1 Party A agrees to provide the Comprehensive Services to Party B and
its employees pursuant to this Agreement and hereby undertakes and warrants to
Party B as follows:

            (a)   Party A shall have complete and unrestricted ownership,
                  control, management rights and use rights to any entity
                  subordinate to it and that its rights, control, management and
                  use, or the size, scope, quality or quantity of any of such
                  entity shall not be reduced during the term hereof.

            (b)   The quality, quantity and contents of any Comprehensive
                  Services to be provided hereunder shall not be inferior to the
                  standard of the same type of services, enjoyed by Party A
                  itself and its employees prior to the date hereof and after
                  the effectiveness hereof (if applicable), or provided to any
                  third party by Party A after the effectiveness hereof.

            (c)   Party A shall guarantee the quality of any Comprehensive
                  Services to be

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                  provided to Party B hereunder and provide the Comprehensive
                  Services to Party B at the most competitive quality and price
                  then available.

            (d)   All fees received from Party B as specified herein for the
                  Comprehensive Services provided hereunder shall not be used
                  for any purpose other than the benefit of the entities that
                  have actually provided the Comprehensive Services hereunder.

      2.2 Party B agrees to receive the Comprehensive Services from Party A
pursuant to this Agreement and hereby undertakes and warrants to Party A as
follows:

            (a)   Party B shall pay Party A the fees actually incurred by Party
                  A in the provision of the Comprehensive Services as specified
                  hereunder.

            (b)   Subject to any contrary provisions herein, any and all of the
                  fees payable by Party B shall be prepaid by Party B by the
                  month and settled by the quarter. Party B warrants that it
                  shall pay Party A the fees payable by it at the payment date
                  and in the amount specified herein and shall pay delay payment
                  interest for any payment overdue at a rate of 0.03% for each
                  day of delay.

      2.3 With respect to any fees that shall be settled by the month, the
annual aggregate thereof shall be the total of the monthly payment for 12 months
and the quarterly aggregate thereof shall be the total of the monthly payment
for three months.

            In case Party B provides any services to Party A and shall receive
any fees from Party A therefor, the above undertakings and warranties of one
party to the other in respect of payment shall be equally applicable to both
parties.

      2.4 References to "expenses", "complete costs" or "costs" shall mean costs
inclusive of taxes and be composed of the "expenses" or "costs" set forth in the
audited

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financial statements and the taxes and charges payable by the service provider
for the service fees received by it. Such taxes and charges shall include
business tax at a rate of 5%, urban construction tax at a rate of 7%, education
surcharge at a rate of 3% and anti-flood dam building charge at a rate of
1.3-0/00.

            The party receiving services may, subject to a 30-day's prior notice
to the party providing services, in conjunction with the party providing
services, retain an accounting firm to audit the said costs and expenses, and
the result of such audit shall be the conclusive evidence for the determination
of the said costs and expenses.

      2.5 In order to ensure the effective, timely and full implementation of
this Agreement, both parties shall cooperate with the other party and provide
conveniences to the other party. Where there is any change to the circumstances
under which the Comprehensive Services are provided, Party A shall promptly
notify Party B thereof. Party B shall also have the right to make reasonable
inquiries into Party A's specific entities or institutions who provide the
relevant services.

      2.6 Both parties agree that this Agreement shall be valid for three years
commencing from the effective date hereof.

                        ARTICLE 3 TRANSPORTATION SERVICES

      3.1 The transportation services to be provided by Party A to Party B
hereunder shall include production coordination, safety management, dispatch and
lease of passenger and freight trains.

            (a)   Party A warrants that it shall:

                  (i)   provide Party B with the correctly prepared working
                        diagrams for scheduled trains and locomotives;

                  (ii)  work closely with and coordinate the efforts of relevant
                        train

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                        operation departments and organize the balanced
                        operation of trains and ensure the supply of trains and
                        locomotives;

                  (iii) utilize trains and locomotives economically and
                        rationally, accelerate the turnover of trains and
                        locomotives, enhance the utilization efficiency of
                        trains and locomotives and ensure the safe
                        transportation; and

                  (iv)  promptly and correctly handle relevant issues arising
                        from the daily transportation operations so as to ensure
                        the normal use of trains and locomotives and provide
                        other dispatch services.

