Transurban – A Case for a Senate Inquiry

Secret Deals, Influenced Government, Over $1 Billion in Penalties, Neighbourhoods Destroyed, Environmental Impact, Tens of Thousands Affected and a Plan to Toll All Roads.

By Michael Fraser and Maddison Johnstone
The Scandal.com.au

Suicide is a word that appears all too often when speaking with toll road users.

Australian motorists have over $1 billion in outstanding toll penalties. Victorians alone owe $687 Million, which is 2.7 times that of road safety camera infringement (speed, red light and unregistered vehicles) offences combined.

When, in just over 12 months, our advocacy office received thousands of toll road complaints through our website and hundreds of calls, we knew there was a serious problem. Upset, angry and confused motorists from all walks of life were having problems with toll road operator Transurban.

After analysing the data, it was found that their complaints fit into a whopping 56 complaint categories, with the top three being: 1. Outrageous Fees & Fines, 2. Escalated to State Infringement, and 3. Faulty E-Tag.

In January 2016, our advocacy office also analysed complainant data from motorists using Transurban’s Queensland toll roads, which revealed that 24% claim they have penalty fees over $5,000, 14% claim they have penalty fees over $10,000, and 14% claim they have lost their licence as a result.

What is particularly concerning about these issues is that many of the fees and infringements came about due to system errors and lack of communication from Transurban, or innocent customer oversights that even the most diligent motorist can make.

They won’t admit they have mistakes in their system.Transurban Whistleblower

During numerous lengthy discussions with our Transurban whistleblower, he detailed a range of problems that appear to be systemic. When The Scandal asked the whistleblower if admitting to those problems would lead to huge legal action against Transurban, he replied “yes”.

Transurban began in Victoria

Transurban’s longest-serving government arrangement is Melbourne’s CityLink, where they entered a Public-Private Partnership (PPP) in 1995. The whole arrangement stirred public controversy with the government refusing to release information pertaining to public interest. Thus began Transurban’s venture into PPPs and secret deals.

With impressive government influence and a set of politically active employees, they have mastered political negotiations – which is most evident in their recent unsolicited bid for the Western Distributor, a hugely unpopular road proposal that is set to cost $5.5 billion. The negotiation was formulated as a ‘rescue package’ to save Premier Daniel Andrews, who backed out of the bungled East-West Link project after much public debate and community unrest.

Keep in mind that this is a private company that has already broken the CityLink Concession Deed on one occasion, costing their customers $1.3 million. Not only was Transurban not punished for breaking the concession deed, they were also not required to pay back the money that could be argued was stolen from their customers. To add insult to injury, the Victorian Government went from suggesting they return the overcharged fees, to ‘resolving’ the dispute by agreeing that the administration fee no longer had to be cost-based ($1.20) and that it should be set at a level which acts as a deterrent for road users who fail to carry their e-tags ($12.13).

Given Transurban’s long list of former government employees, The Scandal asked Premier Daniel Andrews, Treasurer Tim Pallas and Minister Luke Donnellan if Transurban had ever approached them with an offer to work for or advise Transurban once they left office. A government spokesperson responded with ‘No’. Only time will tell.

Sydney, New South Wales under attack from WestConnex

As Sydney’s congestion woes continue, the New South Wales Government’s WestConnex solution is a controversial issue. The WestConnex project is now under construction and will eventually connect up two of Sydney’s main motorways, the M4 in western Sydney and the M5 in south-western Sydney.

Many of those against the WestConnex project say it will not ease traffic congestion, and alarmingly, there are instances of the Baird Government breaking away from recommendations and strict environmental processes. As a result, the heritage and environmental consequences of the WestConnex project are very real, and neighbourhoods are being destroyed with forced home acquisitions.

The WestConnex Action Group campaign against the new project consists of pertinent questions and raises valid and viable concerns about process and due diligence. However, the Sydney Morning Herald recently reported that community groups were least likely to gain access to information through Right To Information.

SMH also reported that under the Baird Government, the Roads and Maritime Services (RMS) saw a doubling of the “secrecy” excuse to block public access to documents, applying it in 514 cases. It was also discovered that the private sector was less likely to receive a “secrecy” excuse to block their access to government documents, and were more likely than any other group to gain access.

And who in the private sector is in the running to operate WestConnex once it has been built? No doubt, one very interested party is Transurban. Infrastructure NSW was the body charged with delivering the WestConnex project. Shortly after the project was announced, then Chairman Nick Greiner stepped down and is currently a Transurban Adviser. Interestingly, Nick Greiner is also a former NSW Premier.

