By Matt O'Sullivan
Two-way tolling on the Sydney Harbour Bridge and Tunnel, and the Eastern Distributor, as well as charging motorists less the longer they drive on toll roads, are among key recommendations from a review identifying serious flaws in the city’s motorway system.
Under former competition watchdog chairman Allan Fels’ proposed shake-up, 74 per cent of motorists would have lower or unchanged tolls if subsidies were used, leaving 26 per cent facing higher charges.
Fels said introducing two-way tolling on the bridge, tunnel and Eastern Distributor was “being fairer” and the added revenue would be redistributed to help lower charges elsewhere. At present, only southbound motorists on the bridge and tunnel pay tolls, while northbound journeys on the Eastern Distributor are charged.
Fels said on Monday the state’s toll prices seem “very high” and competitive bidding by the private sector had not been based on price.
His review, commissioned by the NSW government, recommended tolls be charged at a decreasing cost per kilometre the longer motorists drive across the networks.
“We need a simpler, fairer, more transparent and better-functioning tolling system,” he said, citing inconsistencies and inequities resulting in a poorly functioning road network.
“Tolls need a big shake-up – major reforms, no holds barred. The NSW government needs to take back control of tolls.”
Premier Chris Minns did not commit to any recommendations but immediately ruled out changes to the M5 cashback scheme or its toll cap, which was an election commitment.
A key recommendation is that the government establish a body known as State TollCo to set future tolls and inject greater competition into the market while “taking into account the contractual rights of toll operators”.
These adjustments would result in some charges dropping and others rising “with different effects on different shareholders in Transurban”.
Professor Allan Fels has laid out plans for a major shake-up of Sydney’s patchwork of toll roads.Credit: Kate Geraghty
TollCo would operate independently, and in the longer term the state’s pricing regulator would review the level of tolls.
Fels said legislation was needed to make tolls more consistent. Too many parties such as investors, debt issuers and banks were involved to allow that to happen voluntarily.
“The government will have to set up a mechanism to bring about the compensation that would lead no toll road [operator] worse off or better off,” he said.
“We’re not proposing to rip up contracts, but you do need legislation to amend things sufficiently.”
Transurban chief executive Michelle Jablko said the company was pleased some ideas it had provided to the government were included in the report, and that the review recommends existing contracts be honoured.
“We will take some time to work through the details, and we think there is opportunity to continue to enhance value for customers,” she said.
However, Infrastructure Partnerships Australia said unilaterally legislating to alter existing contracts was reckless and should be ruled out.
“Today’s report has a spectrum of suggestions ranging from sensible, to muddled through to foolhardy,” chief executive Adrian Dwyer said.
“Some of the suggestions in today’s report risk creating a trust deficit at a time of peaking infrastructure demand and increasing fiscal constraint.”
The Fels review proposes a unified pricing structure across all of Sydney’s toll roads, and an initial reset to introduce fairer, simpler and more efficient charges.
Modelling shows the average tolls paid by cars and motorcycles under Fels’ network tolling plans would be $7.33 a journey in 2026, compared with $8.50 if no changes occur. If a subsidy was introduced to lower tolls for all motorists, the average price would be $6.19. The tolls will include an infrastructure charge ranging from 50c to $6.
Fels has also recommended reduced charges for motorcycles and caravans to reduce congestion on non-tolled roads.
Sydney is one of the world’s most-tolled cities. Among the serious flaws identified in the interim report are the monopoly by Transurban on the toll road system and inadequately targeted and under-utilised toll relief schemes.
Committee for Sydney transport policy manager Harri Bancroft said two-way charging on the Harbour Bridge was a smart move to reduce car traffic in the Sydney CBD.
“At the moment, it’s cheaper for people to drive back and forth to the city during peak periods than catching the train or bus,” she said.
Fels’ report highlights that agreements often favoured the private sector, such as ensuring that if motorway traffic was less than had been expected, the operator would be topped up by governments.
The report calculates that Sydney motorists will pay $195 billion in tolls by 2060, largely due to previous governments prioritising the financial concerns of tolling giants over managing traffic on the city’s congested roads.
Roads Minister John Graham said last week that the government would not proceed with a shake-up unless drivers were “absolutely” better off under a reform of the tolling system.
A final report, which will outline an implementation plan, will be completed in about six months.