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He said during the consultation period there had been general public support for the user-pays approach and for the introduction of Electronic Road Pricing (ERP) as the means of implementing this.

"We will seek Finance Committee approval early in the new session for funds to proceed with an ERP feasibility study which will begin in 1996.

"Transport Department is now finalising the brief for the study. We expect to engage the consultants early next year following which trials to be conducted with a view to the implementation of a full ERP scheme," the spokesman said. The Council also agreed that there should be no increases in First Registration Tax (FRT) and Annual Licence Fees (ALF) for private cars for the time being in view of the recent substantial decline in new car registrations.

"However, since we firmly believe that raising the levels of FRT and ALF is a most effective means of limiting growth in private car numbers, as has been proven in the past, we need to enact legislation and make other preparations now to enable such increases to be implemented if the growth rate of private car numbers again significantly exceeds our planning target of two or three per cent per annum," he said.

The Council also agreed that enabling legislation should be drafted to facilitate the imposition of tunnel passage tax.

The Council decided the actual amount of any increase in tolls at the cross harbour tunnels, the period of the day during which these would apply and other logistical arrangements should be decided nearer the time.

The spokesman explained that this was a practical approach because following the downturn in private car growth in recent months, traffic conditions in the tunnel approaches had stabilised. He added that the situation would be closely monitored. The Council also agreed that a Transport Fund should be set up in due course to receive revenue from any transport related tax increases to be approved in future.

This could, for example, be used to upgrade facilities at transport interchanges and to improve other transport facilities.

On tax benefits for company cars, the Council agreed to the removal of tax benefits under the Inland Revenue Ordinance, for the purchase and operation of company cars.