The former ACCC chairman has demonstrated his willingness to stamp his mark on Sydney’s tolling regime,which unfairly hits the hip pockets of motorists in the city’s west.
It should be no surprise then that the man whom the Minns government hired to launch a wide-ranging review into the toll system has laid out bold plans for a major regulatory upheaval.
Professor Allan Fels has laid out plans for a major shake-up of Sydney’s patchwork of toll roads.Kate Geraghty
Chief among them in is the proposed creation of a state-owned tolling authority – known as State TollCo – to take back control of motorway charges and to set toll prices.
Fels made clear on Monday that legislation would be needed to set up the state’s de facto tolling regulator,partly to avoid the government getting bogged down in legal disputes with Transurban and other large investors who have multibillion-dollar interests in toll roads.
It runs the risk of setting the government up for a fight with Sydney’s king of tolling. Transurban is the 800-pound gorilla that Fels did not shy away from calling out for its monopoly status. It controls 11 of Sydney’s 13 toll roads including WestConnex.
Pre-empting Fels’ interim report,Transurban has been on the charm offensive recently,spruiking. Under new chief executive Michelle Jablko,Transurban signalled late last year that it will give more incentives to motorists using its toll roads.
The company was nuanced in its public response on Monday to the Fels review but peak body Infrastructure Partnerships Australia did not hold back. It said unilaterally legislating to alter existing contracts was “reckless” and should be ruled out.
However,infrastructure financing expert Martin Locke said Fels had taken the “bit between his teeth” and embraced the role of a regulator in the form of a state tolling company.
“That is a fundamental shift. He has put the ball firmly into Transurban’s court and invited them to come to the party,” said Locke,a former Deutsche Bank managing director.
Motorists are charged only for southbound trips on the Sydney Harbour Bridge at present.Flavio Brancaleone
For its part,the government has left the door open to using legislation to set up a tolling authority to drive major changes and getting the state’s pricing regulator IPART to review tolls in the longer term.
While Fels will release a final report in six months,much will rest on the willingness of Premier Chris Minns and close confidants Roads Minister John Graham and Treasurer Daniel Mookhey to expend political capital on shaking up the city’s disjointed tolling regime.
Apart from avoiding war with Transurban,they have to convince voters whose budgets have been squeezed that there will be many more winners than losers.
Introducing two-way tolls on the Harbour Bridge and Tunnel and the Eastern Distributor might make sense from an equity point of view,but it exposes some voters to more motorway charges.
Fels could easily have laid out a plan that was more a reflection of the status quo. Instead,he has proposed a fundamental reform. The question now is whether the Minns government has the political appetite to adopt the major parts of it before the next state election in 2027.
