A report written by former ACCC chairman Allan Fels and transport expert David Cousins warns that Sydney motorists are being bled dry by Transurban and has urged the NSW government to wrestle control of the state’s toll roads.
Transurban controls 11 of NSW’s 13 toll roads, each of which were negotiated on a different contract and with different price rises.
According to the report, NSW motorists will pay more than $123 billion in tolls over the next 37 years, with Transurban’s WestConnex road accounting for more than half of the total.
The modelling in the report forecasts that Sydney motorists will pay $61 billion in WestConnex tolls by 2060, which would be more than triple the roadway’s project cost of $21 billion.
“Tolls need a big shake-up, no holds barred, and the NSW government needs to take back control of tolls”, professor Fels said.
“Transurban has a monopoly and there’s been insufficient focus on competition in toll setting”.
“The public interest factor needs to be injected”, he said.
While the authors’ concerns are valid, the NSW government has little realistic chance of taking control of the toll road network without paying Transurban massive financial compensation worth tens-of-billions of dollars.
Commercial contracts are already in place with Transurban that permit toll increases of CPI inflation or higher (see here for breakdown).
The NSW government stupidly accepted these terms to get capital expenditures and debt off its books.
In the process, the government effectively endorsed a private monopoly to control Sydney’s road network.
Transurban has been specifically designed to profit handsomely from Australia’s dumb immigration-driven economy.
Here is how the scam works:
- Cram people into the major capital cities so traffic becomes chronically congested and more roadways are needed.
- Build toll roads via public-private partnerships, charging high user fees to the existing population.
- Resident living standards degrade since all the government has done is charge people to move about when they were doing it for free before the people-stuffing.
- Because GDP increases and governments take credit for reducing congestion (a result of the people-stuffing above), politicians claim to be competent economic managers.
- Transurban and its foreign owners grow richer while residents become poorer.
- Rinse and repeat.
Transurban’s entire business model is centred on privatising the benefits of high immigration while the costs are transferred to everyone else via what is effectively private taxation.
It is too late to complain about it now. 20 years of dumb government policies around immigration and privatisation have delivered us to this point
Given that high levels of immigration are projected to continue indefinitely, traffic on Transurban’s toll roads and earnings will continue to climb.
State government’s will also be forced to build more toll roads to keep pace with the never-ending people flood, resulting in more private taxation of residents.
If you don’t like these arrangements, Alan Fels, perhaps it is time that you pushed back against high immigration and the transformation of our major capitals into megacities?