            (b)   Both parties undertake and warrant that they will duly perform
                  the formation plans, working diagrams, transportation
                  proposals and daily shift working plans for trains and
                  locomotives, accept the dispatch instructions and perform
                  their respective work in the joint operation and cooperation
                  between themselves according to the railway network.

            (c)   All of the passenger and freight trains leased to Party B by
                  Party A must be well-equipped and of a high quality, satisfy
                  the conditions for operation, comply with the Railway
                  Technical Procedures, the Technical Procedures for the Use of
                  Passenger Trains, the Detailed Rules for Air-conditioned
                  Passenger Trains and provisions in relevant rules and
                  regulations of the Ministry of Railway as well as Party B's
                  technical standards and requirements.

            (d)   The rental payable by Party B to Party A for the lease of
                  passenger and freight train from Party A shall be treated in
                  accordance with the settlement methods published by the
                  Ministry of Railway. The fees payable by Party B to Party A
                  for the operation coordination, safety

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                  management and dispatch services shall be calculated according
                  to the following formula:

                  fees payable by Party B to Party A for the operation
                  coordination, safety management and dispatch services for any
                  given year = settlement unit price for converted turnover
                  volume x converted turnover volume accomplished by Party B for
                  such given year, whereof, the "converted turnover volume"
                  refers to the volume of passengers and freight accomplished by
                  Party B calculated on the basis of the weight and the mileage
                  of the freight carried by Party B and the number and mileage
                  of passengers carried by Party B. The settlement unit price
                  for the converted turnover volume is RMB 40/10,000 converted
                  ton-kilometer.

                  Where any unusual circumstances occur that cause material
                  changes to the fees to be charged by Party A for its
                  transportation operation coordination, safety management,
                  dispatch services, the settlement unit price shall be adjusted
                  subject to mutual agreement between the parties.

      3.2 Party A's such wholly-owned subsidiaries as Huaihua Railway Company
and Changsha Railway Company, and such controlled subsidiaries as Sanmao Railway
Company, Guangmeishan Railway Co., Ld., Shichang Railway Co., Ltd. and Yuehai
Railway Co., Ltd., will provide Party B with the transportation services
including (but not limited to) the following and Party B will provide the same
services to such subsidiaries of Party A:

            (a)   passenger transportation services at railway stations
                  including directing passengers' entrance into railway
                  stations, departure waiting at railway stations, ticket
                  verification and train boarding, and water supply services to
                  incoming and outgoing trains;

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            (b)   use rights to rail lines;

            (c)   tractor services for both passenger and freight trains;

            (d)   passenger trains (including air-conditioned cars,
                  non-air-conditioned cars, buffet cars, power generation cars
                  and luggage cars), car inspection conductors, and power
                  generation and gas supply services for air-conditioned cars;

            (e)   train maintenance services;

            (f)   ticket sales agency;

            (g)   any other services related to passenger and freight train
                  transportation.

      3.3 Party A hereby undertakes that the above-mentioned transportation
services provided to Party B by its above-listed wholly-owned subsidiaries
including Huaihua Railway Company and Changsha Railway Company, and above-listed
controlled subsidiaries including Sanmao Railway Company, Guangmeishan Railway
Co., Ld., Shichang Railway Co., Ltd. and Yuehai Railway Co., Ltd., must comply
with the relevant technical standards and requirements set by the Ministry of
Railway; provided that where no such technical standards or requirements are
available, such services must reach the service standards regularly applied in
the railway industry.

