Highlights

  • Transurban welcomed the finalisation of the Direct Deal covering proposed NSW toll reforms, subject to formal agreements and required approvals.
  • The reform framework includes proposed toll reductions across the M2, M7, Lane Cove Tunnel and Cross City Tunnel.
  • Two-way tolling is proposed for the Eastern Distributor at 53% of the current inbound toll.
  • The Government and relevant concessionaires have agreed to progress the proposed M7-M2 Widening Project.
  • Transurban’s Group traffic increased 3.8% in June 2026 compared with the prior corresponding period.
  • June traffic rose 2.5% in Sydney, 6.1% in Melbourne, 1.7% in Brisbane and 6.9% in North America.

Transurban Group (ASX:TCL) has welcomed the finalisation of the Direct Deal covering proposed toll reform in New South Wales, marking a significant stage in negotiations between the State Government and concession holders across Sydney’s toll road network. The framework includes proposed toll reductions on several major roads, changes to vehicle classifications, two-way tolling on the Eastern Distributor and further work on the proposed M7-M2 Widening Project.

Transurban shares were trading at AUD 14.74, down 0.47%, or AUD 0.07, during the afternoon session on 3 August 2026. Over the past year, the stock remained 6.73% higher, representing an increase of AUD 0.93. The company did not directly connect the share price movement with the latest announcement.

NSW Toll Reform Direct Deal Reaches Finalisation

The proposed NSW toll reform package follows an extended process involving the NSW Government and 10 concessionaires across 10 toll road Assets .

Transurban said the agreed framework was developed through a constructive and iterative process that considered the effect of proposed changes on motorists, traffic patterns and concession-level funding.

The implementation of the reforms remains subject to formal transaction documents, financier consents, regulatory clearances and other approvals. Final Government and concession-holder approvals, together with the execution of definitive agreements, are expected during the second half of 2026.

The broader package is intended to provide enduring benefits to motorists while preserving the value of existing concession arrangements.

Transurban also said the proposed framework is not expected to have a negative effect on its near-term distributions, although distribution guidance remains dependent on traffic performance, macroeconomic conditions and final Board approval.

Toll Reductions Proposed Across Key Sydney Roads

A central feature of the reform package is the proposed reduction of toll prices on several parts of the Sydney network.

The roads covered include the Hills M2, M7, Lane Cove Tunnel and Cross City Tunnel.

The adjustment to the M7 toll structure is conditional on the M7-M2 Widening Project proceeding. Meanwhile, the proposed Cross City Tunnel price change is linked to the opening of the Western Harbour Tunnel and the commencement of two-way tolling on the Eastern Distributor and Sydney Harbour crossings.

These changes are currently anticipated to occur in 2028.

The reform package is designed to adjust the way tolls are charged across the network while maintaining value neutrality for relevant concessionaires through a combination of payments, traffic impacts and project-related benefits.

Two-Way Tolling Planned for Eastern Distributor

The agreement includes a proposal to introduce two-way tolling on the Eastern Distributor.

Under the proposed framework, the toll charged in each direction would be set at 53% of the current inbound toll.

The change is intended to replace the existing one-way tolling arrangement and distribute toll charges more evenly between inbound and outbound motorists.

Two-way tolling is expected to begin in 2028, aligned with the anticipated opening of the Western Harbour Tunnel. Its implementation remains dependent on regulatory approvals and financier consents.

The reform process also includes the early monetisation of the Eastern Distributor Concession Notes, with payment anticipated in 2028.

M2 Promissory Notes Form Part of Funding Framework

The reform package incorporates the early monetisation of the Hills M2 Promissory Notes.

Payment of these notes is also expected in 2028.

The use of concession notes and promissory notes forms part of the broader financial structure intended to balance changes to toll pricing and traffic outcomes.

Transurban said equalisation payments would be made over time between the Government and the relevant concessionaires. These payments would reflect the net result of toll price adjustments, traffic changes and improved network flow associated with the proposed M7-M2 Widening.

The company did not disclose a single net payment figure in the announcement, noting that detailed pricing and equalisation arrangements were contained in an accompanying presentation.

M7-M2 Widening Project Moves Forward

As part of the reform outcome, the NSW Government and the concessionaires of the M7 and M2 motorways have agreed to progress the proposed M7-M2 Widening Project.

