Who benefits from Sydney’s patchwork of toll roads? Consultants

Taxpayers in NSW have paid tens of millions of dollars in fees to consultants during the past two terms of government thanks to Sydney’s complex toll road regime, with Labor and the Coalition exchanging barbs on the money spent unravelling complex contracts underpinning the network.

Some of the spending has been questioned by those tasked with overhauling the tolling network, with government documents revealing former Australian Competition and Consumer Commission (ACCC) chair Alan Fels argued external financial advisers were not necessary in his review.

Governments on both sides of the political aisle have spent millions on political consultants to deal with the city’s patchwork tolling network.Credit: Nick Moir

The cost of consultants used by the government during its protracted attempt to fix the patchwork of toll roads has been a focus of consistent criticism from the state opposition, which has pilloried Labor over the as-yet unresolved overhaul of the network.

The opposition has spent weeks criticising the Minns government over the $130,000 a week paid out to law firm Ashurst for advice during negotiations with Transurban and other toll road operators, as well as hiring former Baker Mackenzie chair Christopher Saxon on a $990,000 contract for “strategy and advice” on the negotiations.

Those costs have accumulated after the more than $5 million spent during the Fels review. Released last year, the review has seen the government locked in negotiations with Transurban and other operators over an agreement to shake up the patchwork network.

But those fees do not tell the whole story. Tender documents show that in February the government also gave the Royal Bank of Canada a $4.1 million contract for “financial and commercial” advice in its negotiations with operators who hold the 10 privately owned toll road concessions of Sydney’s 13 toll roads.

“The only benefit of the 704-day toll review so far has been former bureaucrats’ bank accounts and loyalty points at five-star hotels and Qantas,” shadow roads minister Natalie Ward said.

But despite the opposition’s criticisms, taxpayers have paid tens of millions of dollars in fees to consultants, no matter which party is in power.

Roads and Transport Minister John Graham accused the Coalition of hypocrisy, pointing out more was spent on consultants during the controversial sale of the WestConnex motorway.

NSW Treasury’s 2021-22 annual report, for example, shows the Coalition paid Royal Bank of Canada and Citibank $5.9 million each for financial advice during the negotiations on the $11 billion sale of WestConnex. In total, the report shows the former government paid $14.6 million in consultant fees over the sale.

“The NSW Liberals spent more on lawyers and bankers selling off one toll road than we’re spending renegotiating all of them. It’s enough to give you road rage,” Graham said.

Former competition chief Allan Fels questioned the need for outside financial consultants during his tolling review.Credit: Alex Ellinghausen

Ward, however, pointed out the sale of WestConnex had helped fund projects such as the Metro West line, and the multi-billion dollar WestInvest grants program.

“Labor is raiding that very funding to plug holes in their budget and pay for hospital upgrades they can no longer afford,” she said.

But whether the millions spent on external consultants is necessary is a separate question.

Graham defended the $4.1 million contract to RBC, saying the negotiations with Transurban and other toll road operators required “the best negotiators representing the people of NSW”.

“We can’t take a water pistol into a gun fight,” he said.

But documents obtained via a parliamentary order reveal Fels was not always convinced of the need for outside advice, while also hinting at a wider power struggle between the former ACCC chair and NSW public servants.

The $4.1 million contract for RBC was the second awarded during the long-running tolling overhaul. In 2024, the bank received a separate $748,000 contract for financial advice during the Fels review.

In emails between Fels and treasury and transport officials, sent before RBC had been appointed, he questioned why the government needed advice from “financial people (with limited knowledge)″⁣.

“These people lack the knowledge to do this well,” he wrote.

The documents reveal tension between public servants and Fels’ team, and come as the opposition has claimed Fels has been sidelined in negotiations with tolling operators. The government strongly denies this.

During the review, Fels was pushing to have financial advisers report directly to his review team — not Treasury.

In a separate email in March 2024 from David Cousins, the former chair of the Prices Surveillance Authority who led the review alongside Fels, he raised concerns with Graham’s chief of staff Paul Murphy about the “integrity of the independence” of the review.

Concerned about the review’s independence being “undermined” by Treasury, Cousins sought the minister’s assurance that the reviewers would “determine the content and direction of their final report to the government”.

The government says those concerns were dealt with, and that both Fels and Cousins supported the use of those financial advisers.

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