Roads: Public goods or private profit centres?

Last year’s front-page news was the ‘Transport Asset Holding Entity’, even though it had been evolving for years. We were assured by the then Premier that there was no intention to make billions disappear from the state budget. It had another more important purpose.

At the time, we now know, Transurban was negotiating for toll increases to pay for two tunnels that could never possibly pay their way: the Western Harbour Tunnel and the Beaches Link.

At that time, also, it was obvious that Transurban would own and operate all of Sydney’s motorways, including the as-yet-to-be-built tunnels. The Western Harbour Tunnel and the Beaches Link, if paid for by the state and by road users (through excessive tolls on other roads) were trophies for Transurban, since they were planned to feed traffic from the Warringah peninsula and the lower North Shore directly into their network south of the harbour.

This is much worse than just another case of crony capitalism. Transport, or ‘accessibility’ in urban planning terms, is the driver of urbanisation, determining land values, where jobs and industry locate, which centres grow, and thus determining fundamental questions of efficiency, fairness and equity across the Sydney region.

Elsewhere, it is now possible to shape the region, distribute jobs, promote prosperity in areas like Western Sydney, improve equity and reduce the use of fossil fuels through road pricing, whereby everyone pays for the use of roads according to distance, time of day, and policy objectives. Road pricing uses market signals to nudge travel behaviour in the best directions: it only takes a few cents to change behaviour.

We have known for decades that this is where regional transport has to go. The NSW Government has wilfully gone in the opposite direction, privatising roads and allowing them to operate as private profit centres, and in the process losing control of metropolitan planning as a force for community wellbeing and fairness.

Transurban collects around $30-40 for a trip across Sydney, three times as much for commercial vehicles. That’s $60-80 (and maybe $200) for the return trip. And the rest of the road system is operated to allow them to do so.

The present revelations about Transurban’s toll negotiations prove the point conclusively. It’s going to be a long journey back, and along the way Transurban’s owners will extract maximum ‘compensation’ from all of us.

And there is an even bigger story

The NSW Government has discovered that Sydney can be managed (and sold) through ‘entities’.

Creating big, powerful, hybrid agencies is now an art form. After the Transport Asset Holding Entity came the WestConnex Delivery Authority, and then the big one, Sydney Metro.

The true ramifications of Sydney Metro are explored in our 2018 piece on the Issues page, click here.

In brief, around 2017 someone in government realised that ‘metro’ could mean a type of train, or it could mean the Sydney region. A body set up to build a metro rail service could become a developer with a mandate to buy, operate, build and sell anything in the region – so that is exactly what the Transport Administration Amendment (Sydney Metro) Act 2018 did. Not only that, the whole ‘entity’ was made to be sold off, in whole or in parts.

The beauty of this new kind of ‘entity’, Sydney Metro, was that it would be a state agency when it needed all the powers to act in ways that developers cannot, and the protections of a private developer when it wanted secrecy and the shield of ‘commercial-in-confidence’. We’ve seen both in play, when Sydney Metro’s public projects are fast tracked through the ‘planning system’, yet the all-important details of those projects remain as hidden as any private developer’s.

It has been happening with the Western Harbour and Beaches Link tunnels.

The WestConnex Delivery Authority was progressively sold. It is now owned by a consortium led by Transurban. It exercises state powers that developers can only dream of, while having the powers of a private corporation that makes ‘purely technical and commercial decisions’ that the community is simply expected to live with. Watch this space: Transurban is likely to be running the tunnels project, with blank cheques from the NSW Government, until it ultimately acquires the tunnels at, say, half the cost of their construction.

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