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Toll Roads in Australia

Overview
The history of toll roads in Australia dates back to 1811 when the first toll road (Sydney–Parramatta) was
built.1 In 1932, the first toll bridge (Sydney Harbour Bridge) was built by the NSW government. Since the early
1990s, there has been increasing involvement of the private sector in toll road projects, causing a fundamental
change to the traditional landscape of toll roads in Australia.

Currently there are 16 toll roads operating in Australia (Table 1) with a total length of 241 km. Most of these
toll roads involve some form of Public Private Partnership (PPP). Of the 16, eight are in NSW, two in Victoria
and six in Queensland. In terms of road length, NSW accounts for 41 per cent, Victoria 25 per cent and
Queensland 34 per cent. Figure 1 shows the locations of toll roads in Australia.

The current toll roads in Australia can be broadly classified into three major categories (Table 1):

 Harbour/river crossing: bridges or tunnels that are short in length with a reasonable demand due to
physical barriers (toll roads 1-3).
 Tunnels or roads with tunnels: short-distance routes (2–7 km) that are aimed at avoiding congestion
within major urban areas (toll roads 4-8).
 Intra-city links: mostly long-distance routes connecting major traffic generating nodes (toll roads 9-16).
In Australia, fixed tolling (not changing with distance or time of day) is the main form of toll charge. Tolls on
some roads vary by distance travelled, time of day and day of week. In general, travelling on intra-city long-
distance link routes is cheaper on a cents/km basis compared with travelling on the other types of toll roads.
All tolls are now collected electronically in Australia.

Traffic performance for each of the above three toll road categories has differed in the past. Toll roads involving
tunnels experienced substantial difficulties in achieving their initial and future traffic targets. In contrast, traffic
growth performance for most intra-city long-distance link routes was relatively good after the initial traffic level
was established.

The toll road industry has seen significant restructuring over the past decade, leading to increased
concentration in ownership and operation. Reduced competition among toll road operators may not be
desirable from the viewpoint of the efficiency of the industry over the long run.

Congestion in the largest capital cities in Australia has been growing with rising population. Toll roads have
helped ease this congestion by allowing road infrastructure to be provided earlier than would have been
possible under the traditional model of road provision. Road users have benefited from toll roads in the form
of reduced travel time and vehicle operating costs, and improved safety. Studies by consultants have found
that toll roads have made a net positive contribution to the economic wellbeing of the country.

1
KPMG (2015).

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Development of new toll roads has been hampered by failures of toll roads in the recent past due to over-
optimistic traffic forecasts. More flexible forms of PPPs may be required that are attractive to both the
government and the private sector, especially for sharing traffic risks in the early years of toll road
operations.

Table 1 Toll Roads in Australia by Type

Type Name State Length (km) Original owner Majority Owner Operator
NSW Dept. of
1. Sydney Harbour Bridge NSW 1.1 RMS RMS
Public Works
Transfield Pty Ltd Kumagai Gumi Tunnel Holdings
Harbour/river crossing 2. Sydney Harbour Tunnel NSW 2.7
& Kumagai Gumi (50%) Pty Ltd
Brisbane City
3. Go Between Bridge QLD 0.3 Transurban Transurban
Council
4. Cross City Tunnel NSW 2.1 CCT Motorways Transurban Transurban
Connector
5. Lane Cove Tunnel NSW 3.8 Transurban Transurban
Motorways
Tunnels or roads with RiverCity
6. Clem7 QLD 6.8 Transurban Transurban
tunnels Motorway
7. Airport Link QLD 6.7 BrisConnections Transurban Transurban
Brisbane City
8. Legacy Way QLD 5.7 Transurban Transurban
Council
Airport Motorway
Intra-city links - short 9. M1 (Eastern Distributor) NSW 6.0 Transurban Transurban
Pty Ltd
- long Hills Motorway
10. M2 (Hills) NSW 21.0 Transurban Transurban
Pty Ltd
Western Sydney Transurban
11. M7 (Westlink) NSW 40.0 Transurban
Orbital Pty Ltd (50%)
Interlink Roads Transurban
12. M5 (South-West) NSW 22.0 Transurban
Pty Ltd (50%)
13. CityLink VIC 22.0 Transurban Transurban Transurban
Horizon Roads Horizon Roads
14. EastLink VIC 39.0 ConnectEast
Pty Ltd Pty Ltd
Queensland
15. Gateway Motorway QLD 23.1 Transurban Transurban
Investment Corp.
Logan Motorways
16. Logan Motorway QLD 38.7 Transurban Transurban
Pty Ltd

Source: Compiled by BITRE based on various sources.

