Sydney toll road review finds operator’s financial concerns pivotal in price-setting

The findings of a highly anticipated review into Sydney’s controversial road tolling system have confirmed the widely held suspicion that financial concerns, rather than economic management, has underpinned price-setting by motorway giants.

Led by former competition tsar, Alan Fels, the review comes after the current NSW Labor government campaigned heavily on the financial burden drivers faced during the 2023 state election, and capped weekly toll bills at $60 a week this year.

“The approach to setting tolls has been influenced more by the perceived need to cover the concessionaire’s financing costs than by the need to manage traffic on the roads,” the review’s final report reads.

“It has also not had a strong regard to principles of efficiency and fairness in setting individual tolls.”

Camera IconThe financial concerns of operators, rather than the economic management of roads, underpinned price setting, the review found. NCA Newswire/ Monique Harmer Credit: News Corp Australia

The report also finds that disparate arrangements governed price-setting for many of the state’s sprawling privatised road network.

“It is only in recent years that an attempt has been made to develop for future roads a more uniform approach to setting tolls based on a common set of principles,” the report states.

“However, there remains in place a wide diversity in the way tolls are set under the different concessions.”

To be released in full on Monday, the report will also set out reform recommendations for Sydney’s tolled road systems and will disclose previously top-secret contract details that underpin the privatised road network.

Premier Chris Minns said the privatisation of Sydney’s roads had come at the expense of its residents.

Camera IconNSW Premier Chris Minns said Sydneysiders had paid the price for road privatisation. NCA NewsWire / Gaye Gerard Credit: News Corp Australia

“The toll burden is hitting families who can least afford it most, particularly parts of western Sydney that have fewer public transport alternatives to getting in the car and paying tolls,” Mr Minns said.

“We were elected with a mandate to undertake work on toll reform, to make tolls simpler and fairer.”

So far the government has ruled out introducing a congestion tax on drivers entering the CBD, similar to what is in place in London, and adding further to the toll road network.

Options that remain on the table include a move for distance-based tolling or time-of-day pricing that would make tolled roads more affordable outside of peak travel hours.

Government modelling released in November suggests estimates NSW drivers will pay at least $123bn in tolls by 2060 when existing tolling contracts are set to expire.

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