For whom the road tolls

On the public interest of Sydney's toll roads.

Image credit: Sice.com

No city in the world has more kilometers of toll road than Sydney. Across nine routes and 135 kilometres, drivers have to pay between two and 25 dollars just for the use of the road, with six more tolled roads to be built by 2023. Despite toll roads being the neoliberal infrastructure project of choice for decades in New South Wales, the decision making process responsible for the construction of Sydney’s toll roads is deeply flawed, and functions more so to deliver a profit to the road’s financiers and private operators than it does to serve the public interest.

In Sydney, adequate funding has proved a major roadblock to the construction of public roads. In New Zealand, for example, the government is responsible for the funding and planning of road projects. But in recent years, coalition governments in New South Wales have opted to use hybrid public-private partnerships (PPPs) to offset costs. Publicly traded company Transurban sees near exclusivity in engaging the government and private companies regarding financing and ownership of roads in Sydney. In exchange for assuming the cost of building a road, or buying the road upon its completion, a private company gains the right to set and collect money from tolls, in a blatant co-opting of public resources.

Public-private partnerships have created an opaque decision-making process that locks the public out from meaningful input in what projects are built. In building Westconnex, the Baird government, with Gladys Berejiklian as Roads Minister, contributed to this un-democratic process in two especially pernicious ways. The first was the creation of a proprietary limited company, Sydney Motorway Corporation Pty Ltd in 2014. Having a distinct corporate body, with a board made up of government officials and financiers, enabled the NSW government to avoid various accountability measures, such as freedom of information requests, greatly reducing transparency. Similarly, successive Liberal governments have made the public feedback process increasingly disjointed. The O’Farrell government created Infrastructure NSW as an advisory organisation, yet activists allege that in Westconnex’s public consultation period, Infrastructure NSW never permitted alternatives, such as light or heavy rail, to be discussed —only potential minor variations to the project could be considered. This administrative manipulation, however legal, has greatly reduced the transparency of Westconnex and other recent road-building projects, eroding the trust of the public for whose benefit roads are ostensibly built. Even before Westconnex, public-private toll road partnerships in Sydney have led to inviable and costly projects with little public good. The Cross City Tunnel (CCT) was built in 2004 in partnership with the Cross City Motorways corporation for over double its expected cost, despite warnings by transport planner Michelle Zeibots that usage estimates were “physically impossible”. Predictably, use of the CCT was one third of estimates, and Cross City Motorways went into receivership before selling the tunnel at a loss. The Lane Cove Tunnel similarly forced its owners to go into receivership, after traffic use was half that of estimates. 

To generate the biggest possible revenue for the rights to operate a toll road, governments are incentivised to generate as much traffic on the toll routes as possible. Needless CBD road closures after the construction of the CCT and misleading signage that implied that the CCT was the only route from the eastern suburbs to the Harbour Tunnel demonstrate how PPP’s get in the way of effective infrastructure planning.

Recent state Liberal governments have worsened the problem in the manner in which they make PPP deals. Part of Mike Baird’s asset recycling program involved a government plan to build and initially operate Westconnex, before selling it at a later stage. The desire to lessen the risk for the private sector by selling the asset based on usage data, rather than estimates, demonstrates a willingness to trade off the utility of a project to the public for a slight budget boost. Either traffic usage is high, and Sydney is set on a path to increased vehicle usage that squashes any potential benefits of building roads and mortgages the state’s environmental future, or the roads go unused, and the government is burdened with an asset that has to be sold at a loss.

Roads have become increasingly expensive to use as a result of this neoliberal approach to infrastructure. Having a private company extract profit from the road necessarily drives up the costs for users, and government restrictions of toll rises have on multiple occasions proven unenforceable. As a consequence of toll prices rising twice as fast as real wage growth on various Sydney roads, and users being required to pay tolls long after projects have been paid off, people disadvantaged by the distance they live from CBD workplaces are forced into paying extortionate prices for infrastructure in which they had little say, and even less choice. Road building at the expense of more efficient forms of public transport only serves to build a car culture that accelerates climate change and will inevitably lead to ever more congestion in the future.

Ending the use of PPPs and paying for roads in more equitable ways such as fuel excises and progressive taxation would solve many of these problems. The privatisation of Sydney’s roads speaks to  more serious and broader problems with the current approach to infrastructure creation. The short-sighted obsession with reducing the perceived cost of infrastructure projects has become a feature of government policy, but one which, given the privatisation of electricity, buses and ferries across Sydney, is hardly surprising.

Filed under: