Transportist: October 2025
Welcome to the latest issue of The Transportist, especially to our new readers. As always you can follow me on Mastodon, BlueSky, or RSS.
Posts
Research
News & Links
Green Lights could have shorter cycles in Sydney, but the study was buried for no discernible reason
NSW Unveils first electric bus depot with gantry-mounted fast charging tech
Your Regular Reminder that Cars are Weapons
Michigan Mormon Church Attack -- A man crashed a pickup truck into the building on Sunday morning and then opened fire on worshipers.
Media
New Sydney airport will be passenger-free for first 12 months
Interview with Peter Jenkins:
Is there a danger of Western Sydney International becoming a white elephant and predominantly an airport for freight? This being predicated on a range of issues from connectivity which flow on to airline hesitancy to base themselve there, to the expansion of Sydney Airport to provide international and domestic gates out of a new terminal connecting T2 and T3 expected to be in place by 2031.
There was a danger of becoming a white elephant beforehand, the demand forecasts are optimistic. The airport is remote for most of Sydney (By road, it is 26 km from Liverpool CBD, Liverpool CBD is just 25 km from Sydney Airport International Terminal), so the passenger market for which WSA is the most convenient airport is limited at present. While eventually greater Sydney may grow into it, the airport is early to be capturing a large market share, and is akin to Washington-Dulles Airport (42 km from Washington DC CBD), which opened in 1962 and only “overtook [Washington National] Reagan [Airport] in total enplanements in 2019.” according to Wikipedia. And notably this is with restrictions on DCA serving international and long flights, which are required to use Dulles or nearby Baltimore-Washington International.
The new airport’s value is in providing redundancy (in case something bad happens at Sydney Airport, either temporarily or permanently), and competition, driving Sydney Airport to improve service and lower costs to retain passengers and airlines. It also allows overnight flights, which are restricted at Sydney Airport, which might be especially useful for freight.
* Does the Sydney Airport expansion plan throw them further issues, including on the freight front given more passenger aircraft movements will give Sydney Airport more opportunity to move freight in the belly of passenger aircraft?
I am sure the promoters of WSA would like less rather than more competition, however it might be the competition from WSA which is pushing Sydney Airport to improve services and capacity, rather than exploit their previous monopoly position.
Is an end to Sydney’s ‘tollmania’ in sight? Negotiations for a fairer and simpler system slow to a crawl
Interview Questions with Penry Buckley:
1. What are the likely sticking points in negotiations between the government and Transurban to bring control of tolling under NSW Motorways?
In short money.
Transurban (and its Superannuation owners AND partners) have contracts which they believe, and the market values, at a certain amount of Net Present Value (capitalisation of future revenue streams). They have the right to raise tolls by a certain amount each year (I have heard the maximum of inflation or 4%, but this might vary by contract, and I’ve never read those, because they are secret). If they are to give up control of this revenue stream, they will want to be compensated.
In my view, the easiest thing to do is buy out Transurban (and partners) out, but that is expensive in the short run (in the long run, the new owners, presumably the People of NSW, would get the same revenue Transurban and partners are giving up by selling out). In principle this could be done by selling bonds, probably to the same superannuation funds who currently mostly own Transurban, and paying them a certain amount of money each year, backed by toll revenue and taxes.
Obviously Transurban will think this is worth more and the government will think this is worth less. Otherwise they would have come to terms.
So what can the government give to Transurban to get back tolling rate powers it unwisely gave up? This leads to ...
2. Are we likely to see an extension of tolling concessions or administration fees to fund toll reform? What would that look like for drivers?
We could see both a temporal and spatial extension of tolling concessions to buy out Transurban’s pricing rights under the current contract. This could be a fee-for-service, where the government gives them a maintenance and operations contract per year, or a fee per vehicle-kilometre travelled (which are called “shadow tolls”), for a set of roads over a period of time. The set of roads would likely be larger than present, and the period of time might be longer than current contracts. This fee would be independent of the tolls (which the government could set), though obviously largely funded by them (though money is fungible and they may not be hypothecated (ring-fenced), they would be similar orders of magnitude).
Future revenue to Transurban may not be worth that much though, because after discounting, money 30 or 40 years in the future is worth pennies on the dollar today. This suggests expanding the set of roads (bridges, and tunnels as well) which Transurban would have an O&M contract on. One imagines it could be all motorways. If the government were willing to go all in on road pricing (which I doubt it is), it could become a Roads utility.
