NSW should take back control of motorway, independent report finds

An independent review recommends the NSW government take back control of the city’s motorway network and lower charges for motorists.

Toll signs advising Sydney motorists. Picture: Monique Harmer

A major shake-up of Sydney’s toll roads is on the cards following an independent review that has recommended the NSW government take back control of the city’s motorway network and lower charges for motorists.

The review, led by former Australian Competition and Consumer Commission chairman Allan Fels, proposes that uniform tolls be applied across Sydney’s 13 ­motorways and two under construction, with lower charges recommended for the majority of trips, and most of the relief earmarked for western Sydney.

In their final report handed down on Tuesday, Mr Fels and co-author David Cousins also call for the creation of a state-owned entity, “NSW Motorways”, to enable the state government to set prices and promote more competition between, and regulation of, toll road operators including dominant player Transurban.

Two pricing scenarios are put forward as potential approaches to lowering prices across the network.

One takes a “network-wide approach” supplemented by the introduction of two-way tolling, while the other goes further to also include further reductions subsidised by “funding sources and efficiency gains in the tolling system”.

Two-way tolling on Sydney Harbour crossings and the Eastern Distributor are proposed, with the extra revenue used to lower charges across the rest of the network.

While a trip from Penrith or Parramatta to the CBD currently costs $12.74, that would drop to $11.94 under the report’s first scenario, and would fall to $7.88 under the second.

The report suggests the final outcome would lie somewhere in between the two “bookend” scenarios. Meanwhile it also calls for “inadequately targeted and under-utilised” toll relief schemes to be phased out, and for a revenue adjustment mechanism to be implemented in order to prevent windfall gains or losses by toll road operators.

Mr Fels and Mr Cousins said that, while they were encouraged by the willingness of operators to negotiate with the government over the proposed reforms, they were not confident that a voluntary agreement could be reached in a “timely manner and in the public interest”.

They recommended that legislation be drafted immediately as a “backup to negotiations”, providing the government with the powers to push ahead if an agreement is not reached by Christmas.

In a statement, Transurban said it remained committed to working with the government on toll reform, while at the same time “protecting the value of the significant investment made in Sydney over the past two decades”.

“The NSW government and the review have both recognised the importance of honouring contracts that are in place, and each note that there are multiple options for achieving reform,” the company said. “Transurban and its partners have invested $36bn in the state’s motorways over decades and provided significant benefits to Sydney motorists, including faster travel times and safer, more sustainable trips.”

The company’s shares closed up 4c at $12.94 on Tuesday.

NSW Roads Minister John Graham said the government would consider legislating to reform toll pricing, but would first seek to negotiate with Transurban and other toll road operators.

“Toll reform is critical for Sydney and this is a once-in-a-generation chance to address this issue,” Mr Graham said.

“We are determined to put motorists first as we push ahead with these challenging reforms.

“I welcome the offer by motorway concessionaires to work with the government on a new network approach to tolling.

“We will also consider legislation consistent with the recommendations in the final report to achieve this important reform.”