Toll charges
Toll charges take a number of forms:

 Fixed
 Distance-based (M7 (Westlink))
 Time of day and day of week (Sydney Harbour Bridge and Tunnel)
Currently, 13 of the 16 toll roads in Australia use fixed tolling whereby there is a fixed toll for use of the
whole or specific sections of the motorway, regardless of the distance or time of day and day of week
travelled. The M7 uses distance-based tolling (cars 38.81 cents/km capped at $7.76 and trucks 99.35 cents/km
capped at $19.87). Toll charges on the Sydney Harbour Bridge and Tunnel vary according to time of day and
day of week. For people travelling outside of the peak periods or on weekends, a lower toll applies.

Table 2 shows charges for the 16 Australian toll roads. For toll roads that do not use fixed tolling or have
multiple entries/exits, tolls refer to weekday peak-hour charges or maximum charges for the full distance
travelled. Toll charges on intra-city links are generally lower on a cents/km basis (for cars, mostly in the range
of 15-32 cents/km and for trucks 41-96 cents/km assuming they travel the full distance), compared with
travelling on the other types of toll roads.

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Table 2 Toll Charges (A$ per full trip, excluding fees)

Type Name State Length (km) Cars Trucks Notes

Cars=Class A
1. Sydney Harbour Bridge NSW 1.1 4.0 4.0 Trucks=Class B
Cars=Class A
Harbour/river crossing 2. Sydney Harbour Tunnel NSW 2.7 4.0 4.0
Trucks=Class B
Cars=Class 2
3. Go Between Bridge QLD 0.3 3.1 8.2
Trucks=Class 4
Cars=Class A
4. Cross City Tunnel NSW 2.1 5.4 10.8
Trucks=Class
Cars=Class A
5. Lane Cove Tunnel NSW 3.8 3.2 8.9 Trucks=Class B

Tunnels or roads with Cars=Class 2

6. Clem7 QLD 6.8 4.9 13.1
tunnels Trucks=Class 4
Cars=Class 2
7. Airport Link QLD 6.7 5.3 14.0
Trucks=Class 4
Cars=Class 2
8. Legacy Way QLD 5.7 4.9 13.1
Trucks=Class 4
Cars=Class A
Intra-city links - short 9. M1 (Eastern Distributor) NSW 6.0 6.8 13.6 Trucks=Class B

- long Cars=Class A
10. M2 (Hills) NSW 21.0 6.7 20.2
Trucks=Class B
Cars=Class A
11. M7 (Westlink) NSW 40.0 7.8 19.9 Trucks=Class B
Cars=Class A
12. M5 (South-West) NSW 22.0 4.5 13.0
Trucks=Class B
Cars=Cars
13. CityLink VIC 22.0 8.7 11.6
Trucks=HCV
Cars=Cars
14. EastLink VIC 39.0 6.0 16.0
Trucks=HCV
Cars=Class 2
15. Gateway Motorway QLD 23.1 4.4 11.6
Trucks=Class 4
Cars=Class 2
16. Logan Motorway QLD 38.7 2.7 7.3
Trucks=Class 4

Notes: Definition of cars and trucks across the three States is slightly different.
Source: Compiled by BITRE on 31 August 2016 based on the latest information available on the relevant websites.

Traffic performance
Traffic performance just after opening was generally poor compared with the forecast traffic levels.
According to Black (2014), the actual traffic volumes at the opening were only 32-45 per cent of the forecast
values for tunnel projects and 48-82 per cent for selected intra-city link route projects (Table 3).

Table 3 Comparison of Daily Forecast and Actual Traffic on Australian Toll Roads

Toll Facility Opening Volume Opening Volume Ratio

(Daily Forecast) (Daily Actual) (Actual/Forecast)
Cross City Tunnel, Sydney 85,000 27,000 0.32
Lane Cove Tunnel, Sydney 104,786 44,420 0.42
Clem7, Brisbane 60,000 26,711 0.45
Airport Link, Brisbane 135,000 47,000 0.35
Eastern Distributor, Sydney 33,000 27,000 0.82
M2 (Hills), Sydney 72,000 40,000 0.56
M7 (Westlink), Sydney 196,500 94,808 0.48
EastLink, Melbourne 259,000 149,000 0.58

Source: Black (2014).

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Traffic performance since opening has varied. Figure 2 reproduces the chart created by Loader (2016)
showing traffic growth performance since 2006 for selected Australian toll roads. A number of observations
were made by Loader:

 Most roads show a cyclical trend, with weak growth between 2008/9–2011/12 (possibly related to
the Global Financial Crisis), and strong growth in 2013/4 and onwards.
 Growth in traffic has been much faster on non-radial roads (intra-city long-distance link routes):
- Sydney’s M7 (Westlink) and Melbourne’s EastLink have been outstanding examples.
- Melbourne’s CityLink has seen fairly steady growth over the past 5 years.
- More recently, traffic on Sydney’s M2 (Hills) and M5 (South-West) has rebounded strongly.

