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No. 100 Transurban Submission No 100 INQUIRY INTO ROAD TOLLING Organisation: Transurban Date received: 28 February 2017 28 February 2017 Hon Greg Donnelly MLC Committee Chair General Purpose Standing Committee No. 2 NSW Legislative Council Dear Mr Donnelly, RE: NSW LEGISLATIVE COUNCIL INQUIRY INTO ROAD TOLLING Please find attached Transurban’s submission for the NSW Legislative Council General Purpose Standing Committee No. 2 Inquiry into Road Tolling. If you require any further information, please contact Penny Roberts, Transurban’s Head of Public Affairs – NSW via email or phone Yours sincerely Andrew Head Group General Manager, NSW Transurban NSW Legislative Council Inquiry Into Road Tolling Transurban Submission 28 February 2017 Section Page 1 Transurans netork approac Commuters reigt • Travel-time savings across te netork • Travel-time savings across te netork including up to 5 minutes estbound including u to minutes using ills on the in ea eriods NortConnex and Westlin northbound in evening eak reducing oerating costs by u to • 30% quicer incident clearance time $95 er our than government guidelines • NorthConnex travel-time savings • $4.2 billion travel-time savings* estimated at u to minutes • $2. billion vehicle oerating cost Travel-time and oerating savings savings* ills $2.8 billion over 0 years* LCT Economic Community Westlink • Business/productivity benefits― • Training and up-silling or 00 employees $7 billion* CCT working on NorthConnex roject • Household benefits—$7 billion* • Public art and roadside regeneration project at Macquarie Park • Gross State Product—$9.5 billion* ED • Project to transform disused Hornsby M5 Quarry into a ublic ark • Busland regeneration roect in ornsby Shire to lant 7,00 native secies Government • billion investment in Sydney Transurbans netor ootrint in Sydney means e see oortunities to reduce overall congestion netor by Transurban and artners e tae a olistic vie o te oeration and both on and off our network of toll roads. Investors † over si years develoment o te road netor as a ole ur netoride insigts allo us to inoint te rater tan ocusing on a single toll road • ccelerated roect delivery― areas tat are starting to eerience strain analyse • Significant infrastructure investment Our focus is on enhancing the efficiency and safety lin NortConne) brougt te cause and imlement actions tat ensure te opportunity or ustralian investors orard 0 years of the network for the benefit of all NSW motorists best ossible eerience or motorists and to meet te needs o Sydneys groing We also understand te imact an incident can 70 o Transurban security olders • artner ocused on netor oulation ave beyond its immediate location so e are are ustralian outcomes By considering the overall traffic flow around the committed to continuing to acieve bestinclass 20 o Transurban security olders • ull regulatory control o ricing netor in alignment it government riorities roadside oerations and incident resonse rather than just the traffic on a single toll road, are rom NSW *Benefits Page 2 over 10 years , KPMG, 2015 † and ugradesNSW Legislative and NortConne Council Inquiry into Road Tolling | Transurban Submission Transurans netork approac Commuters reigt • Travel-time savings across te netork • Travel-time savings across te netork including up to 5 minutes estbound including u to minutes using ills on the in ea eriods NortConnex and Westlin northbound in evening eak reducing oerating costs by u to • 30% quicer incident clearance time $95 er our than government guidelines • NorthConnex travel-time savings • $4.2 billion travel-time savings* estimated at u to minutes $2. billion vehicle oerating cost Travel-time and oerating savings savings* ills $2.8 billion over 0 years* LCT Economic Community Westlink • Business/productivity benefits― • Training and up-silling or 00 employees $7 billion* CCT working on NorthConnex roject • Household benefits—$7 billion* • Public art and roadside regeneration project at Macquarie Park • Gross State Product—$9.5 billion* ED • Project to transform disused Hornsby M5 Quarry into a ublic ark • Busland regeneration roect in ornsby Shire to lant 7,00 native secies Government $3. billion investment in Sydney Transurbans netor ootrint in Sydney means e see oortunities to reduce overall congestion networ by Transurban and artners e tae a olistic vie o te oeration and both on and off our network of toll roads. Investors † over six years develoment o te road netor as a ole ur netoride insigts allo us to inoint te rater tan ocusing on a single toll road • Accelerated roject delivery― areas tat are starting to eerience strain analyse • Significant infrastructure investment Our focus is on enhancing the efficiency and safety M1–M lin NortConne brought te cause and imlement actions tat