      3.4 The rate of the fees payable for the services to be provided to Party
B by Party A's wholly-owned subsidiaries including Huaihua Railway Company and
Changsha Railway Company, and controlled subsidiaries including Sanmao Railway
Company, Guangmeishan Railway Co., Ld., Shichang Railway Co., Ltd. and Yuehai
Railway Co., Ltd. and for the services to be provided to such subsidiaries of
Party A by Party B shall be determined according to the following order of
priority:

            (a)   with respect to any item of services for which there is a
                  prevailing market

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                  price, the rate of the fees payable for such item of services
                  shall be determined by and among the relevant parties based on
                  such prevailing market price;

            (b)   with respect to any item of services for which there is no
                  prevailing market price but the Ministry of Railway has
                  formulated settlement methods or set a uniform guiding price,
                  the rate of the fees payable for such item of services shall
                  be determined pursuant to such settlement methods or guiding
                  price;

            (c)   with respect to any item of services that cannot be determined
                  pursuant to items (a) and (b) above, the rate of the fees for
                  such item of services shall be equal to: complete costs of
                  such item of services x (1+8% rate of profit).

      3.5 Party B agrees that Party A's controlled company, Guangdong Railway
Youth Travel Service Co., Ltd. ("GRYTS"), shall contract to provide train
conductor services to portion of the passenger trains operated by Party B. The
specific train runs contracted to GRYTS shall be determined by and between such
Party B and GRYTS on a case-by-case basis.

      3.6 The scope of the conductor services contracted to GRYTS shall include
but not limited to the sale of tickets for, and operation of buffet business and
sale of train commodities related to the relevant contracted passenger train
runs.

      3.7 Revenues made by GRYTS from its sale and make-up sale of tickets for
the relevant contracted passenger train runs shall be vested in Party B;
revenues made by GRYTS from its sale of commodities and operation of buffet
business on trains shall be vested in GRYTS. Expenses for the use and
maintenance and repair of the contracted trains and the train expenses
stipulated by the Ministry of Railway for such trains shall be

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paid by Party B. The train conductor services for the contracted trains shall be
performed by GRYTS and the salaries of the conductors and any and all of the
expenses incurred in the provision of the contracted conductor services for the
contracted trains shall be paid by GRYTS; provided that, liabilities for bodily
injury or death of any passenger on any of the contracted trains not
attributable to GRYTS, shall be assumed by Party B.

      3.8 Party A hereby warrants that it will cause GRYTS to achieve the
contracted ticket sales revenue target on the basis of safe transportation and
observance of railway code of ethics. The contracted ticket sales revenue target
shall be determined by Party B and GRYTS subject to mutual agreement on the
basis of the specific train runs contracted to GRYTS. In case the actual ticket
sales revenues made by GRYTS exceed the contracted ticket sales revenue target,
the payment to GRYTS for its provision of the contracted conductor services
hereunder shall be increased in proportion to the amount of the actual ticket
sales revenue in excess of the ticket sales revenue target. On the contrary, in
case the actual ticket sales revenues made by GRYTS fail to reach the contracted
ticket sales revenue target, the payment to GRYTS for its provision of the
contracted conductor services hereunder shall be reduced in proportion to the
difference between the actual ticket sales revenue and the ticket sales revenue
target. In case a force majeure event occurs during the term of the operation by
GRYTS of the contracted conductor services and the ticket sales revenue for the
contracted trains is materially and adversely affected thereby, the ticket sales
revenue target may be reviewed and re-determined by and between Party B and
GRYTS subject to mutual agreement between them after consultations.

      3.9 For the contracted conductor services and related train services
provided by GRYTS, GRYTS shall receive from Party B service fees and a share of
the revenue from the make-up sale of tickets. The fees for the provision of the
conductor services and related services contracted to GRYTS hereunder shall be
calculated on the basis of the

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conductor services/1000 train-kilometer (excluding the power generation cars),
and shall be RMB 800/1000 train-kilometer for each passenger train conductor for
the air-conditioned cars and RMB 400/1000 train-kilometer for each passenger
train conductor for the non-air-conditioned cars. GRYTS shall be entitled to
receive 30% of the revenue from the make-up sale of tickets as its share. The
above fees shall be settled by the quarter and Party B and GRYTS shall confirm
the settlement amount within 15 days as of the end of each quarter. Upon
confirmation of the settlement amount, Party B shall pay the same within 10 days
as of its receipt of the formal invoice from GRYTS.

