Documents reveal Transport for NSW has prepared an overhaul to save billions in the state’s transport costs


The documents warn that, “without action”, the annual “subsidy” from the government to cover the cost of transport will surge from $5.8 billion last year to $9.6 billion in 2028.

By 2028, the amount agencies collect from fares and other charges is expected to cover just 27 per cent of the overall cost of services, compared with 32 per cent last year. “Rising costs and stagnant revenues are projected to require greater government subsidy,” the documents say.

Selling or redeveloping hundreds of state-owned properties are among measures being considered to secure $7 billion in annual savings by the end of next decade.

Selling or redeveloping hundreds of state-owned properties are among measures being considered to secure $7 billion in annual savings by the end of next decade.Credit:Dominic Lorrimer

Transport for NSW secretary Rodd Staples said the agency had talked to the Berejiklian government about the financial pressures but he emphasised no policy decisions had been made.

“This is sharing with them thoughts and opportunities,” he said.

“In terms of any major policy decision, we’ll have to do that on its merits and I’ll do that in consultation with the ministers and Premier.”

Transport Minister Andrew Constance declined to say what proposals from the transport agency the government was likely to adopt but said commuters were his number-one priority and he expected improvements to frontline customer services.

Transport for NSW secretary Rodd Staples.

Transport for NSW secretary Rodd Staples.Credit:Wolter Peeters

The documents reveal that transport officials estimate up to $2.1 billion could be saved annually by 2028 from “reform” of road levies and taxes, changes to benefits and concessions for public transport and tiered pricing to reflect a “more equitable user-pays framework”.

A further $2.3 billion boost to Transport’s finances within the next decade could be realised from selling, rezoning, developing or improving about 350 properties “with strong commercial potential”, and from licensing the use of advertising space, intellectual property and data.

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And up to $1.9 billion in savings each year by 2028 could come from a renewal of its 28,000-strong workforce “while holding the headcount largely steady at 2018 levels, embracing new skills, new technology and improving customer service and cost recovery”.

The documents do not detail what the proposed measures, such as reform of road levies or changes to public transport concessions, would entail.

Mr Staples said the agency would be taking the lead of the Independent Pricing and Regulatory Tribunal on fares, which is considering an overhaul of Opal ticketing for public transport.

“We’ll wait until the IPART work has been done,” he said.

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“It is a case of saying to government, if you’ve got financial pressures, and you’re seeking more revenue, here are options available to you to consider.”

Mr Staples said a large proportion of Transport’s workforce would retire or leave over the next decade but the fact it would retain present staffing numbers indicated that “we’ll have more service delivery” as the transport network expands. “We’ll have more assets to maintain but we’re trying to do that with a similar headcount and that delivers us savings,” he said.

In highlighting the financial pressures, the documents describe Transport’s central functions as “inefficient and duplicative”.

They also warn that “significant gains in customer satisfaction are plateauing” as a focus on specific modes, such as trains or buses, limits Transport’s ability to “meet shifting customer expectations”.

The challenges are underscored by forecasts that passenger trips on the rail network will surge by 21 per cent over the next three years.

Transport for NSW hired consultants from BCG several months ago to conduct a four-week review of a new model for the state’s lead transport agency and those that fall under its umbrella such as Sydney Trains and Roads and Maritime Services.

A reorganisation has since resulted in RMS losing its status as a standalone agency, and its functions and staff are being folded into new divisions of Transport for NSW.

The documents also identified about $1 billion in annual savings by 2028 from consolidating Transport’s buying power to achieve “better goods and services at lower costs”, and creating an integrated transport network by taking advantage of new modes, digital systems and data.

Matt O’Sullivan is the Transport Reporter for The Sydney Morning Herald.

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