Road funding reform

Our transport system, and how we use roads, is changing. How we fund infrastructure needs to be an integral component of any discussion around our transport future. As vehicle fleets are changing, fuel use and associated excises are falling – and our current system is becoming increasingly fiscally unsustainable. Transurban is contributing to the public conversation on road policy reform through research, practical trials and public advocacy.

The transport revolution

Electric, connected and automated vehicles are among the many transport innovations poised to enter the mainstream in the coming decade, all of which will fundamentally change the way we travel. This new wave of transport technology promises opportunities for more efficient, greener and safer mobility. It also provides a necessary tipping point for changing how we fund transport.

In FY17, Transurban worked to advance the discussion of the future of transport in Australia and the USA, with a particular focus on integrated planning and road-funding reform.

Transurban’s CEO Scott Charlton delivered the opening keynote presentation at the 2016 ITS World Congress opening ceremony. His presentation outlined the challenges and opportunities technology presents for the transport sector.

For more information on the opportunities and challenges for the transport industry that are affecting our cities, see our Insights Blog.

Road usage study

In late 2016, Transurban completed the first real-world test of user-pays road charging in Australia. Conducted over 17 months, 1,635 motorists drove 12 million kilometres under a range of charging options. The study tested user-pays options as an alternative to the current funding model and also trialled two demand-management charging approaches.

Transurban commissioned this study as response to the transport challenges Australia is now facing. Australian roads are already struggling to meet the demands of a growing and increasingly urbanised population – and our population is expected to grow rapidly for decades to come. At the same time our major road-funding source, fuel excise, is diminishing as we move to more fuel-efficient and electric vehicles. Declines in public road funding sources place additional stress on government infrastructure investment, maintenance and the development of new transport technologies.

Further, the economic cost of road congestion has been estimated at $13.7 billion and is projected to grow to $53 billion by the 2030s9. Traffic congestion and the performance of the wider road network affect our ability to deliver on our value proposition for our customers, government partners, investors and the broader community. For this reason, Transurban advocates for innovative transport solutions that will improve the efficiency of our networks and increase the liveability of our cities.

Study findings

Our road usage study showed that moving to a user-pays system would likely generate a sustainable funding source that could meet our future infrastructure needs. Under a user-pays road funding model, motorists who use the roads more, benefit more – as any fees paid to use the roads are reinvested into improving infrastructure and, ultimately, travel times.

The study also found a flexible user-pays model could enable demand management via charging signals. Specific charging signals can vary driving behaviours in congested geographies and at peak travel times.

The study also found a significant change in participants’ preference – with preferences shifting away from the current system and towards a user-pays model. Through experiencing different mechanisms to pay for their road use, participants recognised the benefits of a direct and transparent user-pays model versus the current system of opaque fees and charges.

The results of the Road Usage Study provided a number of insights into motorists preferences including:

  • 88 per cent of Australians had little or no knowledge about the current road-related funding sources such as fuel excise and vehicle registration fees
  • 85 per cent of participants were comfortable with the current funding system but after experiencing alternative ways of paying for their road use, 60 per cent said they preferred a user-pays system

Of the usage-based options tested in the trial:

  • 60 per cent of participants said they would prefer a charge per kilometre option as it was the easiest to understand

Of the demand-management options tested in the trial:

  • 63 per cent of participants who trialled cordon charging said they would be comfortable with this option – weekly cordon travel reduced by 10-15 per cent during the trial
  • 51 per cent of participants who trialled time-of-day charging said they would be comfortable with this option – the level of road use under this charging option was largely consistent with road-use levels during normal driving periods

At a fundamental level, our road usage study results show participants were open to trying a fairer and more transparent way of paying for their road use. The study showed that moving to a user-pays system would likely generate a sustainable and fair funding source that could meet our future infrastructure needs.

For more information on our Road Usage Study, see our Changed Conditions Ahead website.

USA road and rail regulatory reform

Transurban attended the Roads and Rail Regulatory Reform Event with President Donald J. Trump and Secretary Elaine L. Chao in June 2017.

President Trump launched Infrastructure Week, dedicated to focus on how we need to change our thinking to address the nation’s ageing infrastructure, promote job creation and grow the USA economy.

To highlight the importance of the Federal, State and Local partnership in addressing these needs, Secretary Chao hosted a listening session designed to increase understanding of how the USA can address a number of issues, including rural infrastructure, permitting reform, transformative projects, drinking and wastewater, transportation, and energy.

The purpose of the event was to ensure that government policies on infrastructure are aligned with the actual owners of the infrastructure. The Roads and Rail Regulatory Reform Event allowed for discussion on the Federal Government’s goals in permitting reform including:

  • Improve the transparency and efficiency of the current review process
  • Provide accountability to agencies responsible for reviews so reviews are done in a timely manner
  • Avoid redundant procedures and have one federal decision.

 


9) Infrastructure Australia, Australian Infrastructure Audit, 2015, p.32

UN Sustainable Development Goals relevant to this page