marcyveslane

2023-07-26 22:55:23

At What Toll?

Professor Fels is leading an independent tolling review for the NSW Government, closing 28 July. The review is looking at the equity of toll charges on the NSW motorway network from the perspective of fairly serving NSW motorway customers. This ostensible market of ‘NSW motorway customers’ appears to repeat a logical flaw called out by the UNEP in ‘Share the Road’ – that policymakers focused too narrowly on motorists (and, here, only paying motorists) when designing and operating roads. More of that later.

What could this review be looking at?

This is an opportunity to shape Sydney, its cities, local centers and communities

The NSW Government is at a crossroads, with the completion of the bulk of the Motorway network. There is an opportunity. The road network can be managed to support customers whose trips are better suited to the road network, without incentivising a wholesale reduction in the use of the public transport systems and increasing private vehicle dependency. Traditionally the road system has centered around managing traffic, alleviating congestion, increasing speed, providing ample vehicle parking, and accommodating the growing number of cars.

The Terms of Reference state that the review will

• “Optimise the road network to minimise congestion impacts, maximise the benefits of travel time savings and identify opportunities to reduce overall operating costs” and
• “in addition be responsible for negotiating with tolling operators to drive a good deal for motorists.”
• “ take into account the extent to which tolls should reflect the capital and operating costs of road provision, the impact different users have on road sustainability, and the use of roads throughout the day.”

These Terms of reference are inconsistent with the current Future Transport Strategy 2061 particularly Connecting our Customers’ Whole Lives .. through multimodal journeys, equitable access, enabling Successful Places for Communities through transport infrastructure making a tangible improvement to places, and it does not support Enabling Economic Activity, through a transport system being financially sustainable. The review should acknowledge the Movement and Place Framework position that the road systems has two functions, to provide access (supporting places) while also providing the ability to travel, and NSW’s Road User Space Allocation Policy which would apply the decongested surface roads but is currently outside the scope of enquiry. Driving a good deal for motorists and minimising congestion must be considered in the context of how they can support the overall transport system ( public, private, roads, rail, walking and cycling). Driving a good deal for Motorists must not be at the expense of the rest of the transport system.

Future Transport Strategy also highlights the goal of VkT stabilisation, and NSW has an existing Net Zero Plan. The Independent Tolling Review should be complementary to these policy objectives. If the Independent Tolling Review recommendations cause an increase in private vehicle trips it will make it harder for the Government to address the climate emergency, irrespective of motorway road investment sustainability.

Optimising the road network should:

• Create space for people to walk or ride safely on our multi-modal, mixed use surface roads (‘main streets’), by shifting vehicles to the motorway network and reallocating main street space to people.
• Shift vehicles who have a significant negative impacts on places to the motorway network, including those whose size and mass is incompatible with the local road network eg: commercial and heavy vehicles
• Support some private vehicle use of the motorway network where people have no other options (ie: residents in outer sydney suburbs with no public transport), including short term cost of living relief

Optimising the road network should not:

• Increase long term dependency on private vehicle travel, and a transition away from rail or Metro use
• Impact city centres and the local centres that lead to them, by flooding them with too many private cars
• Divert or reduce the Government’s ability to investment in more sustainable modes of transport

The road network should support more people walking – 50% of all trips are under 2km, perfect to walk or cycle

Most journeys are short and ideally sorted to walking and cycling. If the Tolling Review reform shifts vehicles to motorways, then more space should be reallocated on local streets for safe separated cycleways, more crossings and other place-making investments. Without reallocation of road space – the Tolling Review relief package will induce more cars and more trips, and result in long-term transport cost issues for users.

Many trips on motorways may not be economically productive either – journey to work represents only 10 – 14% of all trips made, particularly given the growth in working from home, and many trips could be made more efficiently by public transport.

The Tolling review should recommend the Government deliver promised and conditioned reallocation of space on Parramatta Road and Victoria Road (among others) to other modes in the next 2 years.

Local Communities (and the Government, as quantified benefits in the WestConnex business case) were promised improvements to Parramatta Road and Victoria Road as compensation for the impacts of the Motorway. In the case of Parramatta Road, this remains an undischarged planning condition. None of these improvements have been delivered. The Auditor General identified the cost of Parramatta Road improvements as $194 million, last year’s tolling relief was reported at $164 million. In addition, these roads are Strategic Cycleway Corridors, the Government should require additional road space reallocation on those roads to cycleways.

Likewise road space reallocation on other roads intended to be decongested by motorways should be delivered as a matter of priority (whether or not these were required by planning condition), including the Princes Highway, Kogarah and King Street Newtown. In the case of the latter two, we understand Transport for NSW’s own strategic transport strategies, bus planning teams and local councils all have envisaged this to occur, but no pathway to reallocation has been provided by TfNSW network operations to do so.

