Austroads has published a report that examines the application of community service obligations (CSOs) to the roads sector and provides an overview of the potential options which could be utilised in the development of a Community Service Obligations framework.
In the report, a road is defined as being subject to a CSO when government obliges a public or private road infrastructure service provider to provide a minimum level of service, associated with specific government policy objectives, that it would not otherwise provide on a commercial basis.
Road service levels have evolved over time in response to a variety of factors, including explicit and implicit policy objectives and social benefit–cost analysis. While most state governments are able to articulate base levels of service in the Heavy Vehicle Road Reform (HVRR) framework, that is not the case for the small number of local governments that we consulted for this report.
The preferred method proposed to estimate a net CSO cost is via a net avoidable cost approach based on the additional or incremental costs and revenues associated with the requirement to achieve a higher level of service than would be provided commercially. A key implementation issue is the level of disaggregation of road categories for estimating profits and losses. Two potential options are to estimate profits/losses for each road or road segment or to base the estimate on road-use data and expenditures/ costs for defined road categories.
CSO arrangements will require establishing new institutional and governance frameworks.
On Thursday 29 June 2017 Austroads will hold a webinar providing an overview of how CSOs could be applied to the roads sector and how establishing a CSO framework could help clarify road funding arrangements. There is no charge but registration is essential. Register now.