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Delivering sustainability

Future Transport Strategy

Economic sustainability

Transport plays a significant role in building a strong economy and improving quality of life for our customers, communities and the people of NSW. It increases the productivity and global competitiveness of the NSW economy and makes a long-term, positive contribution to the social, environmental and cultural elements of our community. 

Economic activity generated from new transport projects creates economic and social value for local communities and businesses in urban and regional areas, through jobs, training and partnerships that promote social inclusion, reduce disadvantage, and enhance community health and social wellbeing, particularly for under-represented, vulnerable communities.


Circular economy

In line with the NSW Government’s Circular Economy Policy Statement 2019, Transport for NSW recognises the importance of adopting lifecycle assessment as a valuable decision-making tool in assessing the economic, environmental and social impacts of its activities as an agency, as well as impacts of new and upgraded Transport assets. Taking this whole-of-life approach requires us to consider future needs, challenges and opportunities, and to seek integration into design, planning, financing and governance decisions now, in the context of future decision making, risks and uncertainty.

Some of the initiatives Transport for NSW has undertaken include recycling all spoil from tunnelling as construction material for Sydney Metro North West, and using recycled glass in the concrete mix for the Woolgoolga to Ballina upgrade and other infrastructure projects.

Future directions to investigate:

  • Undertake further technical investigation into the use of more recycled materials in construction and infrastructure projects. 
  • Plan for guidelines to promote the use of recycled materials in construction and infrastructure projects for Transport for NSW.
  • Enhance links to circular economy objectives in procurement of goods, services and construction activities.
  • Investigate how Transport can further contribute to the objectives of the NSW Government’s Circular Economy Policy Statement 2019.


Moving towards financial sustainability

The NSW Government is investing more than ever in infrastructure programs, committing to a record spend to deliver road and public transport projects over the next four years. While this investment means we can deliver better services and increase customer satisfaction, it also leads to higher whole-of-life costs to operate and maintain the Transport network.

Delivering a modern transport system that improves services, is affordable for both customers and taxpayers, can respond to technological disruption, and meet the challenges of a complex and aging network, requires greater financial sustainability. 

To achieve this we need to factor critical whole-of-life considerations into all our decisions. This includes: the balance of investment and cost recovery; access, affordability and equity; better land use outcomes; and reduced impact on the environment. Delivering sustained improvements for customers also requires a strong focus on operational efficiencies and identifying new revenue sources. We will also evaluate and prioritise initiatives that are for the greater good of our customers and communities.


Transport’s Financial Sustainability Program

Financial sustainability is a key part of Transport’s priorities, seeking to transform our business to deliver for customers now and in the future. This will be achieved through a culture of striving to get the best value possible from taxpayers’ dollars and ensuring our investments are prioritised to services, infrastructure and technology that will sustainably deliver for our customers and the broader community. Over the past decade, Transport has achieved significant savings from various initiatives – a significant achievement and a strong foundation for future reform. 

Transport is committed to undertaking ongoing reform to pursue opportunities that leverage our assets and new technologies to deliver better cost recovery. 

Transport is continuing to improve customer outcomes, through better use of its resources. This is supported through building employee skills and capabilities, setting up a transformation hub to drive reforms, planning responses to emerging trends, such as increased automation and digitalisation, and pursuing its ‘people at the heart’ organisational strategy.

The cost to the community is growing

Over the past few years, the level of new investment in projects across Transport has increased significantly, to fund network enhancements to improve services for our customers.

The scale of investment to expand and enhance the network means that whole-of-life lifecycle costs are rising at almost double the rate of transport revenues.

Transport’s operational expenses are projected to be the third largest component of the growth in the NSW Government’s expenditure for services. Even with efficiency initiatives, which have already reduced annual operating costs, the gap between costs and revenues continues to grow. 

COVID-19 restrictions have impacted patronage and passenger revenue, putting further pressure on the State to subsidise travel while maintaining service levels. There will be a significant shift in the way offices operate in future, with more people encouraged to work from home and adopt flexible working locations, which may impact  farebox revenue in future years.

