Toll Roads in Adelaide

[muzzamo]

http://www.adelaidenow.com.au/news/sout ... 6722417733

SOUTH Australia must face up to a "challenging but necessary debate'' on toll roads, the nation's road watchdog Infrastructure Australia insists.

Transport Minister Tom Koutsantonis rejected the need for toll roads for SA earlier this month, but a document released using Freedom on Information laws reveals Infrastructure Australia executive director of planning, Stephen Alchin, later reaffirmed the organisation's policy.

READ: Truckies angry at South Rd delays

"This is a challenging but necessary debate for governments and the community in Australia".

"Infrastructure Australia has proposed that governments need to consider user charging when assessing new infrastructure projects.''

The latest toll road debate began when Family First MLC Robert Brokenshire extracted from the SA Transport Department documents which showed it had secretly been carrying out financial modelling for tolls on the southern and Northern Express-ways, Port Road Expressway and the South Road Superway.

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Business SA chief executive Nigel McBride welcomed the Infrastructure Australia comments and called for an independent infrastructure body to lead the debate.

"This is why an independent infrastructure body should be established in South Australia," he said.

"Such a body would be able to independently assess these types of model and advise the Government accordingly."

Sections of the SA department, including chief executive Rod Hook, are open to debate on toll roads, but State Government policy is opposed.

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Despite the documents being hidden from the public for years, when the Transport Department released them to Mr Brokenshire, the State Government released then released them too in an attempt to control the agenda.

But in a parallel FOI application, which prompted the comments from Mr Alchin, Mr Brokenshire asked for access to all exchanges between Infrastructure Australia and the SA department.

Infrastructure Australia is the Federal Government authority which recommends projects including major roadworks for funding, and has reaffirmed its demands that the State Government provides toll road options for future projects when seeking money.

Infrastructure Australia is supposed to release documents free of charge to applicants if it is in the public interest, but in his response to the request Mr Alchin revealed there had been so much correspondence between the department and his organisation, that Mr Brokenshire would be charged between several hundred and several thousand dollars for the time it would take to compile and copy them.

Mr Brokenshire said it was extraordinary that so much work and money would be spent studying toll roads if there was never any intention to have them in SA.

"It is crazy that Infrastructure Australia requires a state where the current and alternative State Governments both have ruled out toll roads, yet the State taxpayer is still burdened with significant unnecessary expense to conduct feasibility studies on a toll road,'' he said.

Mr Koutsantonis stood by the State Government policy yesterday.

"We'll continue to work with the Federal Government and Infrastructure Australia to identify and fund major road projects that do not require South Australians to pay tolls,'' he said.

[Amused]

"challenging but necessary debate''

To me this reads, we're going to discuss this ad-nauseum until you either agree that we need toll roads or we give you toll roads despite your objection.

Again, I am not against toll roads, but I am against privatization of exisiting infrastructure. I am more than willing to accept and participate in additional roads being built with tolls in mind but I will never see justification for tolling South Road, just because it has been swept under the rug for so long that the bulge is now uncomfortable for the Government to walk on. This is not something that was unforseen for which required emergency expenditure. This was forseen, ignored, and now the taxpayer, the usual scapegoat, will be hit with triple dipping for road management incompetence at a Government level.

It *expletive* disgusts me. It really does.

[Waewick]

I agree amused tolls for new roads only.

However I actually would happily pay a toll on say, South Road, if it was going to go to funding the upgrades AND it was legislated to be removed once the upgrade is paid for.

[rhino]

I agree amused tolls for new roads only.

However I actually would happily pay a toll on say, South Road, if it was going to go to funding the upgrades AND it was legislated to be removed once the upgrade is paid for.

Will the tolls ever actually pay off the road? I imaging the interest on a loan big enough to fix South Road might be covered by the tolls. How much revenue does a tolled road actually make?

[zippySA]

Privatising existing infrastructure appears to me the absolute best option - it's conditions are known, volumes can be measured, and hence private sector can sensibly price the asset. Then the Government can utilise the revenue received to create the next major piece of infrastructure (the recycling concept that NSW seems to be doing very well and Infrastructure Australia seems to be warming up to as well as WA with recent loss of AAA credit rating).

Government gets to develop the projects they believe are highest priority, they are best positioned to finance and de-risk the initial stages (highest risk) and then sell it off to re-coup their investment - Super Funds would be all over this model to place their vast sums of capital. And the traditional concept remains true - Governments are not efficient operators of assets - private sector manages these key pieces of infrastructure better (whilst still able to be regulated and controlled through clever Governance to ensure no short-cuts or service deterioration). And then it starts all over again - using the money from the sale to fund the next project......

[Aidan]

If the private sector are genuinely better operators of assets, privatization of existing roads might make sense - though with private finance inherently more expensive, that can't be guaranteed. But it is unsafe to assume the private sector will manage things better. There are many cases of it leading to a decline.

[muzzamo]

I would support privatization of existing roads because the capacity on those roads needs to be priced properly.

If the government was capable of pricing the roads properly without pandering to special interest groups, I would support that too.