Industry ownership and operation

According to IBISWorld (Magner 2016), in the past 5 years, there has been an increased concentration in
ownership and operation in the toll road operators industry. Altogether, there are only six enterprises now,
a reduction from the nine enterprises that operated in 2010/11. The industry is now dominated by
Transurban with a market share of 73 per cent (in revenue terms). The second largest toll road operator is
Horizon Roads Pty Ltd, which manages EastLink (Melbourne) with a market share of 13.8 per cent. In recent
years, the Australian Competition and Consumer Commission approved a series of acquisitions by
Transurban on the grounds that there is adequate competition from non-toll roads and public transport, and
that state governments have powers to regulate the industry. IBISWorld rated the level of competition in the
toll road operators industry as ‘medium’.

Benefits of toll roads

Two studies have been undertaken by consultants2 to show the net benefits of Australian toll roads. In 2008,
Ernst & Young investigated the toll roads in Sydney and their economic contribution to NSW and Australia.
The approach was to update earlier cost-benefit analyses (CBAs) with revised traffic forecasts and actual
costs. The net present value (NPV) of the Sydney Orbital toll road projects was calculated to be $22.7b (in
2007 dollar terms). The direct road user benefits were estimated to be $30.8b, 80 per cent of which were
travel time savings. The improved road networks were also expected to increase GSP in NSW by 0.89 per
cent in 2020 compared with the no toll road development scenario.

KPMG (2015) assessed the net economic benefits of all toll roads in Australia. Congestion in the largest
capital cities in Australia has been increasing and toll roads have enabled infrastructure projects to be
delivered earlier than they would have been under the traditional model. KPMG assumed a base case of
delayed implementation (10 years as the central scenario), in contrast with Ernst & Young where the toll
roads were never built in the base case. The total discounted road user benefits were estimated to be $38.3b
in 2014 prices, 60 per cent of which were travel time savings and travel time reliability benefits. KPMG (2015)
also estimated the wider economic benefits (WEBs) associated with toll roads in Australia, which amounted
to $13.3b in discounted terms.

Future challenges
Currently, three projects are in the development pipeline: the Toowoomba Second Range Crossing,
NorthConnex and WestConnex in Sydney. The proposed Western Distributor in Melbourne is being
negotiated.

The private sector has been more cautious of taking on demand risks after a series of failures in the toll road
operators industry (Magner 2016). The structure of PPPs is under pressure for change, notably in relation to
the handling of traffic risks in the early years of toll road operations.

There are signs that concentration in the Australian toll road operators industry will remain high for the
foreseeable future. Lack of competition among toll road operators may not be desirable from the viewpoint
of the efficiency of the industry over the long run.

2
Both studies were commissioned by Transurban.

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Figure 1 Geographical Location of Toll Roads in Australia (2015)
NSW

Victoria

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Queensland

Source: KPMG (2015).

Figure 2 Rolling 12 Month Average Daily Traffic: Australian Toll Roads

Rolling 12 months average daily traffic, Australian toll roads
Eastlink (Melbourne) Citylink (Melbourne) Hills M2
M1 Eastern Distributor Westlink M7 M5 (south western)
Relative to December qtr 2006 (or first data point)

180% M4 (western) Lane Cove Sydney Harbour Bridge

Sydney Harbour Tunnel Sydney cross city Gateway Br (Brisbane)
Logan/Gateway Ext (Brisbane) Gateway (Brisbane) Logan (Brisbane)
Clem7 (Brisbane)
160%

140%

120%

100%

80%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: Loader (2016).

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References
Black, J. 2014, Traffic Risk in the Australian Toll Road Sector, Public Infrastructure Bulletin, Vol. 1, Issue 9.

Ernst & Young 2008, The Economic Contribution of Sydney’s Toll Roads to NSW and Australia, report prepared for
Transurban Limited, July.

KPMG 2015, Economic Contribution of Australia’s Toll Roads, report prepared for Transurban Limited, 11
August.

Loader, C. 2016, Traffic Volumes on Australian Toll Roads, September updates, accessed on 5 September 2016
at https://chartingtransport.com/2012/03/03/traffic-volumes-on-australian-toll-roads/.

Magner, L. 2016, Toll Road Operators in Australia, IBISWorld Industry Report I5299a, April.

© Commonwealth of Australia 2016

ISSN 1440-9593
ISBN: 978-1-925401-87-5 INFRA-3009

September 2016
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This publication should be attributed in the following way: Bureau of Infrastructure, Transport and Regional Economics (BITRE) 2016, Toll
Roads in Australia, Information Sheet 81, BITRE, Canberra.

Acknowledgement
BITRE wishes to thank KPMG and Chris Loader for supplying Figures 1 and 2 respectively for use in this Information Sheet.

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