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Financing / investing in energy / infrastructure

To what extent are energy and infrastructure assets publicly or privately owned?

Australia

Australia

Generally

The ownership of energy and infrastructure assets in Australia varies according to the asset class. The main asset classes are usually considered to be:

  • social infrastructure assets including:
    • health (hospitals and medical centers);
    • education (schools, childcare and universities);
    • social accommodation (social housing and retirement villages); and
    • community (court houses, fire stations and prisons); and
  • economic infrastructure assets, including:
    • regulated utilities such as water companies;
    • transport assets such as roads and airports; and
    • telecommunication assets such as mobile phone towers.

Key sectors are considered below.

Energy

The gas and electricity industries in Australia are regulated by the states and territories.

Electricity

There is a mix of both government-owned and privately owned electricity distribution and retail businesses in Australia, with a trend towards privately owned utilities in all states and territories.

The majority of states and territories have combined to form an interconnected National Electricity Market (NEM), being Queensland (QLD), New South Wales (NSW), the Australian Capital Territory (ACT), Victoria (VIC), South Australia (SA) and Tasmania (TAS). The NEM is a wholesale electricity market for the supply and purchase of electricity across those interconnected states and territories and it is currently under construction with anticipated completion in 2021. Western Australia (WA) and the Northern Territory (NT) do not participate in the NEM and have their own major networks. The Australian Energy Market Operator (AEMO), an independent corporate body established by the Australian government, administers and operates the NEM.

There is only one major electricity transmission and distribution network in each of the ACT, SA and TAS. While there are multiple networks in QLD, NSW and VIC, each is a monopoly provider in a particular area. For example, Ausgrid, Endeavour Energy and Essential Energy operate monopolies in NSW. The distribution and transmission sectors are not generally integrated, although there is some common ownership in the distribution and retailing sectors in TAS and the ACT.

Gas

AEMO operates the wholesale and retail gas markets of eastern and southern Australia and oversees the gas transmission network in VIC.

In addition, AEMO is responsible for national transmission planning and the operation of the Short-Term Trading Market (STTM) for gas. The STTM is a market-based wholesale gas balancing mechanism that has been established at defined gas hubs in NSW, QLD and SA. The STTM facilitates the short-term trading of gas between pipeline owners/operators, shippers and gas producers. VIC does not participate in the STTM, and has established its own wholesale gas market which producers, transporters, retailers and end users all engage in.

Telecoms infrastructure

The telecommunications networks (fixed and mobile) in Australia are predominantly privately owned by a number of service providers.

Telstra, a wholly privatized company offering a full range of telecom services, is Australia’s largest telecommunications provider and dominates ownership of the fixed-line network. Control of the wireless telecommunications sector is predominantly shared between three privately owned service providers, Telstra, Optus and Vodafone.

The Commonwealth Government is currently investing in fiber-optic, fixed wireless and satellite infrastructure to develop, construct and deliver Australia's first national wholesale only, open access broadband network (the National Broadband Network, or NBN) through a government-owned entity which is classed as a government business enterprise, NBN Co Limited. The new infrastructure will replace the existing broadband infrastructure, aiming to create quicker and more consistent broadband service and provide opportunities for development of improved asset management systems. The regulatory framework for the NBN provides that the Australian Government will retain full ownership of NBN Co until the national broadband network rollout is complete, which is anticipated to be in 2021.

Transport infrastructure

Public transport networks in Australia are predominantly government-owned and operated, across the three levels of government – federal, state and local, with certain exceptions where networks have been franchised, privatized or governments have entered into public-private partnerships.

Rail

Typically, the infrastructure and assets for rail networks in Australia are owned by state governments or the federal government. The operation of trains in Australia is commonly franchised by the government and outsourced to the private sector. The passenger networks in each state and territory are typically owned by government entities. The railway infrastructure in QLD, TAS, VIC (for non-interstate lines), SA (for non-interstate lines) and the NT are integrated. The mainland interstate track is, for all states and territories except the NT and TAS, owned, leased, maintained and controlled by a federal government owned corporation (the Australian Rail Track Corporation), however, the interstate freight operations in Australia are wholly commercial, being privately owned and operated.