The project would expand sections of the motorway corridor from two lanes to three lanes between Richmond Road and Windsor Road.

The proposed works include widening the M7 between Richmond Road and the M2, as well as widening the M2 between the M7 interchange and Windsor Road.

Transurban said the project is expected to improve network performance, reduce congestion and support population and economic growth in Sydney’s north-west growth corridor.

The anticipated traffic and network benefits from the widening have already been incorporated into the value-neutrality calculations for the relevant concessions.

However, the project remains subject to formal agreements, planning approvals, financier consents, regulatory clearances, the final Direct Deal outcome and a Government Investment decision.

Reforms Extend Beyond Toll Price Changes

The proposed reform package includes several operational and administrative changes in addition to toll reductions.

A new motorcycle vehicle class is expected to be introduced, while truck toll multipliers would be standardised across the network.

The reforms also include plans to digitise toll notices and change enforcement processes.

Toll notice administration fees are proposed to be removed, reducing an additional cost currently associated with unpaid or delayed toll notices.

These measures are intended to simplify the tolling system and provide greater consistency for different vehicle categories.

The package therefore covers not only the amount motorists pay but also the broader administration and enforcement of toll charges.

Transurban Points to Customer-Focused Outcomes

Transurban Chief Executive Officer Michelle Jablko said the finalisation of key terms showed what could be achieved by prioritising motorists and customers.

She said the proposed changes were designed to deliver sustainable and customer-focused outcomes for Sydney’s road users.

The company described the reform package as being based on recommendations and principles developed through the NSW Government’s independent toll review.

Transurban also said the framework could support future investment and innovation across the transport network.

The company views the reform outcome as providing a basis for a more integrated and reliable motorway system in New South Wales over the longer term.

Group Traffic Rises 3.8% in June

Alongside the toll reform announcement, Transurban released an update on average daily traffic across its major operating markets.

Group traffic increased 3.8% in June 2026 compared with the prior corresponding period.

When the West Gate Tunnel was excluded, Group traffic increased 2.4%.

The June result represented an improvement from May, when total Group traffic increased only 0.1%. Excluding the West Gate Tunnel, traffic had declined 1.3% in May.

Transurban said preliminary traffic data for July was broadly consistent with the June outcome, although the July numbers had not yet been finalised.

Full traffic details are expected to be released with the company’s FY2026 result on 13 August 2026.

Sydney Traffic Benefits from Reduced Construction Disruption

Sydney average daily traffic increased 2.5% in June compared with the previous corresponding period.

The improvement followed relatively limited growth earlier in the year, including increases of 0.6% in January, 0.4% in February and 0.7% in March.

Sydney traffic declined 1.3% in April before increasing 0.1% in May.

Transurban attributed the stronger June outcome partly to an easing of construction-related disruption associated with the M7-M12 Integration Project.

The company also noted the continued return of motorists following completion of project works.

Large-vehicle traffic across the Sydney portfolio increased 5.5% in June.

Melbourne Traffic Supported by West Gate Tunnel

Melbourne recorded the highest June traffic growth among Transurban’s Australian markets.

Average daily traffic increased 6.1% compared with the prior corresponding period.

The result was supported by traffic from the West Gate Tunnel and improved performance across the broader Melbourne road network.

Excluding the West Gate Tunnel, Melbourne traffic increased 1.5%.

Transurban noted that the ramp-up profile for the West Gate Tunnel had remained broadly flat since February 2026.

Earlier monthly results showed Melbourne traffic growth of 5.7% in January, 4.7% in February, 1.4% in March, 1.6% in April and 1.7% in May.

When the West Gate Tunnel was excluded, Melbourne traffic fell 2.9% in March, 2.8% in April and 2.7% in May before returning to growth in June.

Large-vehicle traffic in Melbourne increased 18.5% in June, or 5.4% when the West Gate Tunnel was excluded.

Brisbane Traffic Recovers After Weather Disruption

Brisbane traffic increased 1.7% in June.

The result followed a 3.2% decline in May, which Transurban attributed to weather-related disruption.

While June represented a recovery, the company said Brisbane’s traffic growth remained below longer-term averages.