The Scandal asked Premier Baird, Treasurer Gladys Berejiklian and Minister Duncan Gay if they had approached or been approached by Transurban to discuss an offer to work for or advise their company. They did not respond.

Queenslanders are being ripped off

Since Transurban began operating in Brisbane, toll road customers have experienced poor practices, often being left hundreds or thousands of dollars out of pocket.

A Transurban whistleblower spoke to The Scandal about unethical practices and their questionable morals that involved the company gouging customers and cheating the Queensland Government.

The ‘Demerit Point’ system is part of Transurban’s Road Franchise Agreement with the Queensland Government. The system involves monetary penalties to be paid to the Queensland Government.

The whistleblower recalled a time when Transurban explained away the large number of complaints captured by the Manila call centre as technical errors, in a bid to escape financial penalty.

This would, of course, suggest a significant breach in their contractual agreement with the Queensland Government.

General Manager Queensland Wes Ballantine was asked about the allegations put forward by the whistleblower, but he did not respond.

And if you’ve ever wondered how Transurban can charge excessive administration fees ($23.46 per unpaid toll), the whistleblower alleged it is likely to be because they use a middleman company to issue toll invoices. In the case of go via, that middleman company is Salmat.

Toll Invoices just keep coming through, it’s fees on fees on fees. It’s unbelievable.Transurban Whistleblower

Indeed, the company best known for letterbox drops is involved in the printing and issuing of toll invoice fees.

Salmat Corporate Communications Senior Manager Shane McClelland was contacted for comment about Salmat’s involvement in the issuing of Transurban’s toll fees and notices. Mr McClelland did not respond.

The whistleblower conceded that Transurban’s fees were excessive.

“Toll Invoices just keep coming through, it’s fees on fees on fees. It’s unbelievable,” he said.

And it is not uncommon for a customer to receive tens or sometimes over one hundred invoices in one envelope, (like Troy Johnson – see video). Transurban staff will often say, we have an angry customer on the phone, they just got a “tree” in the mail.

When speaking of Brisbane City Council roads operated by go via, the whistleblower said a customer would always receive a Penalty Infringement Notice (PIN) if they do not pay a toll.

“They [Brisbane City Council] are meticulous and religious in setting a PIN, sending a PIN out to the customer,” he said.

However, this is not the case with Queensland Government roads. If five toll points are driven through, one PIN will be issued, but the other four may or may not be issued.

The whistleblower also said the Logan Motorway toll gantry by BP Larapinta was malfunctioning, and customers with personalised plates were overcharged. The whistleblower said that Transurban was aware of the issue but would not inform their customers, instead placing the responsibility on the customer to somehow know.

In the whistleblower’s words, Transurban “are a strange company, they don’t believe they’ve got problems.” Yet clearly they are aware of them.

Given the number of allegations made by the whistleblower we have decided to write a follow up piece at a later date.

Transurban’s plan to toll all roads

Transurban’s CEO Scott Charlton has superimposed himself into a debate, that he is perhaps the impetus for, about the Government’s need to move away from charging fuel excise, and instead toward a more ‘fair’ user-pay system.

How is it fair that an Uber driver doing 15 trips a day in an electric vehicle pays the same amount in registration as a pensioner who does 15 trips a year? And when it comes to their contribution to fuel excise the uber driver with an electric vehicle pays nothing at all.Scott Charlton

In June 2016, Mr Charlton spoke at The Australian Financial Review’s National Infrastructure Summit where he took a cheeky swing at Uber drivers in an attempt to validate his argument to move to a user-pay model.

“Fuel excise is rapidly diminishing as we move to fuel efficient and electric cars,” Mr Charlton said.

“How is it fair that an Uber driver doing 15 trips a day in an electric vehicle pays the same amount in registration as a pensioner who does 15 trips a year? And when it comes to their contribution to fuel excise the uber driver with an electric vehicle pays nothing at all.”

Mr Charlton makes a fair point as he strongly advocates for changes in Government policy, especially when there is potential for Transurban to increase its revenue stream. However, when questioned about reducing toll fees, his go-go-government advocate button stops working.

“We are just administering what the state governments set up,” Mr Charlton told the Sydney Morning Herald, demonstrating his apathy towards toll fee reductions.

With Transurban tolling less than 200 kilometres of the 800,000 plus kilometres of Australia’s national road network, it raises the question as to why Mr Charlton is taking every opportunity to lobby for a user-pay system. Is he just a good Samaritan?

