Bank pitch sought for Sydney toll road review

A review into Sydney’s motorway network is to be conducted by Professor Allan Fels and Dr David Cousins.

The NSW government is believed to have asked banks to pitch for a role advising on its review into tolling across Sydney’s motorway network.

It is understood that Treasury has gone out to a number of banks asking them to submit proposals for a mandate to assist with the Allan Fels-led review.

Among those that could be well placed are Citi, JPMorgan, Lazard, RBC and UBS.

In 2020, the NSW government hired Citi for scoping study work, as it considered a plan to bundle up the toll-road revenues from the Sydney Harbour Bridge, Sydney Harbour Tunnel and the yet-to-be-built Western Harbour Tunnel to fund $13bn-plus Western Harbour Tunnel and Northern Beaches Link construction projects.

Also, when the government sold its remaining interest in WestConnex in 2020, it hired Citi and RBC.

Macquarie Capital and Morgan Stanley are unlikely to be in the mix given their close relationship with Transurban.

Another option is that one of the top four accounting firms such as KPMG, EY, PwC or Deloitte takes on the work.

The state has recently launched an independent review which it says explores options to make toll roads simpler and fairer across Sydney’s motorway network with respect to pricing.

The independent review is being led by Professor Fels, a former chairman of the Australian Competition and Consumer Commission, and Dr David Cousins a former chair of the Prices Surveillance Authority and director of Consumer Affairs Victoria.

A discussion paper was released in June to inform the public hearings that took place in July with an interim report released. Final recommendations are expected by July this year.

Toll road price rises are linked to inflation and the review comes at a time that consumers are being hard hit by the rising cost of living and interest rates have been rising to curb inflation.

Currently, Australian-listed toll road operator Transurban owns stakes in most of the country’s toll roads, including Sydney’s Cross City Tunnel, M2, M5, M7 and M8.

The review also comes after the ACCC blocked Transurban from buying into the EastLink toll road in Melbourne last year, arguing that acquiring a share would substantially lessen competition for future toll road concessions in Victoria.

In Melbourne, Transurban operates the CityLink toll road, and is constructing and will operate the West Gate Tunnel toll road.

The ACCC said the proposed acquisition would result in Transurban entrenching its position in Victoria, and prevent the entry of a rival operator which could compete closely for future toll road concessions in Victoria.

In addition to its toll road assets, Transurban provides electronic tolling and tag issuing services under the Linkt brand.