                    ARTICLE 4 RAIL LINE MAINTENANCE SERVICES

      4.1 Party A shall, upon entrustment of Party B, provide such services to
Party B as main line repair and maintenance services (track lifting, track
lining, tamping and dynamic stabilization) with large-sized track maintenance
machinery, track replacement overhaul for jointless lines, track overhaul
cleaning and other services including overhaul of track bridge equipment.

      4.2 During the period when Party A is performing the said rail line repair
and maintenance services for Party B, Party B shall, at the expense of Party A,
provide Party A with detailed basic technical materials about the relevant track
bridge equipment, places for the storage of the camping vehicles and the
communications equipment used by Party A's relevant employees and shall supply
water and power to Party A's relevant employees required for their everyday
life. In addition to that, Party B shall coordinate the efforts of each of its
dispatch, track maintenance, telecommunication and signaling, station and public
security departments involved in Party A's implementation of relevant projects
as part of the entrusted services as so ensure the successful completion of
relevant projects, the time period required for the closing for project
implementation and the punctual operation of Party A's engineering trains and
commuter buses.

                                       12
<PAGE>

      4.3 The fees for the main line repair and maintenance services with
large-sized track maintenance machinery to be provided by Party A to Party B
shall be equal to the complete costs for any given service project x (1+8% rate
of profit).

            For purposes of 2005, the complete costs for track tamping shall be
temporarily deemed as RMB 7,100/kilometer, and for switch tamping, shall be
temporarily deemed as RMB 7,600/pair; and the complete costs for rail grinding
shall be temporarily deemed as RMB 12,000/kilometer. Party A hereby warrants to
Party B that the rate of service fees applied by Party A against Party B
hereunder shall not be higher than the rate of service fees applied by Party A
against any of Party A's affiliates or any independent third party. Otherwise,
Party B shall have the right to entrust a third party to perform the services to
be provided by Party A hereunder.

      4.4 Party A shall ensure any and all of Party B's lines to which it has
performed repair and maintenance services hereunder must be able to be operated
safely and soundly and free from error. Party A shall compensate Party B for its
direct economic loss arising from Party A's repair and maintenance services or
any accident occurring during Party A's implementation of the service projects
immediately after it is determined that Party A shall be responsible for such
accident.

      4.5 Party B shall be solely responsible for any loss arising from its
failure to comply with the standards required by the relevant quality standards.
Party B shall compensate Party A for any economic loss incurred by Party A due
to Party A's inability to implement a service project, whether in whole or in
part, caused by any reason on the part of Party B.

      4.6 The fees for such services to be provided by Party A to Party B
hereunder as track replacement overhaul for jointless lines, track overhaul
cleaning and other services including overhaul of track bridge equipment shall
be determined by Party A and Party B

                                       13
<PAGE>

through consultations by referring to the standard of fees for such services
published by the Ministry of Railway. Where there is no such a standard of fees
available, such fees shall be calculated according to the following formula:

            Total amount of fees payable = repair and maintenance costs x (1+8%
rate of profit)

      4.7 The track replacement overhaul for jointless lines, track overhaul
cleaning and other services including overhaul of track bridge equipment
specified in this Article may also be provided by an entity selected through
bidding based on the actual situation. In case Party A is the winning bidder,
the specific items of services and rate of service fees shall be determined by
Party A and Party B pursuant to the contents of the bidding documents and
conditions for bid winning and shall not be subject to any limit set forth in
Items from 4.1 to 4.6 above.

             ARTICLE 5 CAR REPAIR IN DEPOT AND WHEEL REPAIR SERVICES

      5.1 Party B shall entrust Party A with the performance of the car repair
in depot on Party B's trains in operation on the basis of the actual situation
and its own needs. Such repair services shall include but not be limited to:

            (a)   disassembly, inspection, repair and replacement of
                  bogies(including the brake system);

            (b)   inspection and repair of air conditioners, diesel engines and
                  power generators;

            (c)   inspection and repair of electrical systems (control
                  cabinets);

            (d)   inspection and repair of car interior furnishings;

            (e)   inspection and maintenance of car exterior furnishings; and

                                       14
<PAGE>

            (f)   inspection and repair of hook and buffer zones (ends).

