Extending the number of years drivers are slugged with tolls on Sydney motorways has been part of early thinking within NSW Treasury to help pay for overall reductions in charges under a planned shake-up of the system.
Days after a final report from a review into Sydney’s toll roads was published, it has emerged that Treasury officials drafted a confidential presentation for a credit ratings agency in late July in which they said they were “exploring different funding sources” including “concession extensions”.
Tolls are due to remain on WestConnex until 2060.Credit: Dion Georgopoulos
Under existing agreements known as concessions, tolls will remain on Sydney’s biggest motorway, WestConnex, until 2060, while those on the M2, M7, Lane Cove Tunnel, Eastern Distributor and NorthConnex will last until 2048. The Cross City Tunnel’s tolls will stay until 2035.
One of the options for network tolling recommended by the review led by former competition regulator Allan Fels is a price restructure and a general reduction in tolls, which is estimated at $650 million a year.
It would leave toll road operators such as Transurban facing revenue falls, which the Treasury document says could be paid for from “funding sources” such as extending the right of operators to charge for longer.
“Funding sources are potential revenue streams and cost savings that can be used to offset any potential revenue shortfalls that concessionaires may experience and fund the reduction in tolls,” the document says.
It does not detail which motorways could be considered for potential extensions to the number of years that tolls could remain if, in fact, that option is pursued.
The comments were drafted in presentation slides for a Treasury briefing on July 31 to credit rating agency Moody’s. The briefing was to be treated as “commercial in confidence” because it included “sensitive information”.
NSW Coalition roads spokeswoman Natalie Ward said it would be a “seismic broken promise” if Labor forced motorists to “pay more tolls, higher tolls and pay tolls for longer”.
“Labor promised no new taxes, no new tolls and the same infrastructure pipeline as the Coalition. They need to come clean on what their proposal for toll reform is,” she said.
A NSW government spokesman said the independent review had said extending toll concessions did not amount to genuine reform.
“We are working towards a negotiated outcome, and it would be premature to comment on any specifics around the process,” he said.
He said that motorists in Sydney would pay $195 billion in tolls out to 2060 as a result of the privatised toll road system and the “toll mania” that Ward and the Coalition had left behind.
The government has been negotiating for months with Transurban and other contract holders on the structure of changes to the tolling regime. Both sides have said they want to reach a deal by the end of the year.
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