Monthly growth had been 1.3% in January, 1.1% in February and 13.6% in March before moderating to 0.7% in April.

The unusually high March figure reflected a favourable comparison with the prior corresponding period.

Large-vehicle traffic across the Brisbane portfolio increased 5.9% in June.

North American Express Lanes Maintain Growth

Traffic across Transurban’s North American operations increased 6.9% in June.

The company attributed the result to continued Demand for reliable travel Options across its Express Lanes network.

North American traffic had also recorded comparatively favourable growth during earlier months, rising 4.1% in January, 10.9% in February, 8.4% in March, 6.2% in April and 2.0% in May.

Dynamic toll pricing also increased during June.

The average dynamic toll price on the 95 Express Lanes rose 18.9%, while the corresponding price on the 495 Express Lanes increased 36.1%.

Dynamic toll prices vary depending on traffic conditions and demand, with higher pricing typically applied during periods of increased congestion.

Large-Vehicle Traffic Shows Higher June Growth

Large-vehicle traffic across Transurban’s Australian portfolio increased 11.8% in June.

When the West Gate Tunnel was excluded, large-vehicle growth was 5.6%.

The result followed lower large-vehicle traffic growth in May and reflected improvements across Sydney, Melbourne and Brisbane.

Large vehicles can represent an important traffic category because commercial users may have different toll rates and travel patterns compared with passenger vehicles.

The June increase therefore contributed to the broader improvement in network traffic during the month.

Macroeconomic Conditions Remain a Watchpoint

Although traffic results improved in June and preliminary July data remained broadly consistent, Transurban said the wider macroeconomic environment continued to require attention.

The company highlighted renewed conflict in energy-producing regions as one of the current geopolitical risks.

Transurban said the duration and scale of any impact would depend on geopolitical developments, Government policy decisions and the broader economic response.

Potential changes in energy prices, Inflation , consumer activity and commercial transport demand could influence traffic outcomes.

The company said it would continue monitoring these conditions while maintaining a focus on operational performance and Balance Sheet discipline.

Inflation-Linked Revenue Supports Portfolio Resilience

Transurban said the resilience of its portfolio is supported by the essential nature of its urban transport assets.

More than 90% of Group revenue is linked to the Consumer Price Index or subject to fixed annual escalators.

The effect of inflation on revenue generally flows through over a period of up to 18 months.

This structure means toll prices across much of the portfolio adjust according to contractual escalation mechanisms rather than relying solely on short-term traffic growth.

Transurban said it continues to manage the current geopolitical and macroeconomic environment through disciplined balance sheet management, operational focus and continued investment in customer outcomes.

What Comes Next for Transurban?

The immediate focus will be on converting the NSW toll reform Direct Deal into formal agreements.

The parties must complete definitive documentation and satisfy a range of conditions, including financier consents and regulatory approvals.

Final approvals and execution are expected in the second half of 2026.

Attention will also remain on the proposed M7-M2 Widening Project, including planning approvals and the NSW Government’s investment decision.

From an operational perspective, Transurban is scheduled to release its FY2026 results on 13 August 2026. That update is expected to include final July traffic data and further details on financial performance, distributions and the operating outlook.

The company held a market briefing with its Chief Executive Officer and Chief Financial Officer on 3 August 2026 to provide further information on the reform framework.

Conclusion

Transurban’s latest update marks an important step in the proposed reform of Sydney’s toll road network.

The Direct Deal includes proposed toll reductions across several major roads, two-way tolling on the Eastern Distributor, revised vehicle classifications, toll notice reform and a framework for progressing the M7-M2 Widening Project.

The package is intended to deliver benefits for motorists while preserving the value of existing concession contracts. Transurban also stated that the proposed changes are not expected to negatively affect near-term distributions, subject to traffic and broader economic conditions.

Separately, Group traffic increased 3.8% in June, or 2.4% when the West Gate Tunnel was excluded. Growth was recorded across Sydney, Melbourne, Brisbane and North America, while large-vehicle traffic across the Australian portfolio increased 11.8%.

Implementation of the toll reform package remains conditional on formal agreements, approvals and consents. The company’s forthcoming FY2026 result on 13 August 2026 will provide the next detailed update on traffic, financial performance and distributions.