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Sydney is one of the most tolled jurisdictions in the world, but using toll roads would make Sean's business 'unfeasible'

If you've driven on Australia's east coast, you'll have noticed toll roads are dramatically increasing in number and cost.

Selling off the rights to build a road to tolling companies has become a popular way for governments to fund new infrastructure without it impacting the budget bottom line.

Sydney is now one of the most tolled jurisdictions in the world, costing drivers $2 billion a year.

Brisbane and Melbourne have far fewer tolled motorways than New South Wales, but all the states have something in common — most of them are majority operated by one company, Transurban.

In Queensland, the company has faced a class action over claims it charges exorbitant administration fees for missed fines, while in NSW it has faced parliamentary inquiries and now a state Treasury audit.

The NSW Government has now had to set aside half a billion dollars over the next two years to subsidise residents and small businesses unable to meet the rising cost of using the motorways.

Sean O'Connor has run his own delivery business for almost two decades in Sydney.

He says in that time, toll roads have become unaffordable.

"The margins are so tight all the way up the chain that at the end of the day, if I choose to take a toll, I wear it," he told 7.30

"It comes out of what my business turns over."

Based in Western Sydney, the father of five now navigates around the system to keep his business afloat, defeating one of the biggest arguments for the motorways — to keep trucks off smaller suburban roads.

"Being an owner-driver, there's enough economic stress managing everything else that goes into the business," he said. 

"Then suddenly you have a toll bill that automatically goes up on set dates, that goes up every year regardless of what the current economic situation is."

ABC's 7.30 hit the road with Sean O'Connor from before dawn – the time he starts his day in order to beat the traffic.

"The reason I start my day early, we avoid the toll roads, there's limited traffic on these local roads … it saves me in this instance $40," he said.

Two of his runs for the day, if he used toll roads, would have cost him $140 return.

"That's 20 per cent of what I charge as a business for the day," he said.

"It would totally make my business unfeasible; it wouldn't be worth doing it."

A recent parliamentary inquiry found residents in Sydney's southern, western and northern suburbs are largely paying the cost of the network.

NSW government figures show 17 of the top 20 Sydney postcodes applying for driver toll relief are within the western suburbs.

"I honestly can't see the end," Mr O'Connor told 7.30 as he sat next to his wife Michele.

She's a teacher and also has to start her day early if she's to avoid the tolled motorway.

"Where we are in Western Sydney, we have the M7, the M4 and we'll have the M9 shortly," Ms O'Connor said.

"It's right in the middle of the poorer community that will struggle once that happens."

Lack of competition a 'missed opportunity'

Rod Sims, the former chair of Australia's Competition and Consumer Commission (ACCC), has been highly critical of the NSW Government in the past for awarding contract after contract to road toll operator Transurban.

"The problem in NSW is there's a lack of competition for building the toll roads," he told 7.30.

"Transurban almost has a monopoly, and that means you don't get the benefit of competition, which means the tolls are higher than they otherwise need to be.

"The tolls could be lower if you had another player with its own stock of tolls roads bidding against Transurban — you'd get bidding tension and lower tolls.

"If the state built them, you've probably got a lower cost of getting access to the funds, and that in itself means you get lower tolls.

"A private company would never find itself in a position where it's only got one supplier. I think the NSW Government, successive governments, have missed an opportunity to get a new builder of toll roads into the market."

Details of some of the agreements signed between the Government and Transurban were made public in the recent parliamentary inquiry, revealing the company is allowed to increase toll rates by a minimum of 4 per cent a year or at the rate of inflation.

In a statement to 7.30, Transurban said it had invested $25 billion in Sydney's motorways since 2013, adding state governments set the toll charges, not private companies.

The company, which made $16 million profit last financial year, has a large stake in Australia's tolled roads.

It owns all of Brisbane's six toll roads and will soon operate two in Melbourne.

In NSW, it holds at least a 50 per cent stake in 10 of Sydney's tollways. The other two are in government hands.

'Amount just keeps going up and up'

Greens MP Abigail Boyd chaired the recent Upper House Parliamentary Inquiry into Sydney's tolling regime.

"We're one of the most tolled cities in the world, some would say we are the most tolled city in the world," she said.

"What we found is that people in Sydney are paying an exorbitant amount to Transurban primarily, just to get to work, just to get to school, to get to medical appointments and this amount just keeps going up and up. 

"The system is completely broken. Now what we have is the government providing so-called toll relief to drivers.

What they're actually doing is giving a direct amount of money to Transurban", she said.

Costs becoming 'too much to bear'

7.30 caught up with Steve Mashford from Shaw's Darwin Transport, which is an independent trucking company delivering goods nationwide.

"I've mainly driven the east coast, that's Melbourne and Brisbane; they don't have half as many toll roads as we have," he said.

Most of the company's yearly toll bill is racked up in Sydney. It spends $150,000 a year just to drive in NSW.

"Most of the stuff that goes to the supermarket gets there by truck, whether it be from the place it's grown or made to the shelf, it's all done by truck," Mr Mashford said. 

"Part of that cost has to be passed on; it's just too much to bear."

Mr Mashford believes the only solutions to the problem would be to either cap the toll cost, or introduce a curfew or a fixed rate for trucks.

No 'silver bullet' to solving high costs

Adrian Dwyer from Infrastructure Partnerships Australia, which represents companies involved in public projects including Transurban, agrees the system needs an overhaul.

However, he believes subsidies defeat the user-pay model currently in place.

"It's a problem to the extent that we've got a system that is complex already, and when you add in these subsidies, you add additional complexity and you undermine any fairness that existed," he said.

"In principle, a user-pay system is very fair, the person who uses the road benefits from the use of that road, they get a faster or safer journey."

Experts agree that there is no silver bullet to solving the high cost of Sydney's tolled road network.

"I think step one is for the NSW Government to not add any further toll roads to the network," Grattan Institute Transport expert Marion Terrill said.

"There's plenty of them that go to 2060 and beyond, so it's very difficult then to unscramble that egg … while the NSW Government could buy out these contracts from the toll road providers, the budget's already carrying a substantial amount of debt.

"All roads should be charged according to the time of day and where they are, demand-based usage … that allows for the community to get the best value out of the road they paid to build.

"I think the governments of NSW, Victoria, and Queensland have all fallen into the same trap really of thinking that toll roads are going to push off into the never-never the need to deal with the cost of building road.

"I think NSW is further advanced in that it's got a dozen of these toll roads and it's now got these toll relief schemes.

"I think the most important thing for Victoria and Queensland is to look at what's happened in NSW and to try and not make the same mistakes."

In a statement to 7.30, NSW Roads Minister Natalie Ward defended the decision to invest in toll roads, arguing it had helped both Labor and Liberal governments build infrastructure faster and reduce the burden on taxpayers.

Watch 7.30, Mondays to Thursdays 7.30pm on ABC iview and ABC TV

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