            Subject to mutual agreement after consultations, Party A may accept
other train repair services not covered in the above scope of car repair in
depot.

      5.2 Materials, parts and instruments required for car repair in depot
shall be provide by Party A in the course of the repair services where the train
to be repaired is of a model fixed by the Ministry of Railway, or by Party B
with its own effort where the train is not of a model fixed by the Ministry of
Railway, or purchased or processed by Party A at the request and entrustment of
Party B.

      5.3 Party A shall provide all of the repair and maintenance services to
Party B pursuant to the Procedures for Train Repair in Depot, the Procedures for
Railway Technical Management, the Procedures for Car Inspection and Repair and
documents, rules, drawings, circulars and other materials concerning technical
standards for car repair in depot. Where any car to be repaired in depot is not
of a model fixed by the Ministry of Railway, Party B shall provide Party A with
complete technical materials concerning such car prior to the commencement of
the repair.

      5.4 Party A shall conduct a self-test of the cars repaired by it in depot
after having completed all of the required repair services, and will not deliver
the same to Party B for test and acceptance until after having verified that the
quality of each of the parts on the cars so repaired meet the relevant
standards. Party A's technical materials for and conclusions on quality re-test
of the cars repaired by Party A in depot shall be complete and accurate and be
promptly delivered to Party B for operational analysis and appraisal.

      5.5 The rate of fees payable to Party A for car repair in depot performed
by Party A shall be determined by Party A and Party B through consultations on
the basis of the actual conditions of the cars to be repaired, the specific
items of services performed during car repair in depot and the degree of
difficulty of the repair services and by referring to the

                                       15
<PAGE>

standard of fees for repair in depot of trains in operation. Where for any item
of repair in depot there is no such a standard of fees, the fees for such item
of repair in depot shall be calculated according to the following formula:

      Total amount of fees payable = repair and maintenance costs x (1+8% rate
of profit)

      5.6 After having completed the car repair in depot entrusted to it by
Party B, Party A will request Party B to settle the bills for the fees therefor
on the basis of the price mutually agreed between them. Party B shall pay such
fees within 10 days as of its receipt of, and verification of the correctness
of, the bills for such fees submitted by Party A.

      5.7 Party A shall ensure any and all of Party B's trains to which it has
performed car repair in depot hereunder must be able to be operated safely and
soundly and free from latent quality defect. In case Party A fails to perform
any car repair in depot in compliance with the standards required by the quality
standards for car repair in depot, Party A shall repay the fees paid to it for
such car repair in depot or re-perform the car repair in depot till the quality
of the cars repaired by it reach the relevant quality standards. Party B shall
compensate Party A for any economic loss incurred by Party A due to Party A's
inability to punctually complete the car repair in depot or any adverse impact
on the car repair depot, caused by any reason on the part of Party B.

      5.8 The car repair in depot specified in this Article may also be
performed by an entity selected through bidding based on the actual situation.
In case Party A is the winning bidder, the specific items of services and rate
of service fees shall be determined by Party A and Party B pursuant to the
contents of the bidding documents and conditions for bid winning and shall not
be subject to any limit set forth in Items from 5.1 to 5.7 above.

      5.9 The train wheel factory subordinate to Party B may provide wheel
repair

                                       16
<PAGE>

services to any of Party A's subsidiaries or controlled entity at the request
thereof and the fees for such services shall be equal to repair service costs x
(1+8% rate of profit).

                 ARTICLE 6 RAILWAY MATERIALS PROCUREMENT AGENCY

      6.1 In case Party B entrusts Party A with the procurement of portion of
the railway materials, the quantity and categories of such railway material
shall be set forth in a list provided to Party A by Party B and shall not become
valid until after being confirmed by both parties.

      6.2 The quality of any of the materials procured by Party A on behalf of
Party B must be good and reach the standards set by the State, the relevant
ministry or relevant enterprises.

      6.3 In the course of the arrangement for the procurement of materials for
Party B, Party A shall select sources for such materials at the preferential
price and conditions offered by Party A to other relevant railway entities and
the price of any materials supplied to Party B may not be higher than the price
of such materials offered to any of Party A's subsidiaries, controlled entities
or any independent third parties under the same conditions.