Roads, bridges and tunnels

The operation, maintenance and improvement of roads in Australia is largely the responsibility of local governments, with the exception of the arterial road network and most local roads in unincorporated areas which are the responsibility of the state and territory governments. The federal government also shares responsibility with the states and territories for a defined national network of road transport corridors and rail-road inter-modal connections. The delivery, operation and maintenance of such infrastructure is often outsourced to the private sector. For example, management of toll-roads (including the design, build, financing, operation, maintenance and collection of tolls) is typically outsourced to the private sector on a full concession basis, with the states and territories holding the perpetual lease over toll road land.

Aviation

Aviation infrastructure in Australia is typically government-owned. All federal airports are located on government-owned land and are under long-term leases to private entities. There are significant restrictions on ownership of airport-operating companies under the Airports Act 1996 (Cth), including a 49% limit on foreign ownership, a 5% limit on airline ownership and a 15% limit on cross-ownership between paired airport operator companies. The majority of all other Australian airports are owned and operated by local government authorities, with a small number operated by the private sector on the government's behalf, or both owned and operated by the private sector for public use. The aviation regulator in Australia is the Civil Aviation Safety Authority (CASA). The government has influenced market structures to combat competition issues, for instance prohibiting the cross-ownership of airports.

Maritime and ports

The ports in Australia are typically owned by the state and territory governments, however, the operation of, and investment in ports is largely privatized, with port assets typically privatized on a long-term lease basis.

Infrastructure Australia, a government body, oversees rail, road, airports and other infrastructure at a national level.

Other infrastructure

Water

State and local governments are typically responsible for the ownership of infrastructure and delivery of water services in Australia, generally through government-owned companies. The operation and management of water in SA has been privatized, and local utilities in VIC have been largely privatized. Water utilities are regulated across the states and territories by the relevant State authorities.

Defense

Typically, defense assets are owned by the public sector.

Education

The education sector in Australia consists of both public and private institutions. Governance and management of education is split between the three levels of government. For instance, the majority of universities operate under State and territory laws and regulations, while early child education facilities operate under the guise of local governments. The Australian Government's Department of Education has the primary responsibility of distributing funding and developing policy in regards to childhood education, higher education, vocational education and training, international education and research.

Waste

The waste management systems in Australia are the responsibility of state, territory and local governments. The sector is a mix of both public and private operations. The Australian Government is responsible for waste management policy. The private and public sector are involved in all forms of the waste management process.

Last modified 3 Dec 2019

Austria

Austria

Generally

The ownership of energy and infrastructure assets in Austria can be divided into:

  • economic infrastructure (energy, aviation, rail, telecommunications, water, roads and waste); and
  • social infrastructure (education, health and justice/prisons).

Energy

Austria is one of the foremost producers of hydroelectric power in Europe. The most important power facilities are publicly owned; 50% of the shares of the large private producers are owned by provincial governments.

The Austrian upstream sector is dominated by two companies, OMV, a partly federal-state-owned company, responsible for approximately 15% of crude oil and natural gas liquids produced, and Rohöl Aufsuchungs AG (RAG), a privately owned company responsible for about 15% of crude oil and natural gas liquids production. OMV is the operator of Austria's only refinery in Schwechat. RAG focuses on drilling technology and large-scale gas storage, boasting 70% of the Austrian annual gas demand.

Currently, the Austrian Federal State, namely the Austrian Industry Holding AG has a stake of 31.5% in OMV.

The existing Austrian transit pipelines are (at least partly) owned and operated by GCA, a subsidiary of OMV (51%) and a consortium consisting of Allianz and Snam S.p.A. (49%).

Telecoms infrastructure

The Austrian mobile phone market is characterized by a high share of mobile broadband, paired with an average take-up of fixed broadband. The telecommunications networks (fixed and mobile) are privately owned by a number of service providers. Austria has a highly developed and efficient telephone network and a number of radio and television broadcast stations. There are three nationwide GSM networks which also support additional brands and mobile virtual network operators (MVNOs).

Transport infrastructure

Light rail

Typically, light rail assets (such as trams, buses and metros) are owned by local public sector promoting bodies.

Wiener Linien runs the largest part of the public transit network in the city of Vienna.

Heavy rail

The rail market in Austria is privatized, however, shares are held by both public and private entities.

Österreichische Bundesbahnen (ÖBB) is the national railway system of Austria and the administrator of Liechtenstein's railways. The ÖBB group is owned entirely by the Republic of Austria and is divided into several separate businesses that manage the infrastructure and operate passenger and freight services.

