By Tom Rabe and Matt O'Sullivan
A NSW Labor government will keep the $5 billion Western Harbour Tunnel in public hands as part of a long-term strategy to increase the number of state-owned toll roads and reduce Transurban’s stranglehold on Sydney’s motorway network.
Seizing on Sydney’s sprawling patchwork of motorways as a key example of the Coalition’s privatisation agenda, Labor leader Chris Minns has promised to build a third harbour crossing without selling its tolling concession.
Transurban operates all of Sydney’s toll roads apart from the Sydney Harbour Bridge and Tunnel.Credit: Louie Douvis
“We’ll build the tunnel, but we won’t sell it,” Minns told the Herald. “Any revenue from tolls goes straight back into public hands to build for the future.”
Keeping the future harbour tunnel in public hands will mark the beginning of a long-term, concerted effort by a Labor government to increase the number of state-owned toll roads in a bid to counter private company Transurban’s perceived monopoly on the network.
“Holding a public sector stake in Sydney toll roads gives the public an extra lever in the effort for toll reform,” Minns said.
While Labor would not be drawn on other projects, a Minns government could expand its state-owned toll road portfolio when the first stage of the M6 motorway in Sydney’s south opens in 2025. Meanwhile, the private tolling concession for the Cross City Tunnel expires in 2035.
NSW Opposition Leader Chris Minns.Credit: Nick Moir
Transurban and associated consortiums own tolling concessions for WestConnex, NorthConnex, the Cross City Tunnel, the M2, Lane Cove Tunnel, the M5 and the M7, while the company has also been circling the future harbour crossing as a potential investment opportunity.
Some motorways are tolled at a distance-based rate, while others are charged a flat rate. Surging inflation has triggered higher increases in charges for a number of toll roads, including those for WestConnex which jumped 6 per cent in January.
Late last year, the government did an about-turn on the construction method for the Western Harbour Tunnel between Rozelle and North Sydney. It ditched plans to lay so-called immersed tubes for the three-lane tunnels on the harbour floor in favour of using two giant boring machines to dig deeper under the water.
The government has set aside $4.1 billion in the state budget for the new harbour tunnel over the next four years. The tunnel project is due to open in 2027, after the government signed contracts for its construction worth about $5 billion.
Opposition roads spokesman John Graham said keeping the Western Harbour Tunnel in public hands would help to improve competition in the city’s motorway network following its tolling review, which will be conducted by former Australian Competition and Consumer Commission chairman Professor Allan Fels.
“This would be a pro-competition strategy under the watchful eyes of Professor Fels,” Graham said.
Both the Perrottet government and Labor opposition have pledged hundreds of millions in toll rebates for Sydney drivers struggling to afford to travel across Sydney amid a cost-of-living crisis.
Both sides have also committed to a wholesale review of the tolling system, though former roads minister Andrew Constance warned in 2021 that any changes to the system would “trigger very, very significant claims against the taxpayer”.
Last year NSW Metropolitan Roads Minister Natalie Ward categorically ruled out privatising the Sydney Harbour Bridge and the existing harbour tunnel at a budget estimates hearing.
When Ward was asked about the future Western Harbour Tunnel, she said: “There are no plans to do so at this time – I think that’s ruling it out,” before saying: “We are not privatising the Western Harbour Tunnel.”
Asked whether she could confirm the government would also rule out privatising the revenue streams from the harbour crossings, Ward said: “I refer to my previous answer ... I’ve said it before, and I’ll say it again, there are no plans”.
While the Coalition have sold the concessions for WestConnex, NorthConnex and the M2, former Labor governments sold the concessions for the Eastern Distributor, the Cross City Tunnel, the Lane Cove Tunnel and the M7.
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