To maintain current levels of transport investment and reduce the gap between costs and revenues, we will need to make greater efficiency savings and identify new revenue sources.

Across the Transport network, overall cost recovery is reducing. In the absence of intervention, cost recovery is forecast to reduce further resulting in additional taxpayer funding to support the provision of transport services.

Existing sources of revenue from roads may be impacted in the future, with the introduction of new technologies. Improvements in automated, electric and hybrid vehicle technology and a move to ridesharing may encourage customers away from public transport services and reduce revenues from driver licences, vehicle registrations, fees and stamp duty.

A growing financial burden on the NSW taxpayer means the transport system will need to be funded in a more efficient, sustainable and equitable way, to ensure our investments provide value for money and deliver customer and community outcomes. This includes exploring alternative sources of revenue and approaches to service delivery, such as Public Private Partnerships, as part of a sustainable funding model.

Pursuing new sources of revenue

To maintain current levels of transport investment and reduce the gap between costs and revenues we will need to make additional savings and identify new revenue sources.

Globally, transport authorities are seeking to leverage their diverse and unique assets for opportunities to supplement fare revenues. Cities like Hong Kong and Tokyo are leading the way, with over 100 per cent cost recovery.

Transport for NSW is working to grow revenue from third-party sources, such as advertising on Transport assets, retail leasing and customised number plates. These activities provide a useful supplement that can offset operating costs, and they will increasingly be applied across the transport portfolio.

In focus:

Development contributions

Ensuring new growth makes a contribution to infrastructure is a key concept of the planning system in NSW. The development contributions framework under the planning legislation recognises different types of contribution mechanisms for infrastructure, including Special Infrastructure Contributions (SICs) and Voluntary Planning Agreements (VPAs), which operate under the Environmental Planning and Assessment Act 1979.

Considering the opportunities for development contributions related to some of the initiatives and planning decisions outlined in Future Transport 2056 has the potential to deliver the following benefits:

  • Unlocking new funding and financing options to make economically beneficial infrastructure more affordable.
  • Spreading the costs of new infrastructure more equitably among its beneficiaries.
  • Providing the opportunity to secure funding that contributes to the protection of long-term major infrastructure corridors.


A continued focus on spending efficiency

We are constantly improving the network for our customers, with public transport capital investment growing at 13 per cent each year on average since 2012. Operational and maintenance costs are continuing to grow as the Transport network expands and becomes safer and more efficient. 

We are continuing to drive efficiencies across the cluster when it comes to operating practices. However, service levels are increasing and new assets are being delivered, such as Sydney Metro City & South West and Parramatta Light Rail.

It is important that Transport seeks to embed best-practice, and cost- and energy-efficient design principles across all stages of the asset lifecycle and continues to identify opportunities for energy reductions in line with the NSW Government Resource Efficiency Policy. Fuel is a significant portion of the cost of operating transport services. This means we will have to continue evaluating the fleet – seeking alternatives that are more environmentally and financially sustainable.


Future directions to investigate

  • Identify opportunities for development contributions related to some of the initiatives and planning decisions outlined in Future Transport 2056 Services and Infrastructure Plans.
  • Investigate road network access charges for commercial users, with revenue reserved for related network improvements.
  • Identify supplementary sources of revenue across the portfolio, including commercial revenues through internal advertising, commercial leasing and airspace use, particularly at new interchanges.
  • Identify areas for commercialising intellectual property within the cluster to help offset operating costs.
  • Explore opportunities to leverage data and analytics to drive improvements in network and asset performance and potentially provide new revenue sources.
  • Optimise capital investment and upgrading practices to reduce whole-of-life costs.

Six principles for Future Transport

The Future Transport 2056 Strategy is focused on six key principles for the future of mobility in the state, which together aim to positively impact the economy, communities and environment of NSW.

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