Any future motorways must ensure that they deliver, as a minimum, a ‘day one’ scheme that reallocates road space on the day of opening (with paint and potplants if necessary). A prime candidate is Falcon Street / Military Road between North Sydney and Mosman, should the government pursue the Northern Beaches Link.

So what’s wrong with the toll review approach?

Tolling affects the whole transport market, and the review should not focus narrowly on concessionaires, nor even the cost to motorists (using motorways or otherwise)

This review should not just consider competition between toll roads (a ‘sellers’ market), nor considering the market of ‘motorists’ or ‘toll road users’, but to consider all transport customers who currently use roads. Without this review considering public transport costs, and reallocating road space in accordance with the NSW Road User Space Allocation Policy to walking and cycling, it may risk making a decision that appears equitable on its face for toll-road motorists, but negatively impacts other users, or even induces more people to drive. The toll relief must not increase the number of people driving, nor the distance they drive.

Asking whether market power is being abused by concessionaires tendering for new tollways is a question that affects how a Government builds future motorways, not whether the current tolling regime is fair for customers. To determine if tolls themselves are fair, the market definition in the discussion paper needs to be reworked. Customers do not have a choice between tolled roads unless they happen to go to the same destination. However, the surface network of roads are ‘substitutable’ in competition terms, drivers can choose free (but more congested) surface roads, or other modes.

Case Study: Lane Cove Tunnel and Epping Road

The cost of the Lane Cove Tunnel is irrelevant to the customers of the Hills M2 motorway. Conversely, Lane Cove Tunnel induces traffic off Epping Road, so one could say the market for motorists is ‘parallel arterial roads’. However, Epping Road is also used by buses, cyclists and pedestrians too – and road space was reallocated from cars to those modes when the Lane Cove Tunnel was built, to induce customers to use those modes instead of driving. The investment improved transport choice for all transport customers, not just motorists, and the result was mode shift, not just rerouting – meaning the relevant market definition is ‘all road users’ in a given corridor.

Additionally, note that competition is not just on cost, it is time (thus surface congestion as a factor supporting motorways) as well as quality. For short trips, walking (and cycling) can provide a higher quality journey, as well as being better for physical and mental health. It also aligns with a number of strategic policy objectives including decarbonisation of transport – and so investments in roads should always also seek to deliver active transport improvements as well (as the UNEP argues in this publication) to avoid skewing trips back into cars.

There are other NSW policies to consider. Future Transport has a goal of stabilising Vehicle Kilometres Travelled (VKT), which requires mode shift. Any recommendation on toll reduction should be consistent with that policy, and modelled to ensure that toll relief does not induce people to make more car trips, nor to drive further. NSW Health’s Healthy Eating and Active Living Strategy includes Strategic Direction 4 to have public space designed to make walking and cycling easier -”more footpaths and cycleways … [and] better links to key destinations”.

This review should not just consider competition between toll road operators or the market of ‘motorists’ or ‘toll road users’, but all transport customers and including public transport, not increase VKT, and reallocate road space consistent with the NSW Road User Space Allocation Policy for walking and cycling and NSW Health HEAL Strategy. Any toll road recommendations should align with existing and emerging policies, ensuring that toll relief does not lead to an increase in car trips or driving distances. There are examples of a contrasting approach to the use of tolls, bypasses and road space allocation within the existing motorway network – see case study below contrasting two private toll roads and their impacts on local places and the transport system.

Case Study: Comparison of Cross City Tunnel and the Eastern Distributor

The Cross City Tunnel and Eastern Distributor are private sector toll road partnerships, serving as motorway bypasses around the CBD or City.
The Eastern Distributor offers users a choice between a tolled and fast bypass or a free and slow surface road option. The Eastern Distributor’s benefits include creating better places along Crown Street and Bourke Street (the former arterial pair that it replaced), slowing vehicles, and providing more walkable and bikeable communities through reducing through traffic, and then delivering surface road space reallocation over time.

The Cross City Tunnel provides users with a choice between a tolled and fast motorway bypass or free and fast CBD surface streets. However vehicles continue to use City streets due both to relatively high tolls and to the lack of change to east-west traffic priority through the CBD, negatively impacting economic productivity as well as noise and air pollution.
The Independent Toll Review should consider reforms that promote better outcomes for places and people. Removing or reducing the toll from the CCT may encourage cars to bypass the city, reducing vehicle impacts on the city.

Recommendations:

The Independent Toll Review must:

• Develop a Toll relief solution consistent with Governments Future Transport Strategy, Net Zero and the Movement and Place Framework
• Identify mechanisms that allow improvements for streets and places as well as motorway vehicle travel to ensure that strategies like the Strategic Cycleway Corridors for Greater Sydney can be implemented during the proposed 2-year toll relief period.
• Advise the Government to deliver promised benefits to communities by funding Parramatta Road and Victoria Road corridor improvements.

