Sydney’s motorists can expect the faster pace of toll increases to extend into next year due to many being linked to the rate of inflation, putting pressure on household budgets as the average price of petrol hovers above $2 a litre.
Unveiling record earnings on Wednesday, Transurban told investors that “additional inflation-linked escalations” in tolls would “positively impact” revenue in the 12 months to next June. The company operates almost all of Sydney’s toll roads, including the $17 billion WestConnex motorway.
The maximum toll for cars using WestConnex is $11.11, and for trucks $33.32.Credit: Louie Douvis
Transurban also appointed chief financial officer Michelle Jablko to replace long-time boss Scott Charlton in October. Jablko has been at Transurban since 2021, and is a former ANZ chief financial officer, investment banker and corporate lawyer.
Under agreements reached by successive NSW governments, tolls on the M2 and NorthConnex rise every three months by the rate of inflation or 1 per cent, while those on the Cross City and Lane Cove tunnels increase quarterly by the consumer price index.
Distance-based tolls for WestConnex also rise annually at the rate of inflation or 4 per cent, whichever is greater. The so-called escalation rates for WestConnex meant that tolls rose by 6 per cent in January.
The maximum toll for cars using WestConnex is $11.11, and for trucks $33.32.
Sydney has earned the title of the world’s most tolled city.Credit: Rhett Wyman
The most recent quarterly figures show Australia’s annual inflation rate at 6 per cent, down from 7 per cent in the March quarter.
The escalating tolls come amid a government-commissioned review led by former competition watchdog chairman Allan Fels into Sydney’s toll roads.
Charlton said the change of CEO was unlikely to result in a shift in the company’s strategy on tolling reform because it was an internal appointment.
“I don’t think you’ll see a big change,” he said. “The issue around fairness and equality and how the government wants the city to develop ... that really is a political policy decision.”
Charlton said he did not expect high petrol prices and toll increases to curb growth in traffic on Transurban’s toll roads in Sydney, which has been buoyed by population growth.
He cited a Transurban-commissioned survey showing the cost of petrol and tolls had fallen as areas of concern for households, which were more worried about grocery and electricity prices, and rents and mortgages.
The government expects an underground motorway interchange at Rozelle in the inner west – the final piece of WestConnex – to open by December. The $3.9 billion interchange will connect the recently opened M4-M8 Link between St Peters and Haberfield, the City West Link, the Anzac Bridge, Iron Cove and eventually the planned Western Harbour Tunnel.
While Transurban has previously said the opening was more likely to be in early 2024, Charlton said he now expected the Rozelle interchange to be opened either late this year or “very early next year”. Transurban will take over the operation of the interchange once it is completed.
“The Rozelle interchange will make it a bit easier to access the city but, until the Western Harbour Tunnel is complete, there’s still going to be obviously some issues with congestion around Anzac Bridge and Victoria Road until that traffic can use the Western Harbour Tunnel,” he said.
The 6.5-kilometre harbour tunnel between Rozelle and North Sydney is due to open to motorists in 2028, which is later than the original completion date of 2025-26.
About $17 billion of government motorway projects in Sydney, including the Sydney Gateway near Kingsford-Smith Airport at Mascot, will open in the next five years, which Charlton said would result in a significant increase in traffic on WestConnex.
Transurban also disclosed on Wednesday that Charlton’s total pay package rose to $6.45 million this year, up from $4.34 million in 2022.
The Morning Edition newsletter is our guide to the day’s most important and interesting stories, analysis and insights. Sign up here.