ensure te opportunity or ustralian investors orard 0 years) of the network for the benefit of all NSW motorists best ossible eerience or motorists and to meet te needs o Sydneys groing We also understand te imact an incident can 70 o Transurban security olders artner ocused on networ oulation ave beyond its immediate location so e are are ustralian outcome By considering the overall traffic flow around the committed to continuing to acieve bestinclass 20 o Transurban security olders • Full regulatory control o ricing netor in alignment it government riorities roadside oerations and incident resonse rather than just the traffic on a single toll road, are rom NSW *Benefits over 10 years , KPMG, 2015 † and ugrades and NortConne Section Page 3 Contents Executive Summary 6 Section 4: How Tolling Works 34 Tolling Innovation—Express Lanes, USA 35 About Transurban 8 Section 5: Regulatory Environment 36 Section 1: Economic Benefits of Toll Roads 10 Enforcement 38 Direct User Benefits 12 Benefits for the Freight Industry 14 Section 6: Alignment with Government Priorities 39 Section 2: Benefits of Private Sector Involvement in Transport Infrastructure 16 Appendix 1—Tolling Arrangements in Place on Transurban-Operated Roads Risk Allocation 20 42 Procurement and Project Delivery 20 Appendix 2—Development of the NSW Toll Road Network Operational Excellence and Customer Service 24 44 Technology Investment 25 Appendix 3—NorthConnex Technology 46 Section 3: Sydney’s Toll Road Network— Appendix 4—Glossary 48 A Bipartisan Achievement 26 Concession Arrangements 27 Determining the Length of the Concession 29 Setting Toll Prices 29 Tolling Arrangements for Freight Vehicles 30 Increasing Toll Prices 31 Notifying Customers of Changes to Toll Charges 31 Changes to Concession Terms 32 Process Transparency 32 Engaging the Freight Industry 33 Page 4 NSW Legislative Council Inquiry into Road Tolling | Transurban Submission Terms of Reference SECTION WHERE ADDRESSED 1. A review of the tolling regime in place on different roads and an explanation for Section 3 the differences between each Appendix 1 2. The process for determining how tolls are set for all types of vehicles, the length Section 3 of tolling concession periods, the rationale for extending these concession Section 4 periods and opportunities to increase transparency for the public, particularly given the absence in some instance of any competitive process 3. How tolling contracts are negotiated and varied and opportunities to increase Section 3 public scrutiny and accountability of the negotiations that take place between private tolling companies and the NSW Government 4. The rationale for allowing higher than CPI increases on certain tolls Section 3 5. The extent of any consultation undertaken with the trucking industry before Section 3 changes are made to tolling regimes 6. The appropriateness of involving the Independent Pricing and Regulatory Section 4 Tribunal (IPART) in the determination of tolls and their escalation, given the involvement of IPART and other such independent regulators in setting public transport fares and other services such as electricity transmission and distribution charges 7. Opportunities to increase the assurance to the public that tolling arrangements Section 1 represent the fairest possible outcome Section 2 Section 6 8. An examination of road tolling arrangements in overseas jurisdictions Section 4 Terms of Reference Page 5 Executive Summary Freedom of movement directly impacts quality of life and the The benefits that have come from private-sector participation go economic productivity of a city. Sydney’s toll road network provides well beyond the initial project, with the Public Private Partnership tangible evidence, having delivered billions of dollars in economic (PPP) model proven to deliver ongoing investment into the network. benefits to the city through the efficient movement of people, In recent years, Transurban and its partners have invested goods and services. Indeed, KPMG has estimated that over a approximately $1 billion to upgrade the Hills M2 and the M5 10- year period, Sydney’s toll road network has delivered more corridors with further investment into technology, operations and than $14 billion in economic, social and environmental benefits maintenance to enhance network efficiency. The risk transfer away to the city. from the public sector has also been shown to be real and effective, as demonstrated by the Cross City Tunnel and Lane Cove Tunnel These benefits mean travel-time savings, reliability gains and projects. In both instances the under performance of the project reduced vehicle operating costs for households and businesses. against the initial owners’ expectations led to significant losses to There are also environmental benefits
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