Item 11.1 - Attachment 1

Detail Report - Review of the M4 Toll





The NSW State Government started constructing the M4 motorway in the 1970s.  In 1989, Statewide Roads Limited was awarded the contract to build the last 10km between Mays Hills and Prospect, upgrade existing sections and operate and manage the M4.  The M4 became a toll road in 1992 with the Cashback scheme introduced in 1997.  The M4 passes to RTA control in February 2010.



Road tolls are a form of road pricing of which there are two types.  The first type is revenue generation which is generally used to fund new infrastructure, and to some degree maintenance.  The second type is demand management to control the use of road space to reduce congestion or green house gas emissions.


The tolls in Sydney, when considered separately are of the revenue generation type as they have funded new road infrastructure.  The exception is the Harbour Bridge toll which is used to fund maintenance since the cost of the bridge has been repaid.


When the tolls in Sydney are considered together they act as demand management road pricing tool.  For example, a return trip from the Hills to Sydney airport using the M2, Lane Cove Tunnel, Harbour Tunnel and the Eastern Distributor costs over $25 in tolls.  Motorists in Sydney consider their route based on the tolls applicable and therefore they act as a demand management tool as well.


Other types of demand management road pricing include road tax, fuel tax, congestion charging and parking charges.  The revenue from these schemes is often used for general revenue which can include new road infrastructure and maintenance.  However, the revenue is often hypothecated to fund public transport or road improvements to make the fee more publicly acceptable.



Sydney has had toll roads since the earlier days of the colony with one of the first being the Parramatta Road linking Sydney and Parramatta.


Sydney has 9 road toll schemes which are used to fund new road infrastructure, these are detailed in Table 1 below.  The cost of the Harbour Bridge has been repaid and the toll is now used to fund maintenance.  The other 8 road schemes are owned and operated by the private sector.  The ownership of the roads pass to the Roads & Traffic Authority (RTA) after a period of time to allow for the cost of the new road to be repaid.  The M4 Motorway is scheduled to pass to RTA ownership in 2010.  It is unclear whether the toll will remain in place as on the Harbour Bridge.


There are two classes of toll, Class2 applies to cars and motorcycles and Class4 to trucks.  This report considers the toll applicable for cars for simplicity.  Table 1 also shows the toll per km which varies greatly across Sydney.  This is due to the varying cost of the individual road schemes however publicly this is highly inequitable.


1.   Recommend that the RTA consider a Sydney-wide toll system that is equitable.

Table 1 – Existing Road Tolls in Sydney



Passes to RTA ownership





Actual Toll per km ($)

Theoretical Toll per km


























Harbour Bridge






Harbour Tunnel






Lane Cove Tunnel






Eastern Distributor






Cross city tunnel








* The M4 toll only applies between Silverwater Road and James Ruse Drive (2.5km) and the M5 toll only between Heathcote Road and Belmore Road (10km).

** The M7 toll is $0.33/km and capped at $6.57 so the actual toll is $0.16/km

*** The toll applies to southbound journeys only and theoretical toll assumes two-way trips




Removing the M4 toll after 2010, when the RTA takes ownership, will increase traffic congestion on the M4 and the surrounding roads including Parramatta Road Granville.  The toll is a valuable source of revenue for maintenance of the road in the same way the Sydney Harbour bridge toll is used.  It is also an effective demand management tool to control traffic flow on the M4 and surrounding roads by pricing its use competitively with public transport fares to encourage it as an alternative more sustainable form of transport.  Note this report discusses the principle of a toll on the M4 and it’s application, it does not consider the level of the toll.


2.   Recommend that the RTA retain the M4 toll as demand management tool.



During the 1995 NSW State Election, Bob Carr MP pledged to scrap the toll on the M4 and M5.  However, this was not feasible due to existing contractual agreements with the motorway operators and as a result the Cashback scheme was introduced.  The Cashback, which the RTA introduced in January 1997 offers motorists who use electronic tolling for private trips on the M4 and M5, a refund of the toll excluding GST.  On the M4 this reduces the toll for cars, from $2.75 to 27c.  Motorists need to submit a claim every quarter to receive the refund.