      6.4 The specific schedule and terms of the payment of the consideration
for the materials to be procured by Party A shall be determined by Party A and
Party B after consultations subject to the actual situation of the relevant
batch of materials.

      6.5 Subject to the provisions set forth in Clause 6.3, for any materials
procured by Party A for Party B, Party B shall pay service fees to Party A which
shall be equal to a certain percentage of the consideration for such materials.
Such percentage shall be determined as follows depending on the actual category
of the materials procured by Party A for Party B:

            (a)   1.5% of the consideration for the procured materials, for the
                  procurement

                                       17
<PAGE>

                  of diesel, steel rails, tires, axles, steel grinding wheels,
                  lubricating oil (fat) for use for special purposes;

            (b)   5% of the consideration for the procured materials, for the
                  procurement of any category of materials other than the
                  categories as listed in (a) above.

            Such service fees shall be settled by the quarter and paid to Party
                  A by Party B in the amount as confirmed by Party A and Party B
                  within 15 days as of the beginning of the forthcoming quarter.

         ARTICLE 7 SETTLEMENT SERVICES BY THE RAILWAY SETTLEMENT CENTER

      7.1 In order to increase Party B's capital gains and reduce settlement
fees and financing costs, Party B hereby agrees that the Guangzhou Railway
Settlement Center under the management of Party A shall provide the relevant
settlement services to Party B, which shall cover:

            (a)   accounts settlement between Party B and Party A and any other
                  enterprises subordinate to the Ministry of Railway;

            (b)   the provision of necessary assistance and convenience to Party
                  B in its depositing of fixed-term and current deposits
                  according to the negotiated preferential deposit interest
                  agreed between Guangzhou Railway Settlement Center and banks;
                  and

            (c)   the provision of financing conditions to Party B in accordance
                  with the rules of Guangzhou Railway Settlement Center for
                  allocation of internal funds.

      7.2 Party A hereby undertakes to Party B that Guangzhou Railway Settlement
Center under its management shall:

            (a)   ensure the safety and intactness of Party B's funds in its
                  accounts opened

                                       18
<PAGE>

                  with Guanghzhou Railway Settlement Center;

            (b)   accounts settlement between Party B and Party A and any other
                  enterprise subordinate to the Ministry of Railway shall be
                  conducted in accordance with the relevant rules of the
                  Ministry of Railway. With respect to any settlement service
                  that is not expressly stipulated by the Ministry of Railway,
                  Party B shall not be charged any settlement service fees
                  therefor. With respect to any settlement service that falls
                  into the category of paid services, the rate of fees charged
                  therefor shall not be higher than the rate of fees for the
                  same category of services applied by banks;

            (c)   the rate of interest on Party B's current and fixed-term
                  deposits placed in the cooperative bank under Guangzhou
                  Railway Settlement Center shall be no lower than the deposit
                  interest rate for the same period as published by the People's
                  Bank of China.

            (d)   In the case of any allocated funds obtained by Party B through
                  the internally allocated funds Guangzhou Railway Settlement
                  Center, the rate of fees for the occupancy of such allocated
                  funds payable by Party B may not be higher than the loan
                  interest rate for the same period as published by the People's
                  Bank of China.

         ARTICLE 8 HYGIENIC AND ANTI-EPIDEMIC AND CONVALESCENCE SERVICES

      8.1 Party A hereby agrees to provide Party B, its employees and their
family members with planned immunization, occupational disease prevention and
treatment, environmental monitoring, disease control, recuperation and
convalescence as well as other related services through its disease control
centers, hygienic supervision institutions, convalescence and recuperation
houses and other related entities. Party A must ensure

                                       19
<PAGE>

that it shall:

            (a)   make arrangements for Party B's employees and their family
                  members to enjoy timely convalescences and recuperation;

            (b)   put diseases under strict control and provide technical
                  hygienic services in a timely manner;

            (c)   monitor various hygienic practices, environmental protection,
                  and prevention and treatment of occupational diseases and
                  tuberculosis in accordance with law to make sure that all of
                  such work is performed strictly in compliance with relevant
                  laws and regulations; and

            (d)   give health education to Party B's employees.