3. How are residents of western Sydney disproportionately affected by tolling (in the absence of the toll cap)?
People of western Sydney typically have more tolled links per commute, longer average distances, fewer untolled substitutes than inner-east and inner-north corridors. The Independent Toll Review noted that without reform, the burden “lands heaviest” on western Sydney and other car-reliant areas. That said, because of the higher travel costs, (time and money), real estate in western Sydney is less expensive than it would be if travel costs were lower (as in eastern Sydney). Time and land are traded off, and travel costs are largely capitalised in land value.
4. Can you summarise how Transurban’s ownership structures work for the 10 privately tolled roads in Sydney - are they complex by design? Are there any particularly complicated examples?
They are asset Special Purpose Vehicles (SPVs) with non-recourse debt, each governed by a concession deed: Transurban owns stakes directly (e.g., M2, Lane Cove Tunnel, Cross City Tunnel), or via consortia that ring-fence financing and cash flows.
From Transurban’s Annual Reports:
Direct or majority Transurban stakes
Hills M2: 100% Transurban, to 2048.
Lane Cove Tunnel: 100% Transurban, to 2048.
Cross City Tunnel: 100% Transurban (operator under deed), to 2035.
Eastern Distributor (Airport Motorway Ltd): 75.1% Transurban, partners IFM and UniSuper, to 2048.
Consortia structures
WestConnex assets (M4, M8, M4–M8 Link, M5 East, Rozelle Interchange; and from Dec 2026, M5 South-West folds in): owned by Sydney Transport Partners (STP), with Transurban the 50% lead; partners include AustralianSuper, CPP Investments, and Tawreed/CDPQ. Concessions run to 2060. These have multiple stages under one umbrella and a long-dated, network-within-a-network deed.
Westlink M7 + NorthConnex: held via NorthWestern Roads Group (NWR)—Transurban 50%, QIC 25%, CPP Investments 25%. The M7 runs to 2048, extending to 2051 after the M7–M12 project; NorthConnex runs to 2048. These SPVs raise non-recourse debt at the asset level.
These are complex by design: each road or stage sits in its own company with its own debt and deed, often with different partner mixes and escalation formulas. This limits contagion across assets (if one road goes bankrupt, not unheard of with toll roads, buying assets out of bankruptcy is in part how Transurban got to where it is, others are insulated because of this complex structure), this satisfies institutional investors’ (i.e. Super funds) needs, and makes pricing hard.
5. My entry point for the piece is the history of tolling on the Harbour Bridge, which has obviously been a tremendous boon for the public - but what is your general view of modern toll roads, and the way they operate? They are definitely less beautiful, but are they still as useful, even if users pay a high price?
Well nothing is quite as useful as the Harbour Bridge.
But toll roads can be useful. Tolls don’t have to be set to maximise profits, that’s a policy choice. They can instead have tolls set to carry more traffic, especially freight, so there are fewer cars on surface streets, which could then be slowed down and returned to their historic uses for local movement and access, people, and public transport.
There was also an ABC Sydney interview Sept. 29 about “Tollmania,” which is a good name for a band but a terrible name for a moral panic.
CBC Radio Interview on Trucks and Road Capacity aired September 16, 2025 CBU-AM, 11:30AM PST. (I didn’t do the transcription, but I did clean it up with AI, I and I didn’t even hear the interview, but seems likely I said something along these lines)
David Levinson is a professor of transport engineering at the University of Sydney. He says: not only do trucks and SUVs take up more road space because they’re bigger, but they also make congestion worse because everyone around them gives them extra space.
Think about what it’s like when you’re travelling behind a really big truck, like an eighteen-wheeler. You give it a wide berth when following, because it has a large mass and might slow suddenly. You don’t have much reaction time, and you can’t see what’s in front of it. You might respond: oh yeah, if you’re driving behind a bus, you also stay farther back, especially at an intersection, because you need to see the light.
And David says with big SUVs it’s the same process in miniature. Instead of leaving two car lengths, you might leave two and a half. So David was thinking about all this extra space and wondered if it might be making traffic worse overall. He set out to test his theory, working with the City of Minneapolis [sic: State of Minnesota] and their traffic data, which goes back decades. He analysed traffic flow from 1995 to 2019, focusing on evening rush hour, when congestion was heaviest. He looked at traffic density, flow, and something called throughput—the maximum number of cars that can pass a point in one hour.
What he found is that traffic has slowed by more than ten percent over that 25-year period. Throughput dropped from 1,850 vehicles an hour to just 1,600 vehicles— a significant loss of capacity. These roads are simply handling fewer vehicles. Meanwhile, the vehicle mix has shifted: trucks increased by more than 150 percent, and SUVs by more than 1,000 percent.