Industry Issues, TWU

Effects of Toll Road Privatisation

Effects of Toll Road Privitisation

The effects of toll road privatisation in New South Wales have come to the forefront after the release of the Independent Toll Review interim report by Professor Allan Fels on March 11.

According to the review, significant reform is needed after damage across a number of years and various legislation which has failed to ease the burden on motorists.

The review first began in the first half of 2023 when Professor Fels and Dr David Cousins were asked to independently assess the efficiency, fairness, simplicity and transparency of tolls.

The NSW government says that the price of tolls in NSW are simply too high, which discourages the efficient use of toll roads. Toll prices have been locked in for decades with a system that was designed with financial returns back to toll road operators in mind rather than managing traffic in the most efficient way.

Reforming Sydney’s vast road toll network will be a complex task, the government adds, spanning 13 different toll roads and 10 individual contracts, with two more toll roads under construction.

The range of the review’s recommendations include a unified, network-wide price structure that is charged on a declining distance-based method to assist people who must travel further – specifically the millions of motorists in western Sydney who currently carry the largest burden and have the fewest public transport alternatives.

It also recommends creating a state-owned special purpose entity to set toll prices and improve competition, legislative changes to allow toll prices to be set independently of individual contracts, and engaging the Independent Pricing and Regulatory Tribunal (IPART) in oversight of toll price setting.

The review’s results, however, has spurred the Transport Workers Union (TWU) to label Sydney’s toll road system as an “out-of-control” crisis, with motorists to pay an estimated $195 billion in tolls between now and 2060.

TWU NSW/Qld state secretary Richard Olsen says the tolling system has spiralled out of control, placing an unbearable burden on road transport, becoming “highway robbery for transport workers”.

“It’s high time for major reforms that prioritise the livelihoods of owner-drivers over corporate profits. The New South Wales Government must step up and take decisive action to rein in the exorbitant toll costs,” Richard says.

“The current trajectory is unsustainable and unjust and the tolling companies’ exploitation of drivers must end. We demand immediate action to overhaul the system and better the well-being of transport workers.”

Despite Prof Fels last year stating that the review would not recommend ways to override long-term contracts to toll companies like Transurban, the TWU says the finances of private companies are being prioritised at the cost of drivers.

The TWU says the ongoing increases in the costs of toll roads creates an enormous financial burden for all transport workers. It adds that while just about every operating cost for owner-drivers has steadily increased over the years, none has increased more than toll roads.

The union points to Prof Fels statements, who made it clear “tolls need a big shake up. Major reforms, no holds barred and the New South Wales Government needs to take back control of tolls.”

Professor Fels’ report comes only a month after Transurban’s reported a net profit of $230 million in the six months leading up to December 31.

The review follows the announcement late last year from the NSW Government to give much-needed toll relief to heavy vehicle operators using Sydney’s M5 East and M8 motorways from January 1 this year.

 

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