Could the Tolling Review support sustainable, affordable and healthy transport?

The tolling review aims to reduce the cost of living for lower socio-economic groups, particularly in western Sydney, by reducing their transportation costs. Long-term sustainable solutions are essential, as car-dependent communities are vulnerable to cost of living impacts. RMIT’s ‘VAMPIRE’ index has shown car-dependent communities are most vulnerable to cost of living impacts from transportation (and housing) costs – so providing them alternatives to driving is the most sustainable long term solution. The World Bank, too, says investing in non-motorised transport (NMT) “disproportionately benefits the poor because they rely more heavily on walking and biking to reach their destinations”.

Any subsidies proposed must support all transport modes, not just motorists using toll roads, and ensure the delivery of road space reallocation for walking and other sustainable modes. To this extent, a broad program similar to the NSW “Active Kids” vouchers, but for transport costs, would be preferable, and should equally allow people to buy a bike or top up their Opal card.

The outcome of the review must align with government strategic goals, including decarbonization of transport, economically sustainable transport, mode choice, and health. Walking, in particular, delivers physical and mental health benefits, making it a significant focus for public benefit. The declining trend in walking, among both adults and children in NSW, emphasizes the importance of promoting active transportation. Additionally, as toll relief might incur significant costs, reallocating road space, creating better places for people to walk has the potential to improve public health and can offset tolling expenses for the greater public good.

‘Questions Relating to the Toll Review’

Here are WalkSydney’s answers to some of the specific questions raised by the discussion paper.

General Questions	WalkSydney Response
A4	For toll reform in New South Wales, what would success look like to you?	Reform should be targeted at the cost of transport (as a subset of the cost of living), and to the extent that reform provides toll relief, induce drivers on surface roads into tunnels so that surface space can be urgently reallocated to walking and other sustainable modes.

Competition and Regulation	WalkSydney Response
C1	How do you think competition could influence road tolls and the efficiency of service performance by providers?	The competitiveness of transportation services generally should be considered. This is not a service performance issue so much as a market failure (to provide alternatives to motorways) that is providing service provider profits. Transport for NSW could be made more competitive with new KPIs based on equitable and cost-effective choices for all customers – such as cheaper bus fares or safer streets for walking, i.e. a better “customer outcome” across all modes, not just for motorists.

Criteria for assessing tolls – efficiency	WalkSydney Response
C1	Should tolls be set on a network basis? What are the pros and cons of doing this rather than setting tolls for individual parts of the motorway network as is now the case?	Yes, road pricing introduces a price signal to encourage alternative modes of travel and discourage unnecessary vehicular travel like short car trips. Any network basis should include the surface network (such as a Low Emissions Zone, Congestion Charging Zone or similar), with a high flagfall (i.e. discourage trips, rather than penalising the longest trips, that more likely need to be made by car). This would encourage people not to drive at all, particularly for short trips that can be walked, rather than merely switching people into tunnels (and into cars from other modes, which is misaligned to Future Transport).
C5	Cordon A CBD zone could potentially improve the local road network in the CBD with less cars, faster travel times, greater use of public transport, and a more pedestrian friendly environment. Do you think a CBD zone or other cordon zone pricing area would be desirable and/or feasible in Sydney? Are there other things that government could do to better achieve the desired outcomes of reducing congestion in particular areas?	A cordon is supported – see C1. This would discourage trips to areas where good alternatives exist. Align the cordon to the areas where the NSW Parking Space Levy is applied to discourage car use (the main cordon would extend from Sydney’s CBD to North Sydney, Milsons Point and St Leonards, with separate cordons around Bondi Junction, Chatswood and Parramatta). Giving people incentives to walk, cycle or catch public transport to these cordons, or generally is required as part of comprehensive transport cost reform. Providing a voucher alternative to toll relief, for a public transport pass, or to purchase a bike/eBike.
C7	Should vehicle emissions be considered in setting road tolls?	Yes, a discount could nudge the purchase of Zero Emissions Vehicles. For arbitrage reasons the rate should not be lower than the cost of more efficient and strategically aligned zero emissions modes (e.g. a single trip on a Zero Emissions Bus) nor should it be a toll-waiver or similar high incentive that will erode cycling and walking short trips.
C8	Road User PricingThere is an emerging view that road user pricing will need to be introduced across Australia, to replace the reducing revenue from a reducing fuel excise tax, due to the increasing uptake of hybrids and fully electric vehicles. What implications, if any, do you see this having on for motorway tolls and how should this Review respond to the issue?	EVs already face future road user pricing by 2027 in the form of an odometer tax. This should be extended to all users and toll discounts co-ordinated to avoid the unintended outcome that petrol cars pay less overall.Road User Pricing would remove the perverse incentive for people to continue to use the surface network when a motorway has been constructed that better suits their needs, and enable surface road space to be reallocated to more space for walking and public space, cycling and public transport. The Minister should mandate that TfNSW reallocate surface roadspace to public transport, walking and cycling as soon as road capacity is freed up (i.e. when the new pricing regime recommended by this review takes effect).Road user pricing and tolling could be co-ordinated to nudge people not to drive for short trips or trips better suited to public transport, and to use motorways rather than surface roads, by:Having a high flagfall (fixed charge) to discourage short trips that could be walked or bikedHaving a slightly lower per-kilometre charge for motorways vs surface mixed-mode roads to encourage longer trips off the surface roadsOffering discounts for zero emissions vehicles and other strategically aligned transport modes.

