Sydney toll road review to examine who benefits from price caps

The NSW government’s new tolling tsar has been asked to ensure relief programs that cap how much motorists pay on the city’s roads do not inflate the bottom line of the private companies that own them.

Alan Fels, the former chairman of the Australian Competition and Consumer Commission, has been tasked by the new government with reviewing Sydney’s controversial road toll network, promising to reveal the full extent of multibillion-dollar tolling deals underpinning the regime.

The WestConnex M4 and M8 extension in St Peters, one of Sydney’s network of privatised roads.Credit: Kate Gerahty

The terms of reference for the review, released on Thursday, reveal that Fels has also been asked to consider “how to ensure the community rather than toll road owners benefit” from existing tolling relief measures.

Both the Coalition and Labor had election policies capping how much commuters pay for using the toll roads. Weekly toll bills in NSW will be capped at $60 a week from 2024.

But experts have often pointed out that those tolling relief packages can benefit the private operators of the roads by encouraging motorists to use them.

Roads Minister John Graham said the terms of reference had been drafted to ensure toll relief was “aimed squarely at motorists and the community, not the owners of toll roads in NSW”.

“I expect the review and subsequent overhaul of the toll network to make toll roads simpler and fairer for motorists who use them most,” he said.

“Addressing congestion and cost-of-living pressures, particularly for regular commuters without viable public transport alternatives, is another focus.

“Tolling in NSW is inconsistent, with different pricing rates, methods of calculating charges and vehicle classifications depending on the road, making it confusing for motorists.”

While the government’s relief package will come in from 2024, Fels was commissioned to lead a review into longer-term options to reform the tolling system.

During its 12 years in office, the former Coalition government sold tolling concessions for several major motorways to consortiums led by international road operator Transurban.

It currently owns or has a stake in motorways including the Cross City Tunnel, Eastern Distributor, Lane Cove Tunnel, M2, M5 east and M5 South-West, WestConnex, NorthConnex and the M7.

While the sales have earned billions for the state’s coffers, Labor, during the election, tied steadily increasing toll fees to cost-of-living pressures.

In an indication of the review’s scope to consider the influence of the private operators, the terms of reference state it will consider “the scope for competition and regulation to influence road tolls and the efficiency of service performance by providers”.

Premier Chris Minns has promised to table key details of contracts for both the WestConnex and NorthConnex motorways, as well as NSW Treasury projections showing how much money would be generated over the decades-long contract agreements.

The government has also said it would release the details of any compensation agreements between the former government and Transurban after former transport minister Andrew Constance warned in 2021 that changes to the concession deeds, which set the rates of toll increases, would “trigger very, very significant claims against the taxpayer”.

Elements of those private deals have never been released as the former government argued they were commercial in confidence.

In a statement, Transurban said it was “committed to working with government on NSW toll reform”.

“An opportunity exists to create a simplified, easy to use system for customers that also improves safety in the broader road transport network,” a spokesperson said.

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