But Mr Minns’ election campaign included a pledge to “end privatisation”.
Over most of its term, the Coalition government favoured “asset recycling” to generate cash for new infrastructure, touting sales of roads such as the 33-kilometre WestConnex network, which raised more than $20 billion, as proof of a “successful asset recycling strategy”.
But in mid-2022 it backed away from suggestions that it would privatise the Western Harbour Tunnel and in December – when the Coalition was polling badly ahead of the state election – Mr Perrottet said his party would stop “privatising assets”.
If the incoming premier sticks to his promises, it means the government will not sell off future motorways, reducing the opportunities for Transurban to make money from building and operating new toll roads.
Sarah Shaw, chief investment officer at 4D Infrastructure, which owns shares in Transurban, said if the state government became responsible for all infrastructure development, there were likely to be delays in funding and delivering road projects.
“In terms of Transurban, we expect new road growth in NSW to stall or be significantly delayed,” Ms Shaw said, adding she did not believe a policy of banning privatisation without recycling capital via asset sales was sustainable.
But Transurban could benefit in the short term from stronger traffic on existing roads from Labor’s policy to cap toll fares, “mitigating some of the disappointment”, Ms Shaw said.
The new government will refund Sydney car drivers every quarter if they spend more than $60 a week on tolls from January 2024 for a period of two years.
The policy is design to give drivers some financial relief while an existing inquiry into restructuring NSW’s tolling systems is completed. Drivers pay different fares for every toll road they use in Sydney, with some racking up hundreds of dollars in fees every week.
Labor plans to hire former Australian Competition and Consumer Commission chairman Allan Fels to continue the review of Sydney’s toll road network.
Transurban’s existing toll roads and projects, such as the widening of the M7, are not expected to be affected by the change of government. WestConnex is expected to benefit from connections to new roads such as the Western Harbour Tunnel and Sydney Gateway (which won’t be tolled).
A Transurban spokesman said the company “looked forward to working with the new NSW Labor government, to keep Sydney moving and support a growing economy”.
It plans to work with the new government on toll fare reforms, but has stressed it will need to be compensated for any lost future income if fare structures are changed. Its concessions to operate toll roads are legal documents, which means the company can challenge any changes it dislikes in court.
Potential price changes
Labor has promised to publicly release previous agreements struck between the Coalition government and Transurban.
The NSW toll road inquiry is likely to consider future pricing for the Sydney Harbour Bridge and tunnel, which to date have been relatively cheap for motorists compared with other Sydney toll roads. Fares are only charged on the south-bound lanes and cost as little as $2.50 on weekends, and $4 during peak hours.
The Labor government will need to make the cost of using the existing bridge and tunnel similar to the cost of using the future Western Harbour Tunnel if it wants to encourage drivers to use both crossings.
Existing toll fares are being reviewed to relieve financial pressure on motorists struggling with surging bills for everything from groceries to electricity. Cars that use the full length of the WestConnex toll road pay more than $11, while trucks pay more than $33.
Transurban’s growth plans in North America have also slowed after it pulled out of a project in the US state of Maryland and its top US executive left the company.