By Matt O'Sullivan and Max Maddison
The NSW government has strongly signalled that two-way tolling of the Harbour Bridge and Tunnel will be a central pillar in a shake-up of Sydney’s toll roads as it enters negotiations with motorway giant Transurban over changes it hopes to resolve by Christmas.
However, the government flagged that it will push ahead with legislation simultaneously as a backstop measure in case complex negotiations with Transurban and other contract holders over a new tolling regime for Sydney fail.
Professor Allan Fels outlines his final report from his toll review on Tuesday.Credit: Nikki Short
The government’s intentions come as a final report into Sydney’s tolls, released on Tuesday by former competition watchdog chairman Allan Fels, has recommended that new laws need to be rolled out immediately to establish a state-owned entity to set prices.
Transurban and other large investors have put on the table plans for “corridor pricing” whereby tolls are based on motorways in sectors of the city. This differs considerably from uniform-network tolling favoured by Fels.
His final report warns that Transurban’s proposal is not in the public interest and will put the interests of the toll road operators first.
Under Fels’ plans, distanced-based tolls that are gradually reduced the further motorists drive would be rolled out across Sydney’s 13 toll roads.
He is also pushing for two-way tolls on the Harbour Bridge and Tunnel, along with the Eastern Distributor, though conceded that some motorists who crossed the harbour would be worse off as a result of the changes if implemented.
Roads Minister John Graham said the final report made a “strong case” for two-way charging, and it was fair to ask everyone to help resolve the inequity in the city’s patchwork of toll roads.
“If we’re going to have one set of tolls across Sydney, the principles that underlie it should be the same regardless of where you live. And that isn’t the case under the way the old tolling system works,” he said.
A consequence of increasing pricing on the Eastern Distributor and Harbour Tunnel would put extra pressure on adjacent roads in the eastern suburbs and lower north shore already “nearing capacity”, the final Fels report said.
Tolls are being considered for southbound trips on the Eastern Distributor.Credit: Nick Moir
Fels indicated that the shake-up he envisioned would require investments from the government running into the tens of millions of dollars each year to upgrade existing tolling infrastructure and would probably lead to delays to motorists as work was undertaken.
After a testing relationship, Fels said he was encouraged by the fact that Transurban and other large investors in toll roads had belatedly indicated a serious willingness to engage in negotiations with the government to try to reach an outcome by Christmas.
However, one of Fels’ key recommendations is to introduce laws immediately to establish a NSW motorways agency to enable the government to set prices and revenue adjustments.
Fels said the legislation was needed to give the government a “final powers of decision” on toll prices so that if an agreement with Transurban and other companies was not reached by Christmas, it could use the legislative power to force change.
“We are not fully convinced that an agreement will be possible, and for that reason and others, there needs to be back-up legislation to enable the government to determine process and revenue adjustments,” he said.
“It has a powerful effect on bargaining. We need an override legislation.”
Fels said Transurban, which controls 11 of Sydney’s 13 toll roads, had “not been the quickest off the mark in dealing with us” over his proposals but in the end was willing to look to do a deal with the government by Christmas.
Transurban said in a statement that it was committed to working with the government and the other investors in Sydney’s motorways on potential reform by exploring solutions that drew on several aspects of the Fels review.
It added that the government and the review both recognised the importance of honouring contracts and each had noted “multiple options for achieving reform”.
In a clear sign of its intentions before Fels’ final report was released, the Minns government set aside almost $17 million in last month’s state budget to “support tolling reform initiatives”.
It will go towards kick-starting work on a state-owned tolling entity to set charges and legislation to drive the shake-up.
Acting Liberal leader Damien Tudehope said the report simply outlined more tolls and bureaucracy for motorists. But he said he was supportive of improving the consistency of tolling across Sydney’s road network, providing greater transparency into how the pricing system works.
“But the solution being offered is no solution except a new toll,” he said.
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