How the planning process was corrupted to prop up the toll road corporations
by Dr Chris Standen
Recent modelling by Veitch Lister Consulting confirms the $17 billion WestConnex toll road will increase traffic and congestion in inner Sydney, making getting around more difficult for many of us. But isn’t the purpose of new transport infrastructure to improve mobility?
Well, WestConnex wasn’t conceived by skilled transport planners, aiming to improve mobility and access for Sydney’s growing population. In fact, I don't know of one independent transport expert who thinks the scheme makes sense from a transport, or economic, perspective.
Rather, the scheme was designed to optimise revenues and profits for private toll road corporations – much like the West Gate Tunnel that Transurban, already earning $2.1 billion a year from tolls, has proposed for Melbourne.
These corporations’ business models depend not on improving mobility or liveability, but on cramming more traffic onto metropolitan roads, and on locking us into paying ever-increasing tolls. Indeed, Sydney Motorways Corporation chief, Dennis Cliche, recently described the new M4 toll as “exciting”.
It was crudely shoehorned into the final version of the 2012 NSW Transport Master Plan. Objectives such as "reducing congestion" and "linking Western Sydney to the Airport" were drafted retrospectively, to try to justify the scheme.
Embarrassingly, even these objectives won’t be met. As the new modelling shows, WestConnex will significantly increase congestion. Traffic on Parramatta Road has already surged, due to motorists avoiding the new tolls on the M4. WestConnex won’t actually “connex” to the Airport – and because the existing Airport motorway (M5 East) will be tolled $14 for a round trip from 2020, many people driving from Western Sydney will be switching to slower local roads.
A financial flop before it’s even built
The Commonwealth and NSW governments committed billions of dollars to this private enterprise before a very unconvincing business case was crafted. This funding included proceeds from the sale of income-generating public assets (electricity network).
In a reversal of a normal Public Private Partnership arrangement, the NSW Government then volunteered to build WestConnex on behalf of the private sector – saddling taxpayers with all the financial risk.
Despite public subsidies of over $5.6 billion to date, WestConnex still won’t be able to pay for itself through user charges – it’s a financial flop before it’s even built. To make up the shortfall, new tolls are being slapped on existing, publicly-owned motorways (M4 and M5 East), and extended on the M5 Southwest after 2026, when this motorway will have been paid off. Further substantial taxpayer subsidies are likely.
Will the scheme meet its objective of increasing corporate profits? Probably. While there is still significant uncertainty around future toll revenues and construction costs, the financial risk continues to be borne by taxpayers – because the NSW Government is yet to hand WestConnex over to the private sector.
I expect the future operator will acquire it at a fire-sale price. It will also want revenue guarantees. This is where this week’s announcement of a vehicle registration refund scheme for frequent toll road users comes in. This subsidy, likely to cost taxpayers $1 billion over the next 10 years, will encourage some travellers to switch from free roads and public transport to the private toll roads, shoring up traffic and revenue.
In terms of political popularity, a $358 incentive to use toll roads is unlikely to make up for new tolls of $3,300 a year on the existing M5 East, and $2,000 a year on the M4.
The biggest misuse of public funds in Australia's history?
Clearly, WestConnex is not in the public interest. The scheme involves arguably the biggest misuse of public funds for private gain in Australia's history – billions of dollars that could otherwise have been used for worthwhile infrastructure or services.
The harm to people’s lives is immeasurable. Construction is already destroying communities, affecting people's health, and disrupting sleep and travel – with years more to come. The new tolls on the existing motorways will hurt lower-income households, particularly in Western Sydney. The extra traffic generated through induced demand and toll-avoidance will lead to more road trauma and traffic noise. In particular, we can expect more trucks on local streets day and night, as they avoid the new tolls.
Traffic pollution – an invisible killer
Sydney's air already has unhealthy levels of traffic pollution. Diesel exhaust is a carcinogen in the same class as asbestos. Invisible and odourless petrochemical particulates penetrate deep into our lungs and into our blood supply while we work, exercise and sleep – and we may only become aware of the health consequences years later.
The toll road bosses and their government backers know WestConnex will cause more people to die and suffer chronic illness from traffic pollution in future. Is profit more important to them?
But it’s not a done deal. Stage 3 is still unfunded, and has major engineering challenges. Other cities worldwide have been saved from inner-city motorway schemes in the past. With jobs decentralisation, affordable housing policies, and investment in efficient and rapid mass transit, they are prospering without costly, destructive and polluting tollways.
(This article was originally published at https://www.linkedin.com/pulse/how-planning-process-corrupted-help-toll-road-chris-standen/ on 1 Nov 2017 and has been reproduced here with Dr Standen's kind permission.)