What is the road occupation charge?
The Victorian Government introduced the road occupation charge on 20 July 2020 to be managed by the Department of Transport (DoT). The Road Occupation Charge is a major initiative to reduce traffic congestion in inner-city Melbourne by charging private parties a fee to occupy arterial roads for private use.
When and where will the road occupation charge apply?
The road occupation charge applies to road occupations occurring after 20 July 2020 on inner-city Melbourne arterial roads.
What is an arterial road?
An arterial road is a road in Victoria for which the Department of Transport is the coordinating road authority. These roads provide the principal routes for moving people and goods between major regions and population centres. Most other roads are either municipal roads, managed by local councils, or privately operated roads - for example, Eastlink and CityLink.
You can find out more about the types of roads and their responsible and coordinating authorities here.
Are private parties required to pay a charge for occupying a municipal road?
Councils may have an operating model or application process that could be applicable for private parties occupying a municipal road. We recommend that private parties contact the relevant council to discuss their proposed works that affect a municipal road.
Why has DoT introduced the road occupation charge?
When private parties occupy arterial roads, it often has a negative effect on Melbourne’s road network. It contributes to traffic congestion, reduces community access to amenities, adversely affects the reliability of public transport, and compromises the safety of pedestrians, cyclists, workers, and the community.
The road occupation charge creates a financial incentive to encourage private parties to occupy roads in a more efficient way, thus minimising disruption to traffic and the community.
Does the road occupation charge apply to the whole of Victoria?
The Road Occupation Charge applies to inner city arterial roads across 11 city councils in Melbourne. It will extend as far as Beaumaris in the south east, Balwyn North in the east, Glenroy in the north west and Kingsville in the west.
Below are the local council areas for which the road occupation charge currently applies:
- Bayside
- Boroondara
- Darebin
- Glen Eira
- Maribyrnong
- Melbourne
- Moonee Valley
- Moreland
- Port Phillip
- Stonnington
- Yarra
Other metropolitan and regional areas will be monitored to determine the need for congestion reduction using the road occupation charge.
What’s an example of a situation where the road occupation charge might apply?
There are a number of situations where the road occupation charge might apply.
- Example 1: A property developer needing to close off an arterial road lane during construction of an apartment building would incur the Road Occupation Charge.
- Example 2: A business needing to close an arterial road laneto change the content of an advertising sign located on private property would incur the Road Occupation Charge.
- Example 3: A demolition company needing to close a lane of traffic on an arterial road to safely demolish a building would incur the Road Occupation Charge.
These are only a few examples. There are many other circumstances in which the road occupation charge might apply.
Who pays the road occupation charge?
The charge applies to private parties occupying arterial roads.
What is a private party for the purpose of the road occupation charge?
A private party is a company, sole trader or individual that wants to occupy an arterial road for private benefit. In most cases, the private party is the works manager or the developer.
This does not include road occupations for municipal works or government infrastructure projects such as level crossing removal.
If the occupation goes over two councils (i.e. the border between two council areas is within the occupation zone), does the charge apply?
Yes, as long as the occupation affects an arterial road lane the charge will apply.
Who is exempt from paying the road occupation charge?
Members of the public temporarily occupying a road while moving house or conducting home renovations, such as crossover works, will not be subjected to the Road Occupation Charge. Emergency services, including utility providers or government projects are also exempt from this charge.
What does the road occupation charge cost?
The Road Occupation Charge ranges between $173 and $252 (excluding GST) per lane per day.
How is the road occupation charge calculated?
The road occupation charge is calculated based on several factors, including:
- The number of lanes being occupied
- The period of occupation
- The importance of the road and its traffic volume
- The value of the location to the community
In addition to what might be considered ‘standard’ vehicle lanes, the Road Occupation Charge also takes into consideration bicycle lanes and the area between a parking lane and road lane used by cyclists and motorcyclists.
Are there other charges associated with the road occupation charge?
Private parties may also be required to provide a bond of up to $10,000. The bond is a refundable security deposit, held as an incentive to ensure the roads are reinstated to their original condition should any damage occur from the occupation.