According to the RTA 2007 Annual Report there were approximately 238,000 Cashback customers in 2006/07 that made 695,000 claims for both the M4 and M5.  For 2007/08 the cost of the Cashback scheme was $97m and for 2008/09 the budget is $102m.  It is difficult to establish the value of the Cashback scheme attributed to the M4, however, in crude terms it could be as much as $50m per annum.  It is estimated that by the end of 2008/09 the scheme will have costed over $750m since it was introduced and likely to exceed $1b by 2010.


The continued operation of the Cashback scheme raises several issues.  Firstly, there is the lack of equality as it does not apply to other road toll schemes in Sydney, particularly the M2.  Secondly, it raises the appropriateness of State funds to subsidise (and support) private car use particularly when public transport provision in Western Sydney is frequently regarded as poor.  Lastly the scheme is against a key NSW State Government policy which seeks to increase the share of peak hour trips on public transport.


The future of the Cashback scheme after 2010 is unclear, however if the NSW State Government removes the M4 toll then the Cashback will not be applicable.


Withdrawing the Cashback scheme is likely to have a noticeable impact in the first few weeks as private motorists initially use alternative routes to avoid having to pay the full toll.  After a few weeks traffic flows on the M4 and surrounding road network are likely to reach equilibrium as with any significant road network changes.  It is predicted that in the long term there may a slight decrease in M4 use/increase in alternative routes. Car drivers who take advantage of the Cashback scheme pay the toll electronically and therefore to continue using the M4 after the Cashback scheme is withdrawn requires no change of travel behaviour.


The impact of withdrawing the M4 Cashback scheme in terms of funding could release up to $50m per annum which could be used to improve access to the M4 or public transport in Western Sydney.  It is estimated that 1 year’s Cashback savings ($50m) could fund:

·               50 new public buses including their operation for 1 year, or

·               15 new 4-carriage trains, or

·               new Rivercats for the Parramatta ferry service, or

·               RTA’s Strategic Bus Corridor program (bus priority) for 2 years, or

·               new access ramps to the M4 from James Ruse Drive, or

·               significant contribution for new access ramps to the M4 from Church Street, or

·               significant contribution to the West Metro project.


3.   Recommend that the Cashback scheme be withdrawn after 2010 and the budget reallocated to fund transport improvements in Western Sydney



There are two methods of toll payment, cash or electronic.  The cash payment option is available on most of Sydney’s toll roads and collected at the toll plazas, which are located either on the entry/exit ramps or on the road itself.


The electronic payment method uses an e-tag and e-pass.  An e-tag is an electronic smart card that is attached to the windscreen with the toll “collected” when the vehicle passes the toll collection point.  The e-pass is a virtual pass for infrequent users such as non-Sydney residents whereby the motorist registers their vehicle registration and payment details with a service provider prior to using a toll road.  The vehicle registration is recorded at the toll collection point and the user charged for usage.


The advantage of the electronic payment method is that it eliminates congestion at toll collection points by removing the need for vehicles to stop and pay, and reduces the cost of toll collection.  It can be introduced cost effectively using existing toll and sign infrastructure. The RTA has a policy of moving towards increased use of the electronic payment method to reduce traffic congestion.  The M7, Lane Cove Tunnel, Harbour Tunnel and Cross City Tunnel are electronic payment only.  The Harbour Bridge will be electronic payment only from January 2009; the M2 is due to follow once the upgrade is complete and the RTA is also reportedly in discussions with the Eastern Distributor’s operator as well.  This leaves the M4 and M5 with no firm plan to change to electronic payment collection only.  Melbourne’s toll roads have been electronic payment only since 2000. 