[rubberman]

I would support privatization of existing roads because the capacity on those roads needs to be priced properly.

If the government was capable of pricing the roads properly without pandering to special interest groups, I would support that too.

Why bother with privatisation? That is really just a tax increase by stealth, and if one is going to increase taxation, it might as well be the Government doing it rather than a private company.

The reason for this is that a private company will have to pay its investors more than the bond rate that government pays, and in addition, any form of privatisation puts hundreds of millions of dollars into the hands of the merchant banks 'facilitating' the process. So any charges from a privatisation process will need to cover the extra interest demanded by private investors, as well as the cost of paying off the bankers. Simply not worth it.

[monotonehell]

...And the traditional concept remains true - Governments are not efficient operators of assets - private sector manages these key pieces of infrastructure better...

I don't see any evidence for this "traditional concept" at all. Based on the way that the private sector currently runs its own infrastructure into the ground, focused on short term profitability, while sacrificing long term asset viability. Look at any current management of any large infrastructure corporation, from Telstra to Qantas. Maintenance is a large balance sheet item, so it's cut and cut until you have a mess of a copper network and planes breaking down more often.

[Amused]

...And the traditional concept remains true - Governments are not efficient operators of assets - private sector manages these key pieces of infrastructure better...

I don't see any evidence for this "traditional concept" at all. Based on the way that the private sector currently runs its own infrastructure into the ground, focused on short term profitability, while sacrificing long term asset viability. Look at any current management of any large infrastructure corporation, from Telstra to Qantas. Maintenance is a large balance sheet item, so it's cut and cut until you have a mess of a copper network and planes breaking down more often.

You speak the truth. 'Minimum necessary' should be the motto of privatisation. I paraphrase a letter from Telstra when I asked for something other than wireless internet in the rural and remote location of Pooraka;

" Dear Cash Cow

We are under no obligation to provide anything more than a party line of which pair gain is a step up. We have no intention to add further telecommunication infrastructure in your suburb even despite the fact that copper is available at the end of your street and you've offered to pay for cable to be laid to your address. In the end, this current arrangement is likely to earn more money from your street. Enjoy our bum pineapple of a wireless connection charging 3 times the price of adsl for 1/20th of the speed/data limit.

Sincerely

Your money or GTFO"

In summary, privatisation of infrastructure is in absolutely no way, shape or form in the best interests of the constituents of who Government are elected to represent. I highly doubt privatisation of arterial roads will be much different.

[rubberman]

And the traditional concept remains true - Governments are not efficient operators of assets - private sector manages these key pieces of infrastructure better (whilst still able to be regulated and controlled through clever Governance to ensure no short-cuts or service deterioration). And then it starts all over again - using the money from the sale to fund the next project......

I agree that this is the traditional concept that many people have.

However, the reality is that the traditional concept does not pan out in real life. For example, did water or power cost less or become more reliable as a result of private sector management of the assets? Did anything like the absolutely scandalous bus operations of the past few years ever happen under the days of the government owned MTT? Ever?

I don't believe for one minute that everything should be owned or operated by government, not by a long chalk. However, when you have such things as highways, water supplies, power and telecom infrastructure, any so-called efficiencies in the private sector are overwhelmed by the fact that those assets are monopolies, and you cannot stop the private sector gouging. Regulation does not work since regulators are generally lawyers or economists who know nothing about infrastructure, and the companies can run rings around the regulator by blinding them with science/engineering/operational blather. It happens all the time, and is one of the reasons for ongoing high prices for privately operated infrastructure.

The other disaster that happens under privatisation is that part of the so-called efficiency is merely removal of any sort of research, development or planning. This saves money...for a short while. Then of course, when the State has no technical knowledge in a particular area, they can be hit with huge overcharges for technical items such as trams (paid over double for the Citadis - better trams could have been had for half the price) or the desal plant (My God...the Spaniards certainly saw us coming).

The privatisation or outsourcing of water and power and public transport has left SA with almost no expertise in this area whatsoever. The contractors know this, and charge accordingly.

It does not matter how efficient they are - the taxpayer never ever sees the benefit. After all, if I were a private contractor, why would I give money to the taxpayer when I can and should, under law, give it to my shareholders (minus my well deserved bonus of course)?

[fabricator]

http://www.adelaidenow.com.au/news/sout ... 6853032712

Productivity Commission proposes 'Big Brother' toll roads and says infrastructure reforms could save $1bn a year

THE Abbott Government is considering a Productivity Commission proposal to track your car and charge you for driving on some existing major highways.

This is just the sort of nonsense I expected Abbott to come up with.
I'm sure we could save even more if we just stopped building roads all together.

[Aidan]

Seven News report of it here. Both major parties at state level have rejected it.

[Waewick]

and so did Abbott.

honestly, get a grip people.

[[Shuz]]

Wholly in favour of the idea. Northern Expressway, Southern Expressway, Port River Expressway and the Superway should all be toll roads.

The South East Freeway shouldn't be tolled, because it is literally the only suitable traffic route available through the Adelaide Hills. As for the other 'freeways / highways', there are alternative roads/routes available to motorists.