Transurban backs reforms to motorway toll charges

Transurban says it backs an investigation into return on investments after a report claimed Sydney motorists were likely to pay for the cost of motorways three times over.

Transurban says it backs an investigation into the financial return on toll road investments after a report claimed Sydney motorists were likely to pay for the cost of motorways three times over.

Transurban chief executive Michelle Jablko said the company had “long been advocates for toll reform” and had been engaging with the NSW government on how the system could be improved.

“This report is another step in the process of delivering better value and outcomes for customers,” Ms Jablko said.

Sydney motorists would pay $195bn in tolls over the next 37 years, paying for the cost of the motorways three times because of overly generous financial returns guaranteed to owners and operators, an independent review has found.

Transurban, Australia’s largest toll road company, operates a series of road networks across the country including CityLink and West Gate Tunnel in Melbourne, the Gateway Bridge and Clem7 tunnel in Brisbane and WestConnex in Sydney.

Part of the NorthConnex toll road in Sydney.

The review, co-authored by former Prices Surveillance Authority chair David Cousins, was established by the NSW government under Premier Chris Minns last year to examine the basis for setting motorway tolls in Sydney.

“We’re pleased to see that some of the ideas we’ve provided to the NSW government have been included in the report and that the review recommends that existing contracts are honoured,” Ms Jablko said.

“We will take some time to work through the details, and we think there is opportunity to continue to enhance value for customers.

“The one million trips taken every day by Sydney drivers demonstrates the value people see in the $36bn investment in the city’s roads by Transurban and our partners.”

Mr Minns said Sydney was the world’s most tolled city and the report laid bare the reality of privatisation which was at the expense of the people of Sydney.

The report said the problems stemmed from the way tolls had been set under individual concession agreements at different times over the past three decades. Since tolls were set administratively, rather than by competitive market forces, there was a likelihood that they were not always set appropriately, the review found.

Transurban said the interim report acknowledged that toll road operators had valid interests to be protected, and recognised the importance of honouring contracts that were in place. The final report is expected in late 2024.

“Transurban has invested over $36bn to enhance the Sydney road network, including more than $20bn over the past five years,” the company said.

“With the Sydney population expected to grow by approximately 25 per cent by the early 2040s, significant opportunity remains to identify and deliver road transport solutions.”

Melbourne-based Transurban last month posted a first-half profit of $230m, which was a 310 per cent increase on the previous period, off a 4.5 per cent increase in revenue to $2.12bn. 

The modelling in the report included revenue from privatised roads including WestConnex, NorthConnex, Eastern Distributor, M2 and M7, as well as the NSW government-owned Sydney Harbour Bridge and Tunnel, and the future M6 Stage 1.