4.   Recommend that the M4 toll be electronic payment collection only to reduce traffic congestion and increase capacity



There are two ways in which the toll is applied in Sydney.  All tolls except for the M7 are flat fee which means that the user pays the toll for a specific section of road.  Table 1 above demonstrates the considerable disparately between the tolls when compared per km.  Note the actual toll and theoretical toll is the same except for the M4 and M5.  Motorists can use sections of either of these motorways without having to pay the toll even though the toll applies for the whole length of road.  On the M4 this results in toll avoidance between Silverwater and Granville impacting on the local roads adding to congestion.


The toll on the M7 motorway is applied according to the distance travelled (distance based toll), with the toll capped (currently after 19.5km of travel).  A distance based toll is considered by the public as a fairer method of tolling in the same way that bus and trains fares are based on distance.  Distance based tolling will require additional infrastructure but some existing toll and signage infrastructure could be utilise.


There appears to be a significant amount of traffic that diverts from the M4 to Parramatta Road and Victoria Road between Silverwater Road and James Ruse Drive which is partly due to motorists using alternative routes to avoid paying the toll.  Removing the toll will result in more traffic on the M4, Silverwater Road and James Ruse Drive as described above.


It is suggested that if the M4 toll was distance based and applied over a longer length than currently then motorists would be less likely to use alternative routes.  It is suggested that if the existing toll ($2.75) were applied as distance based toll ($0.20/km) between North Strathfield and the Cumberland Highway (a distance of 14km) then the traffic and cost of using Parramatta Road and Victoria Road between James Ruse Drive and Silverwater Road is less at $0.50.  There may be a decrease in short trips on the M4 and an increase on alternative parallel routes including the Great Western Highway between the Cumberland Highway and Church Street and Parramatta Road between Silverwater and North Strathfield.  These alternatives routes have more than sufficient capacity and the impact would be minimal in additional it would allow the M4 to preform the intended function which is an efficient way to travel longer distances between urban centres.


5.   Recommend that a distance based toll be introduced between the Cumberland Highway and North Strathfield as fairer method of tolling and to reduce toll avoidance



There is limited access to the M4 at both James Ruse Drive and Church Street which contributes to the congestion on these roads as well as Parramatta Road Granville and Victoria Road. 


At the James Ruse Drive and M4 intersection there is no access from:

·   the M4 westbound from James Ruse Drive southbound,

·   James Ruse Drive northbound to the M4 southbound.


At the Church Street (and Woodville Road) and M4 intersection there is no access from:

·   the M4 westbound to Church Street,

·   Church Street to the M4 eastbound.


The limited intersection access has implications for traffic to and from Parramatta city centre, the employment uses along Parramatta Road (Auburn and Granville), the regional arterial roads of Woodville Road (to the South and South West) and Cumberland Highway (to the North and North East).  The resulting effect is additional traffic on Parramatta Road through Granville that would otherwise be able to use the M4.


Both toll avoidance and the limited intersection access contribute to the traffic congestion on Parramatta Road in Granville. It is suggested that additional access ramps to the M4 are considered to reduce traffic on Parramatta Road.  Council adopted a submission to Infrastructure Australia at its meeting on 20 October 2008 seeking Federal Government funding to improved intersections on the proposed regional ring road which includes the M4 intersections with James Ruse Drive and Church Street.


6.   Recommend that additional access ramps to the be considered at James Ruse Drive and Church Street Parramatta.



It is not clear what the State Government or the RTA’s position is on the future of the M4 toll or the Cashback scheme when it passes to RTA control in February 2010.


There are several possible future scenarios that the RTA may consider and implement once it passes to their control and these are outlined in table 2.  Note these are Council suggested scenarios and have not been proposed, suggested or knowingly considered by the RTA or State Government.


The possible impacts of the scenarios presented below in Table 3 are initial predications by Council’s Transport Planning officers.  More detailed analysis such as traffic modelling would be required to test these possible outcomes.  The traffic impact of the scenarios will take several weeks to reach equilibrium as with any significant road network changes.