DoT will assess each occupation to determine the likelihood or risk of damage to the road surface and set a bond amount accordingly, up to a maximum of $10,000. In cases where the road occupation poses minimal risk of road damage (for example temporary bollards or signage being used for a short period of time) there will be no bond applicable.
Who pays the license fee and bond?
While the traffic management company will initially apply for the occupation on behalf of the private party, the road occupation charge and bond will be paid by the private party responsible for the occupation.
When will the paid bond be refunded?
Upon completion of the occupation of the road and provision to DoT of an outgoing condition report by the occupier, , the bond will be refunded within 14 business days. This timeline may be delayed if the outgoing condition report or complaints from public determine that a physical inspection is required and/or rectification works are required to return the road to its original condition.
Will a licence agreement be required for the road occupation charge?
A licence agreement must be entered into to undertake a road Occupation.
DoT has legislated power under the Road Management Act to issue a licence for parts of the road to private parties. This licence agreement will also stipulate the conditions for which the road occupation occurs under, including indemnifying DoT against any claims from the use of the arterial road.
Who is a party to the license?
The private party responsible for the occupation is the party to the license, which in most cases is the works manager or developer.
What are the two different types of licences used?
DoT has two standard templates to be used for Road Occupation matters.
Short Term Road Occupation Licence Agreement: Used for short-term occupations of road that usually pose minimal risk to damage of the road. In many cases, there will be no requirement for the payment of a bond. The Terms and Conditions of the agreement are publicly available on our website here [PDF 295 Kb].
Road Occupation Licence Agreement: For medium to long-term occupations of road that include permanent infrastructure that are not removed at the end of each day (bollards, site offices etc), or where substantial work to the surface of the road is required. In most of these cases, a bond will be required.
How can I ensure that my application is processed as quickly as possible?
While the MOA application is completed by a Traffic Management Company, the Road Occupation Licence application is completed by the instructing private party occupying the road.
If a traffic management company is submitting an MOA application that is likely to incur the road occupation charge, the applicant can provide the road occupation and private party details as part of the initial MOA application. This will ensure it is considered as soon as possible in the process. This table provides the details that are required for the licence application [DOCX 17Kb].
Who will issue invoices for the Road Occupation Charge?
DoT has instructed BGIS (Brookfield Global Integrated Services Pty Ltd) to issue invoices on behalf of DoT for all road occupation charges. When payment or proof of payment is received together with the signed licence agreement and condition report, DoT will finalise the licence to allow the occupation of the road to be approved.
What if the occupation is longer/shorter than anticipated?
The onus is on the applicant to accurately forecast the days required to occupy the road. Every effort must be made to minimise the disruption and occupation. As the MOA and associated charge is approved for a period of days of occupation, the applicant will not be entitled to a refund for any unused road occupation days.
Should the occupation extend past the original permitted occupation volume, further occupation charges will be incurred.
Are refunds granted if occupations do not occur?
If the applicant withdraws the MOA prior to its start date or the approval is withdrawn by DoT for transport requirements, a full refund of the road occupation fee will be made.
If a private party needs to make an application that will be affected by the road occupation charge, when should they submit it?
Applicants should allow five working days for a road occupation charge application to be processed. This is in addition to the 15 working days to process the MOA.
How will the road occupation charge be monitored?
DoT will undertake surveillance of road occupations to ensure compliance with the road occupation charge.
How do we know the road occupation charge will help reduce congestion?
A trial of the road occupation charge took place from 1 June 2018 to 31 December 2018 in Melbourne’s inner north and east.
During the trial, 26 road occupations were identified in the trial area. The application of the Road Occupation Charge during the trial resulted in a reduction of road occupation periods by an average of 75 percent.
The recommendation from the trial was to roll out Road Occupation Charges throughout inner-city Melbourne.
Are there similar schemes elsewhere around the world?
A similar model was introduced in June 2012 by Transport for London. The Transport for London lane rental scheme covers 5 percent of the Transport for London Road Network. It was a daily charge introduced to encourage behaviour change and minimise highway occupation.
Legal note: Head, Transport for Victoria’s power to charge for the occupation of arterial roads exists under Schedule 5 clause 9(1) of the Road Management Act 2004.