Home' Future Building Australian Infrastructure Review : Volume 3 Number 2 Contents 30 futurebuilding Volume 3 Number 2
That's a re ection of the changing nature of our
population and employment centres -- and how
much the orbital network in Sydney is being used.
We are all also acutely aware of the funding
challenges to nance infrastructure. To put it simply,
governments have a handful of choices: raise taxes,
take on debt, sell assets or apply user charges.
None are particularly palatable to taxpayers
-- but neither is trying to navigate a network at
Not so long ago, a blunt conversation about
network pricing would have been dif cult and
fanciful; but I believe the discussion has reached a
stage of maturity where public attitude appears to be
shifting towards an acceptance that tough decisions
must be made, and the planning processes now
need to turn into delivery processes.
I believe the public is willing to accept more
and diverse user charges if they can see the bene t
to their lives.
There continues to be a lot of talk -- particularly
in the Sydney context -- about network pricing as
a potential option for funding infrastructure and
There is already a form of network pricing in
fuel taxes, which account for about 38 cents per
litre of fuel costs.
This tax, however, is not transparent to the public,
nor is it clear how it transfers into a delivered road
service or makes people's lives better.
Transurban, in general, supports the concept of
network pricing to simplify user charges and make
them more consistent and transparent.
We also believe that network pricing can deliver
more ef cient utilisation of transport infrastructure
across the spectrum.
But there are still a number of fundamental
questions that need to be answered before any such
scheme could gain traction. And, of course, there
is also the political reality of what governments are
prepared to progress.
In recent months, the New South Wales
Government has ruled out congestion charges, but
has left road-pricing mechanisms, such as distance-
based tolling, on the table.
In Victoria, the government has stated that it does
not favour a congestion charge, but wants improved
network management across all roads.
In this context, it's interesting to consider the
parallels between road pricing discussions and
recent 'peak-pricing' initiatives implemented in
the New South Wales electricity network. Being an
electrical engineer, I understand these initiatives
can be controversial; but from an engineering and
ef ciency perspective, they are essential.
The aim is obviously to simply regulate demand
towards the times in the network where there is
existing capacity, as illustrated in the peak, shoulder
and off-peak pricing for residential electricity use in
New South Wales.
To build out a system -- whether it's electrical or
road transport -- to ful l the unrestricted demands
of the peak periods is, by de nition, uneconomical.
It's much more effective to make use of the under-
utilised capacity of the existing infrastructure, and to
shape the demand across all the alternatives.
If you look at just one of our Sydney motorways
-- the Eastern Distributor -- there are peaks in the
AM and PM periods, but the motorway has excess
capacity during other parts of the day. The question
is -- could peak pricing change this pro le? Or could
discounts during the off-peak periods produce a
better transport outcome for Sydney?
Consumers accept the concept of peak or demand
pricing in the context of electricity and other utilities,
but shy away when the same concepts are discussed
for transport infrastructure. As IPA has said in the past
-- and I think it's a great line -- roads are the 'last great
Is this because motorists believe they must travel
at certain times and do not see alternatives? One key
fact in the road pricing debate is that a signi cant
number of motorists do have an option regarding
when they travel. Some studies suggest as much
as 40 per cent of travel in the afternoon peak is
By applying pricing to regulate demand, our
cities are avoiding -- or at least deferring -- the need
for signi cant capital outlay. This pricing can also
be a source of funds for future transport projects.
We are asking people to consider their travel more
deliberately, and question the time of day they need
to travel, or by what mode they need to travel.
Pricing restrictions could be a bitter pill to swallow
for a country that prides itself on high standards of
living. Avoiding dif cult initiatives will result in
uneconomical decisions on infrastructure delivery
and the further build-out of existing roadways that are
only fully utilised for a small number of hours a day.
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