Perhaps the answer lies in Transurban’s 2016 Investor Presentation under the heading ‘Strategy’ – “To be the partner of choice with governments providing effective and innovative urban road infrastructure utilising core capabilities”.

Presumably, a user-pay model will require a ‘partner of choice’ to administer the billing for a user-pay model, and when it comes time for the government to make such decisions, as if by serendipity Mr Charlton will be there to graciously accept a contract awarded to Transurban.

If we are to move to a user-pay model, this will be no small step, and just like all toll road projects, the cost and inconvenience of rubber stamping rushed policy and government incompetence will be passed on to the public with immense human cost.

When reading Transurban’s 9 March 2016 submission to the Standing Committee on Infrastructure, Transport and Cities, you will note that Transurban considers that they have more similarities with energy, telco, and water, than public goods, such as schools. Then, under the heading ‘A sustainable funding solution’, it talks about the “development of an appropriate operating model that sees government as the regulator and policy setter and the private sector as operator and owner, which is the structure of most of the utility industries.”

Transurban are already conducting a road usage study, trialling various user pay models including “a distance-based per-kilometre charge, price per trip or charge to access the road network, and a flat-rate cost based on expected road usage.”

They are using every opportunity to highlight the shortfall in road funding due to a number of factors, with a primary one being that hybrid and fully electric cars are not paying the fuel excise.

So it would be safe to say that the overall cost of driving will go up with a user-pay model to cover the significant shortfall in road funding.

It will be likely that Transurban will succeed in winning a contract in exchange for generous fees – that motorists will have to pay – to administer the billing for a user-pay model for not just their roads, but those of any other toll operator in Australia – that is if they haven’t bought them all out.

A Transurban user study in Melbourne was covered by The Age in May 2016, and if the greater detail in the user-pay plans is anything to go by, motorists are likely to end up with plans similar to those of the first phone plans that came with a crippling bill-shock if you exceeded your cap.

Why should this concern you? Well firstly, if you received a surprise $900 Telstra bill (when it is normally $100) because you exceeded your cap by one hour while talking to Nana – and you didn’t pay it – about the worst that could happen would be a suspension in services until paid.

In the case of Transurban, service suspension will be the least of your problems if you don’t pay on time. Their partner, being the various State governments, will write legislation which ensures that it is an offence not to pay, and each offence will attract over-the-top penalties that range from a $170 Penalty Infringement Notice (PIN), through to vehicle seizures and possibly even imprisonment.

Transurban currently only operate 13 toll roads in Australia, which covers less than 200 kilometres of road. Apart from the thousands of customers complaining to our advocacy office, there is currently over $1 billion – that’s B for Billion – in outstanding toll infringements owing in Australia. The large majority of those outstanding infringements were issued to motorists that traveled on Transurban toll roads.

With a long line of customers claiming they were penalised due to Transurban error, and a whistleblower indicating systemic problems, the thought of them tolling roads on a much larger scale is surely concerning.

If you were upset by having to supply your name in this year’s Census, then you won’t like this. Transurban propose that user-pay customers are tracked using a GPS tracker fitted to your vehicle. See slide 14 of their 2016 Investor Presentation.

In their trial the GPS trackers were located under the steering wheel. So how will this work in a real world environment? If they are tolling all roads it will be unlikely that they will install toll gantries everywhere. If this is the case, that means a motorist would be able to remove the device from their vehicle and drive around for free.

Transurban would have already considered this, so no doubt they will ask their State Government partners to write legislation making it compulsory to have a GPS tracker in your vehicle and an offence to remove the device.

That means Transurban will be tracking your every move, even when you are driving on a road that is not yet a user-pay road, or when your car is in the garage, and even when you sneak off late at night to purchase a yummy doughnut from an exploited 7-Eleven worker.

A Transurban whistleblower has alleged that Transurban have a secret deal with Salmat to issue toll notices in exchange for a generous fee that is passed on to the customer. Salmat are an Australian Securities Exchange (ASX) listed company and describe themselves as ‘a marketing services business’. The Scandal contacted Salmat for comment. They did not respond.

When you enter a toll road you automatically agree to their Terms and Conditions. In those terms, you will find that by using their services, you agree for them to share your information with [unnamed] third parties, the State, the courts and law enforcement.

You can bet your bottom dollar that all your tracked movements will be shared with companies such as Salmat – most likely sold – and the State and law enforcement will know all your movements. Sure you might not be doing anything wrong, but I am sure you can think of better people to share your information with than a profit hungry toll company.

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