Why costs are rising for M2, M7 and other motorways despite government review

Motorists will pay higher tolls on Sydney motorways in 10 days’ time as the NSW government is poised to miss a crucial target for a shake-up of roads pricing.

Even though the Minns government has negotiated with toll road giants for the past two years, charges for seven privately run motorways – including the M2 and M7 – will rise on July 1, taking the increase over the past year to more than 4 per cent.

The government is silent on whether one-way tolls on the state-owned and operated Sydney Harbour Bridge and Harbour Tunnel will also rise shortly.

It maintains that it will meet a timeline for scrapping $10 to $20 administration charges on toll notices from “mid-2026” but has declined to provide a date for when that measure will take effect.

Confidential documents show that senior government officials had planned to “go live” on the first phase of a shake-up to toll road pricing on July 1, under a scheme code-named “Project Charlotte”.

The documents indicated that the M7, Lane Cove, Cross City and NorthConnex tunnels were to be among “phase one” of a deal with toll road giant Transurban.

An agenda for a meeting late last year between negotiators for the government and Transurban had also listed “M2 price change by 1 July 2026” as a discussion item.

Coalition transport spokeswoman Natalie Ward said the government’s transport policy was to miss every deadline it set itself.

“Three years of a toll review and there is still no detail to the public,” she said. “If the current negotiation is such a good deal for motorists, why is it such a secret?”

Transport Minister John Graham sidestepped questions about the plans outlined in the confidential documents, citing the setting up of a toll ombudsman in January, shortly after making a toll cap of $60 a week permanent, as evidence that it had completed phase one of its reform “ahead of schedule”.

“We said administration fees on toll notices would be scrapped in mid-2026 and that remains the case,” Graham said. “The Liberals need to decide whether they even support a toll cap that is assisting western Sydney motorists.”

Labor campaigned heavily during the 2023 state election on the financial burden of Sydney’s patchwork of tollways, vowing to overhaul the network by undertaking a review.

A final report from a review led by former competition watchdog chairman Allan Fels was released in July 2024. Since then, the Minns government has been negotiating with Transurban, which controls 11 of Sydney’s 13 toll roads, about a shake-up of tolling.

That has yet to lead to any major changes, and instead tolls for the seven motorways operated by Transurban will rise next week, as quarterly increases under existing contracts.

Maximum charges for motorists using the M2 will increase to $10.64 – from $10.49 in April. Those for the M7 will rise to $10.50 from $10.36, the Eastern Distributor to $10.48 from $10.37 and NorthConnex to $10.64 from $10.49.

The quarterly hikes will take the toll increases since July last year to more than 4 per cent.

Graham would not say whether the government would raise tolls on the Harbour Bridge and Harbour Tunnel.

In July last year, tolls on southbound journeys on the bridge and tunnel rose by 3.22 per cent, only the second increase since 2009. Weekday peak charges increased to $4.41, from $4.27.

The government confirmed late last year that motorists will be charged two-way tolls on the Harbour Bridge and Harbour Tunnel from as early as 2028, when a third harbour crossing for vehicles is to open.

Revenue from the two-way tolls will be used to help fund the permanent $60-a-week cap on the city’s motorway charges.

The government-commissioned review by Fels also recommended two-way tolling on the Eastern Distributor.

The Eastern Distributor and WestConnex, which account for about 40 per cent of toll revenue in Sydney, did not appear to be part of phase one of the proposed deal mentioned by Transport and Treasury officials in confidential documents.

However, the documents showed that a second phase was slated to start from 2029, months after the $7.4 billion Western Harbour Tunnel between Rozelle and North Sydney is due to open.

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