Regular users of Sydney’s toll roads will be familiar with that gentle “ping” as they pass through. Unfortunately, that gentle ping can turn into a hefty whack out of the bank account. Chief recipients of this stream of riches are corporate investors like Transurban.
Transurban wants WestConnex
The publicly listed company, Transurban, currently controls 15 out of 19 toll roads in Australia and seven are in NSW. Transurban now proposes to purchase a majority stake of WestConnex, in partnership with Abu Dhabi Investment Authority, Canada Pension Plan Investment Board and AustralianSuper.
WestConnex is a somewhat controversial $16.8 billion infrastructure project. Control over it essentially offers dominance over Sydney’s roads infrastructure. It makes sense Transurban would make an offer, given it already holds valuable information about traffic movements. In the past it has also made successful unsolicited proposals to the state government.
ACCC is worried
The Australian Competition and Consumer Commission (ACCC) is worried about lack of competition. After all, it is hard to see how handing WestConnex to Transurban gives that group anything less than a monopoly over Sydney’s roads.
Transurban has said in the past it does not have a monopoly because drivers have a choice whether to use roll roads or not. That argument starts to wear a bit thin when, one by one, all roads are becoming toll roads.
The ACCC asked for submissions by 31 May on these types of matters:
- If WestConnex went to an alternative bidder, there would be two players competing strongly for future toll road projects and government approval
- Motorists would benefit if two operators were competing for traffic on their roads
- Transurban is so far the only operator in 30 years to successfully make unsolicited proposals for a new toll road.
A report is expected by 19 July 2018.
Motorists in the dark
The recent Senate Committee on toll roads in Sydney concluded there is a giant shroud of secrecy around them. Motorists are equally in the dark about the sale of WestConnex. They don’t know exactly who will benefit and how from owning such a huge chunk of Sydney’s infrastructure.
The NSW government appears committed to the user-pays principle for all roads and there is no doubt users of toll roads are paying. These tolls increase at a much faster rate than inflation and over time become a relatively heavier burden for all households. Some of these roads, like the M5, are just as congested as non-tolled roads.
If the government is prepared to sell Westconnex to Transurban, that is its choice. Transurban has been a successful operator of toll roads so far and ought to have the opportunity to buy it.
Meanwhile, the sale of WestConnex is an important matter for everyone living in Sydney. Let us know what you think on Facebook.