Hong Kong Tramways is celebrating its 120th anniversary, saying it aims to continue to contribute to the public transport system, attract more tourists and remain meaningful to locals.

The trams transport around 150,000 passengers daily, representing over 10 percent of the Hong Kong Island population and making it one of the busiest tram networks in the world.

Managing Director of Hong Kong Tramways Paul Tirvaudey on Tuesday said the company seeks to balance modernisation of the system with preserving its identity.

"Our point is not to insert a modern tram... it is to insert modern components into the tram to keep the appearance while making a more modern system," he said.

The company said passenger numbers are gradually recovering post-Covid, but they are still down 10-15 percent.

At a celebration ceremony, Tirvaudey emphasised the firm's commitment to sustainability, saying it is building trams that are 30 percent more energy efficient, reusing old parts for new trams to create a circular economy, and conducting carbon footprint assessments to identify areas for improvement.

"We are green. We are among the best in the class, but we work to be even better in the future," he said.