      8.2 Party B agrees to pay Party A's disease control centers and hygiene
monitoring stations the fees incurred by Party A in Party A's provision of the
hygienic and anti-epidemic services to Party B.

            The fees incurred by Party A in its provision of the convalescence
and recuperation services to Party B shall be calculated according to the
following formula:

            Fees payable by Party B for any given year for the convalescence and
recuperation services = actual expenses incurred by Party A's convalescence and
recuperation houses / number of persons convalescing or recuperating therein x
number of Party B's personnel convalescing or recuperating therein (including
the number of Party B's personnel convalescing or recuperating in the
convalescence or recuperation houses of other railway administrations as an
exchange).

      8.3 Should Party B suffer from an unexpected accident or natural disaster
and need relevant departments under Party A to provide additional hygienic and
anti-epidemic services, Party A shall actively provide such services and Party B
shall pay Party A the fees

                                       20
<PAGE>

for such services at the amount actually incurred by Party A.

                   ARTICLE 9 NURSERY AND KINDERGARTEN SERVICES

      9.1 Party A agrees to provide Party B's employees with nursery and
kindergarten services through its own nurseries and kindergartens and ensure
that:

            (a)   children of Party B's employees can go to the nurseries and
                  kindergartens as close to them as possible;

            (b)   quality of education and facilities in Party A's nurseries and
                  kindergartens shall be no less than the same in the other
                  local nurseries and kindergartens of the same level; and

            (c)   children of Party B's employees can enjoy the equal treatment
                  in Party A's nurseries and kindergartens as other children
                  therein.

      9.2 Fees for nursery and kindergarten services provided to Party B by
party A shall be calculated according to the following formula:

            fees payable by Party B for nursery and kindergarten services =
total expenses (costs) incurred by Party A's nurseries and kindergartens /
number of all of the children therein x number of children of Party B's
employees therein.

      9.3 Any and all other miscellaneous expenses charged by nurseries and
kindergartens against certain children therein for personal purposes in
accordance with relevant local regulations shall be paid by Party B's individual
employees whose children enter nurseries or kindergartens. Party A shall not
charge Party B's employees any kind of so-called "education development fees" or
any other fees of the same nature or for the same purpose.

                                       21
<PAGE>

                  ARTICLE 10 LIABILITIES FOR BREACH OF CONTRACT

      10.1 Both parties shall perform their respective obligations hereunder
voluntarily and in good faith. Should this Agreement be rendered unable to be
performed either in whole or in part due to any breach of either party, the
breaching party shall assume the liabilities for such breach. Should both
parties breach this Agreement, each of the parties shall assume its respective
liabilities in proportion to its own fault; provided that, the assumption of the
liabilities for breach of contract shall not prejudice the right of the
non-breaching party to request the breaching party to continue to perform its
obligations.

      10.2 In the event that any of Party A's wholly-owned or controlled
subsidiaries or controlled entities who performs any of Party A's obligations
hereunder pursuant to this Agreement or any supplementary agreement hereto
commits a breach, such subsidiary or entity shall assume its respective
liabilities for such breach and Party A shall assume joint liabilities therefor.

      10.3 For any fees payable by Party B to Party A or any of its wholly-owned
or controlled subsidiaries or controlled entities hereunder, invoices or
receipts shall be issued to Party B in accordance with PRC tax laws or other
relevant laws or regulations. Party A or any of its wholly-owned or controlled
subsidiaries or controlled entities shall fully indemnify Party B against any
loss arising from any penalty imposed upon or any claim brought against Party B
due to the violation by any of Party A or its wholly-owned or controlled
subsidiaries or controlled entities of any relevant stipulations.