Heavy Vehicles	WalkSydney Response
D3	Are there sufficient incentives/requirements for heavy vehicles to use the motorways rather than the non-motorway network, eg for safer, more sustainable and productive outcomes?	All toll roads should adopt a similar approach to Northconnex on their respective duplicated surface roads. Even Northconnex still allows trucks on surface road if <12.5m long – a better approach would be to restrict all ‘through traffic’ trucks to only using the motorway network, unless they have a destination in the intermediate area or are carrying dangerous goods.

Public Transport	WalkSydney Response
E1	What interrelationships can be identified between tolls and public transport?	They are both part of the same transport ‘market’. Generally toll roads have made it less competitive to travel by public transport by reducing travel time for cars and making no changes on the surface network to improve buses. For example WestConnex’s business case claims as a benefit equivalent bus priority on Parramatta Road since 2013 (Figure 8), but no such priority has been delivered. As a result there is now a >10 minute travel time difference between travel by car and bus.Buses using toll roads, because of the social benefits they provide to all other transport users, should not be tolled.

Fairness	WalkSydney Response
G1	Is it appropriate that users pay road tolls?	Drivers are among the most subsidised NSW road users. The 2022 budget includes $20bn (37% of all transport) for drivers vs $1bn (18.5%) for buses and light rail, and only $0.6bn (1.2%) for walking and cycling.There is evidence [e.g. this study] that drivers consider most costs of car ownership as ‘sunk costs’ and are more responsive to marginal costs like parking charges and tolls. This means choosing to drive, catch a bus/train, cycle or walk will be based on the marginal cost (toll, bus fare), journey time and quality. A short pleasant walk is preferred (for quality) when marginal costs and the time penalty of searching for parking discourage short car trips. Conversely a long and expensive commute will compare unfavorably with a cheaper and faster drive. At present, a car trip from St Marys to Parramatta costs $11.11 (cap) in tolls, vs $6 by bus or train. If the toll was slashed to the Sydney Harbour Bridge/Tunnel rate of $4 (peak), this would drive people off PT and into cars.
G3	Are road tolls fair for all motorists? Could they be made fairer? If so, how?	Respectfully, the market definition here is wrong – the market is not just “motorists” but all road users. Road tolls for motorists are fair to all users by requiring them to pay for their fair share of road use, just as a public transport fare contributes to that service.
G4	Should the Government provide a subsidy to enable cheaper tolls?	Any subsidy the Government provides should be for transportation costs, not just tolls. One model would be the NSW “Active Kids” vouchers which can be used with a number of providers. If this was adopted, it could be used for toll rebates, public transport rebates or cycle purchase. Even this approach would ignore walkers and most cyclists, a common issue with focusing on road space for cars flagged in the UN programme ‘Share the Road’. To address this, the UN recommends a dedicated fund should be set up for non-motorised traffic (NMT) of at least 10% (see Investment in Walking and Cycling Infrastructure). As a minimum, matched funding equivalent to 10% of this subsidy should be allocated to new walking infrastructure, which is currently underfunded (the Get Active funding scheme being oversubscribed every year, for example). Some of this critical infrastructure can only be delivered by the Government and desperately need funding (such as restoring the Glebe Island Bridge).
G7	How can it be ensured that the benefit toll operators receive from increased traffic as a result of toll relief paid by Government is passed back to the community?	By proactively and quickly reallocating road space freed up on surface networks (including Parramatta Road, Victoria Road, Pennant Hills Road and King Street), the Government can ensure that the increased traffic and revenue in the motorways can also benefit public transport, walking and cycling improvements that those motorways claimed as benefits in their business cases but have yet to deliver.

RMIT CUR - VAMPIRE for Australian Capital Cities (SA1) 2016 - AURIN

This dataset is the Vulnerability Indices for Mortgage, Petroleum and Inflation Risks and Expenditure (VAMPIRE) for Australian Capital Cities for the year of 2016. The data has been calculated for...

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