Large-scale infrastructure projects, such as the proposed Hong Kong-Macau-Zhuhai bridge and the Shenzhen Western Corridor, will solve congestion at existing land border crossings. But although the border-crossing capacity is expanding, Guangdong and Hong Kong are yet to relax restrictions capping the number of cross-border licences issued, said Shui Sin-por, director of the institute.

'To take advantage of the expanded capacity at the crossings, the quota system for private cars should also be reviewed and a free flow of traffic encouraged in the long term,' he said.

Licences are issued by the Transport Department and Guangdong Public Security Bureau, which regularly review the adequacy of the quota. Applicants must secure a permit from the Guangdong authority before they can obtain a permit from Hong Kong. However, Guangdong requires applicants to have a certain level of investment on the mainland, while in Hong Kong applications are open to everyone.

So far, about 9,700 licences have been issued. Of these, about 100 have been allocated to commercial limousine operators, with the rest going to individual private car-owners.

Last year, about two million private car trips were made through the three land border crossings - Lok Ma Chau, Man Kam To and Sha Tau Kok.

This figure is a 22 per cent increase from 2001, when 1.68 million trips were made.

Lee Yiu-pui, vice-president of the Hong Kong Automobile Association, supports the lifting of the quota.

He said the quota system was unfair because it favoured the privileged and licence approval virtually rested in the hands of Guangdong.

But Cheung Kim-ping, deputy general manager of a cross-border limousine company, had reservations about abolishing the quota system. He said his service already faced fierce competition from illegal operations involving private cars.

'These private cars are not supposed to take other passengers for a fee,' he said.