NSW Roads Minister John Graham has sharpened his resolve to shake up Sydney’s patchwork of toll roads, insisting the state government is already considering how new laws can be used to make the system fairer for motorists.
His remarks come as former competition watchdog chairman Allan Fels is set to release a final report into overhauling the city’s tolling network next week.
In a clear sign of its intentions, the Minns government set aside almost $17 million in last month’s state budget to “support tolling reform initiatives” before Fels had handed down his final report.
Professor Allan Fels has laid out plans for a major shake-up of Sydney’s patchwork of toll roads.Credit: Kate Geraghty
Some of the money will go towards kick-starting work on a state-owned tolling entity to set charges and legislation to drive the shake-up.
Graham said it was prudent that the government was working on ways to drive the “complex reform”, including looking at how legislation could be used to achieve it.
“Toll reform is critical for Sydney. For a measure of how serious, consider the total bill motorists will pay over the next 3½ decades: $195 billion,” he said.
“Without reform, the city will become more congested, more divided, and much more expensive to get around, which will increasingly impact on where people live and work.”
Graham said that, under the existing long-term contracts for Sydney’s toll roads, the problem was growing every year and over decades was unsustainable.
A key recommendation in Fels’ interim report released in March was for the government to create a state-owned authority to set tolls across Sydney’s motorway network and ensure greater market competition. It would be a major shift away from the existing system whereby concession agreements for individual motorways determine the charges motorists pay.
Former investment banker and infrastructure adviser Martin Locke said Fels had put the ball in the court of motorway operator Transurban after the government backed the idea of a state-owned tolling entity to set motorway charges.
“The question now is whether Transurban will be intransigent and demand full compensation or will be prepared to be flexible,” said Locke, an adjunct professor at the Institute of Transport and Logistics Studies at Sydney University.
“The government wants to come up with a long-term structure that is financially sustainable but with fair and equitable tolls.”
A Transurban spokeswoman said the company would continue to work with the government on reforms that achieved the best outcomes for customers, while protecting the $36 billion that both it and partners had invested in Sydney’s road network. “We are assured that all contracts remain binding,” she said.
Transurban, which controls 11 of Sydney’s 13 toll roads, has warned that the proposal for network-wide charges and a state-owned tolling entity would add a level of bureaucracy without benefiting motorists.
The company, which earns half its annual toll revenue of $3.3 billion from Sydney motorways including WestConnex, will release its full-year results on August 8.
Peak body Infrastructure Partnerships Australia has said that unilaterally legislating to alter existing contracts was “reckless” and should be ruled out.
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