Item 11.1 - Attachment 1

Detail Report - Review of the M4 Toll


Table 2 Possible future RTA scenarios for the M4 after February 2010

Possible scenarios

1 Existing

2 Cashback withdrawn

3 No toll

4 Electronic payment with Cashback

5 Electronic payment without Cashback

6 Distance toll by electronic payment without Cashback















Payment method

Cash & electronic

Cash & electronic





Flat or distance based toll









Table 3 Possible impacts of the future M4 scenarios


1 Existing

2 Cashback withdrawn

3 No toll

4 Electronic payment with Cashback

5 Electronic payment without Cashback

6 Distance toll by electronic payment without Cashback

Traffic on the M4

·  No change

· Less traffic (congestion) over tolled section of M4

· More traffic (congestion) especially on previous tolled section

· Traffic flows improved through former toll plaza


· Traffic flows improved through former toll plaza

· Traffic flows improved through former toll plaza

· Traffic flows along M4 more balanced

Traffic on alternative parallel routes (Parramatta Rd & Victoria Rd)

·  No change

· More traffic (congestion)

· More traffic (congestion) on roads that directly feed to previously tolled section (James Ruse Drive & Silverwater Rd)

· Insignificant traffic changes

·    Possibly more traffic (congestion)

· Traffic flows along alternative routes more balanced with no toll avoidance through Granville


· Cost of providing Cashback scheme

· Toll revenue maintained


· Savings from Cashback scheme

· Toll revenue unchanged

· Savings from Cashback scheme

· No toll revenue

· Cost of proving Cashback scheme

· Potential increased toll revenue

· Savings by removing cash payment


· Savings from Cashback scheme

· Potential toll revenue decreased

· Savings from Cashback scheme

· Savings by removing cash payment

· Capital cost of implementing distance based tolls

Toll avoidance impacts

· No change

· Increased

· Removed

· No change

· Significant increase

· Significantly reduction

Item 11.1 - Attachment 1

Detail Report - Review of the M4 Toll


Below are concluding comments on the above scenarios.


Scenarios 1 & 2

Maintaining the toll beyond February 2010 could be controversial but maintaining the toll and withdrawing Cashback will be politically charged.  Continuing it will be very costly and against State Government policy.


Scenario 3

Discontinuing the toll will eliminate revenue that could be used to maintain the M4, but more importantly the cost (or barrier) to using the M4 is removed which will result in more traffic on the M4 and the roads that are connected to it.  It will encourage people to drive rather than use public transport with patronage on the Western Line likely to drop.  A similar impact occurred on the East Hills Line when the M5 opened.


Scenario 4 & 5

Moving to electronic toll payment only on the M4 will increase traffic capacity and reduce travel times.  Withdrawing the Cashback as well will be politically charged but continuing it is very costly and against State Government policy.


Scenario 6

Charging the M4 toll from flat fee to distance based allows the toll is spread along a length of road rather than at one at point which currently creates toll avoidance problems for Parramatta Road Granville.


It is difficult to recommend a scenario as there is limited public data relating to the toll and also the RTA and State Government have not publicly considered their options for the M4 after February 2010.  However scenario 6 is preferred with the toll retained as a distance based electronic payment only toll with the Cashback scheme withdrawn.



Any changes to the M4 toll needs to consider the proposed M4 East scheme which the RTA has planned for several years.  The M4 East is an extension of the M4 from North Strathfield to Haberfield/Leichhardt.  There are two basic options: a 3.6km tunnel to Haberfield or 6.7km tunnel to Leichhardt.  There is uncertainty whether the scheme, currently deferred will or should ever go ahead.  The concerns are related to:

·    the additional traffic generated along the M4 and M4 East corridor

·    the existing traffic congestion on the City West Link and ANZAC bridge to which the M4 East will contribute additional traffic

·    the possible cost of the M4 East toll which has been predicted to be $5

·    the failure of the last two road tunnel schemes: Cross City Tunnel and Lane Cove Tunnel which both have significantly lower traffic flows (and revenue) than predicted

·    the impact of the proposed West Metro which would significantly reduces the demand for the M4 East