                       ARTICLE 11 MISCELLANEOUS PROVISIONS

      11.1 This Agreement shall come into effect upon:

            (a)   execution and affixture with the company seals by the legal or
                  authorized representatives of both parties;

                                       22
<PAGE>

            (b)   Party B's carrying out of the resolution procedures for
                  affiliated transactions, receipt of the approval to this
                  Agreement from its independent shareholders or the exemption
                  from Hong Kong Stock Exchange to the affiliated transactions
                  involved herein in accordance with Party B's Articles of
                  Association and the Listing Rules of the Hong Kong Stock
                  Exchange;

            (c)   Party B's receipt of the approval to its proposed initial
                  public offering of A shares inside the PRC and the entrance of
                  all of the funds raised through such offering into Party B's
                  account; and

            (d)   The effectiveness of the Railway Operating Assets Purchase
                  Agreement By and Between Guangzhou Railway (Group) Company and
                  Guangzhou Railway Group Yangcheng Railway Company and the
                  consummation of the acquisition of assets and business
                  contemplated thereunder.

      11.2 This Agreement, upon becoming effective, shall supercede any and all
of the agreements or arrangements in respect of the Comprehensive Services
hereunder prior to the effective date hereof by and between Party A or any of
Party A's wholly-owned or controlled subsidiaries or other controlled entities
or companies (other than Guangzhou Railway Group Yangcheng Railway Company and
Guangzhou Railway (Group) Guangshen Railway Enterprise Development Company) and
Party B.

      11.3 Provisions of this Agreement may be amended by the parties hereto
after consultations if required by the changes to the actual circumstances,
provided that such amendment shall be made in writing. Neither Party A nor Party
B may add any provision to, delete any provision from or otherwise amendment
this Agreement, unless by mutual agreement between them in writing.

      11.4 Headings used herein are inserted only for purpose of convenience and
shall

                                       23
<PAGE>

not impair the meaning of this Agreement or any provision herein.

      11.5 Any documents referred to herein shall be incorporated into this
Agreement by such reference.

      11.6 In the event that either Party A or Party B intends to assign an of
its rights or obligations hereunder to any of its wholly-owned or controlled
subsidiaries or other controlled entities or companies, it shall notify the
other party thereof, and the party who makes such assignment shall assume joint
liabilities for the performance of this Agreement by the assignee. Except in
such case, neither Party A nor Party B may assign any of its interests hereunder
to any third party at its own discretion without prior written consent from the
other party.

      11.7 In case either party breaches any of its obligations hereunder and
causes any economic loss to the other party, the other party shall have the
right to request the breaching party to make a remedy within a specified time
limit, perform relevant obligations pursuant hereto or make compensation for
various losses, and may rescind any relevant portion of this Agreement or this
Agreement in whole when necessary, except when such breach is caused by a force
majeure event.

      11.8 The execution, effect, interpretation, performance of, and resolution
of any dispute arising from, this Agreement shall be governed and protected by
the laws of the People's Republic of China. Any dispute arising from the
performance of this Agreement shall be resolved between the parties through
consultations. Should any dispute fail to be resolved through such
consultations, such dispute shall be submitted to any competent court for
resolution.

      11.9 This Agreement shall be a framework agreement between Party A and
Party B in respect of the matters regarding the Comprehensive Services. Party B
and Party A or any of its wholly-owned or controlled subsidiaries or other
controlled entities or companies

                                       24
<PAGE>

may execute supplementary agreements for any specific items of services on the
basis of the principles set forth herein; provided that, such supplementary
agreements may not materially conflict with this Agreement in respect of the
major provisions and Party B shall perform its obligations for the disclosure of
such supplementary agreements or obtain the required exemption in accordance
with the provisions of the regulatory authorities in the jurisdictions in which
Party B's securities are listed. Such supplementary agreements shall constitute
an integral part of this Agreement and shall have the equal legal effect as this
Agreement.

      11.10 For purposes of this Agreement, "day" shall refer to a business day
other than weekends and public holidays in the PRC.

      11.11 This Agreement shall be executed in four copies with each of Party A
and Party B to hold two.

                                       25
<PAGE>

PARTY A:   GUANGZHOU RAILWAY (GROUP) COMPANY (company seal)

Legal or authorized representative: ____________________

PARTY B:   GUANGZHOU RAILWAY (GROUP) COMPANY (company seal)

Legal or authorized representative: ____________________

                                       26

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