Sydney motorists have become a cash cow for Australia's toll road king, Transurban, which has boosted toll revenue from city motorways such as the M2 and M5 by 15 per cent to almost $400 million.
The growth in Sydney in the first half of the financial year has outpaced increases in toll revenue for Transurban in Melbourne and Brisbane, where the company also operates the lion's share of toll motorways.
It led Transurban chief executive Scott Charlton to declare Sydney as "one of the largest toll road markets in the world".
With the state and federal governments searching for ways to fix heavily congested roads, Transurban is eager to further cement its grip on Sydney's network of toll roads, highlighting the "potential for significant network expansion over [the] medium term".
Mr Charlton said Sydney had a long pipeline of potential projects such as a western crossing of Sydney Harbour, the WestConnex motorway and roads to the second airport planned for Badgerys Creek in western Sydney.
"There is quite a long program; most of them will be some sort of tolling regime," he said. "There are lots of opportunities for Transurban to continue to participate."
However, he said Transurban was "really in the hands" of the Baird government regarding the level of involvement it wanted from the private sector in the motorway projects.
The government has been considering a Transurban proposal to overhaul the tolling regime for the Cross City Tunnel under Sydney's CBD.
"We are looking at how we can use the Cross City Tunnel to make the traffic flow better across the city, particularly with the light rail," Mr Charlton said. "We are still in discussions; they are very preliminary."
However, fears of major CBD congestion from the construction of the $2.1 billion light rail line to the eastern suburbs has, so far, failed to materialise.
It is likely to reduce the government's willingness to compensate Transurban for a reduction in the tunnel's toll which, at $5.27 for a one-way car journey, has long been regarded as too expensive.
Daily traffic rose 9 per cent in the six months to December across Transurban's toll road network in Sydney. That includes the Lane Cove Tunnel and the Westlink M7.
Mr Charlton said motorists were using the extra capacity on the M2 and M5 toll roads, which had flow-on effects for the revenue Transurban generated from the M7.
"We are seeing strong economic activity, particularly in Sydney, on the back of infrastructure spending and housing," he said.
The construction of a nine-kilometre tunnel connecting the Pacific Highway to the M2 Hills Motorway began last year. It is due for completion in late 2019.
Transurban is spending $1.3 billion on the project, while the NSW and federal governments have committed to both investing $404 million.
