One of the things that attracted me to Sydney is that it is arguably the “most tolled city in the world”. I did my dissertation on road pricing, and so from a research perspective this presents a huge opportunity. Road pricing has been the great white whale
Thanks for your post – I thought it interesting and there was much I’d agree with.
The first half of my career as a consultant was heavily focussed on toll roads, having started out on the Sydney Newcastle Freeway (which it wasn’t as it was tolled), the M4,M5 and M2 bids including traffic forecasting. I famously lost the M5 in a two-horse race because to quote the Government, our traffic forecast was too conservative!! With 12 months of opening the concessionaire was begging to be bailed out by Govt and was by the cunning move of giving them a bit more road to built and an opportunity to refinance. In the case of the M4 we lost that for a similar reason because the winning concession’s banker took all of the risks incl traffic and engineering !! The rest of Finance industry was furious but they made a motza!! And several new millionaires! We asked that the traffic signals be biased to give N-S traffic more green time and E-W less on the competing old multilane Western Highway to help travel times on the motorway be comparatively better but were told to go away – a few years later that is exactly what happened on the Cross City Tunnel!!
Private toll roads got going mostly because of:
the financial ingenuity of continuing to toll the Sydney Harbour Bridge just when the bridge was finally totally paid off in the 1980’s and hypothecating the toll (ramped from $0.20 to $1 overnight) onto paying for the Harbour Tunnel. That was a great study in road pricing!! So we good burghers of the North Shore have been always hammered for the privilege of crossing to the CBD! The evidence was that Sydney siders would pay tolls for better service.
The desire to implement the motorway system that the old DMR (my alma mater) had first drawn back in the 1950s – there wasn’t the capital to do it in the timeframe considered needed so the private finance e model was adopted. I always used to say that the DMR was smart to find a way to get their plan implemented while still remaining in overall charge of the road system – i.e. no one party controlled it all. But as you point out market forces have allowed one party Transurban to get into a monopoly position – so now I am wrong!
In regard to road pricing I have long wondered when – given we all have motorway tags – total road pricing will come into effect - every time we enter/exit the state road network each vehicle could be detected and the mileages computed and charged. Or if E- vehicles have to have their odometers read then why not all vehicles – though of course some smarties will find a way to corrupt this no doubt. It would be easier for vehicles over 5 years old as they all have to independently checked for road worthiness so annual milage could be recorded.
Finally the state taking back ownership in the way you suggest is fair. I pretty much proposed the same for taking the port of Darwin back into State ownership or at least 100% Australian. I thought the Chinese owners would be completely understanding if Australia wandered up and said “ Sorry we made a complete stuff up of this and we are going to compulsorily buy it back – but don’t worry, we give you a very fair price because the stuff up wasn’t your fault but ours!” LOL!!
Peter Thornton writes:
Thanks for your post – I thought it interesting and there was much I’d agree with.
The first half of my career as a consultant was heavily focussed on toll roads, having started out on the Sydney Newcastle Freeway (which it wasn’t as it was tolled), the M4,M5 and M2 bids including traffic forecasting. I famously lost the M5 in a two-horse race because to quote the Government, our traffic forecast was too conservative!! With 12 months of opening the concessionaire was begging to be bailed out by Govt and was by the cunning move of giving them a bit more road to built and an opportunity to refinance. In the case of the M4 we lost that for a similar reason because the winning concession’s banker took all of the risks incl traffic and engineering !! The rest of Finance industry was furious but they made a motza!! And several new millionaires! We asked that the traffic signals be biased to give N-S traffic more green time and E-W less on the competing old multilane Western Highway to help travel times on the motorway be comparatively better but were told to go away – a few years later that is exactly what happened on the Cross City Tunnel!!
Private toll roads got going mostly because of:
the financial ingenuity of continuing to toll the Sydney Harbour Bridge just when the bridge was finally totally paid off in the 1980’s and hypothecating the toll (ramped from $0.20 to $1 overnight) onto paying for the Harbour Tunnel. That was a great study in road pricing!! So we good burghers of the North Shore have been always hammered for the privilege of crossing to the CBD! The evidence was that Sydney siders would pay tolls for better service.
The desire to implement the motorway system that the old DMR (my alma mater) had first drawn back in the 1950s – there wasn’t the capital to do it in the timeframe considered needed so the private finance e model was adopted. I always used to say that the DMR was smart to find a way to get their plan implemented while still remaining in overall charge of the road system – i.e. no one party controlled it all. But as you point out market forces have allowed one party Transurban to get into a monopoly position – so now I am wrong!
In regard to road pricing I have long wondered when – given we all have motorway tags – total road pricing will come into effect - every time we enter/exit the state road network each vehicle could be detected and the mileages computed and charged. Or if E- vehicles have to have their odometers read then why not all vehicles – though of course some smarties will find a way to corrupt this no doubt. It would be easier for vehicles over 5 years old as they all have to independently checked for road worthiness so annual milage could be recorded.
Finally the state taking back ownership in the way you suggest is fair. I pretty much proposed the same for taking the port of Darwin back into State ownership or at least 100% Australian. I thought the Chinese owners would be completely understanding if Australia wandered up and said “ Sorry we made a complete stuff up of this and we are going to compulsorily buy it back – but don’t worry, we give you a very fair price because the stuff up wasn’t your fault but ours!” LOL!!