Roads, bridges and tunnels

The Autobahnen- und Schnellstraßen-Finanzierungs-Aktiengesellschaft (ASFiNAG) is an Austrian publicly owned corporation which plans, finances, builds, maintains and collects tolls for Austrian roads, bridges and tunnels. The ASFiNAG and is fully owned by the Austrian Republic.

Aviation

Aviation is for the most part privatized. The Vienna International is the country's biggest airport and serves as the hub for Austrian Airlines and a base for Eurowings and Niki. Austrian Airlines is the largest subsidiary of German Lufthansa. It is one of the few publicly traded airport operators in Europe and was privatized in 1992.

Other infrastructure

Social infrastructure (schools, hospitals, emergency services centers/prisons)

Typically, these are owned by the public sector with the private's sector's responsibility being for any or all of the design, build, financing, operation and maintenance of the infrastructure.

Education

The Republic of Austria has a free and public school system and nine years of education are mandatory. The federal Ministry of Education is responsible for funding and supervising primary and secondary education, and since 2000, tertiary education enjoys partial autonomy.

Healthcare

Austria has a healthcare system in which virtually all individuals receive publicly funded care, but they also have the option to purchase supplementary private health insurance. Some individuals choose to pay for all of their care privately.

Defense

The Austrian Armed Forces (German: Österreichisches Bundesheer) is the military of the Republic of Austria and is divided into Joint Forces which consist of Land Forces, Air Forces, International Missions and Special Forces.

Waste

Vienna’s municipal waste management system is the largest waste disposal company of Austria. The Federal Waste Management Act provides the legal framework for waste management and regulates all matters pertaining to waste as well as all issues requiring uniform federal provisions.

Water

The largest operator of the entire water supply is the Municipal Department 31 of the municipality of Vienna, which is responsible for operation and maintenance.

Last modified 6 Dec 2019

Belgium

Belgium

Generally

The ownership of energy and infrastructure assets in Belgium varies according to the asset class. The main asset classes are usually considered to be:

  • economic infrastructure (energy, aviation, rail, telecommunications, water, roads and waste); and
  • social infrastructure (education, health and justice/prisons, housing).

Key sectors are considered below.

The gas and electricity industries in Belgium are privatized, with generation, transmission, distribution and supply services provided by a number of private sector companies. The relevant private sector companies own the generation, transmission and distribution assets. Notably two listed public companies (albeit heavily regulated) play major roles:

  • Elia, the transmission network manager, owns all of the electricity transmission lines.
  • Fluxys, the transport network manager, owns all of the gas transmission lines.

Transmission and transport networks are thus owned by these two companies.

For the distribution of energy however, Belgium relies on distribution network managers, each of whom owns its respective distribution network. Most of these distribution network managers leave the exploitation of their networks to be handled by one of the three recognized working companies (Fluvius and ORES).

The private sector finances and delivers most of the required infrastructure but there are a number of government policy mechanisms (adopted through legislation) which are used to incentivize investment in eligible energy generation technologies. In certain instances, including on major energy infrastructure, projects may be procured by the public sector and depending on the terms of the procurement, the asset may either be publicly or privately owned.

The pricing and tariffs of transmission and transport network managers are monitored by the the Commission de Régulation de l'Électricité et du Gaz/Commissie voor de Regulering van de Elektriciteit en het Gas (CREG). This federal agency equally controls the technical functioning of these networks.

Telecoms infrastructure

The telecommunications networks (fixed and mobile) in Belgium are privately owned by three service providers: BASE, Orange and Proximus. However, Proximus (responsible for most of Belgium's broadband infrastructure) may be distinguished from BASE and Orange, because (unlike BASE and Orange) its majority shareholder is the Belgian government.

The Institut belge des services postaux et des télécommunications (IBPT)/Belgisch Instituut voor Postdiensten en Telecommunicatie (BIPT) is the regulator of Belgium's telecommunications sector. It also has responsibility for radio and television broadcast services and postal or wireless communications services.

Transport infrastructure

Heavy rail

The rail market in Belgium is semi privatized but its composition (which is complex) involves both 'autonomous public' and private entities. The principal elements to the rail sector in Belgium are as follows.

The main player in Belgian railway infrastructure is the Société nationale des chemins de fer (SNCB)/Nationale Maatschappij van Belgische Spoorwegen (NMBS). This is a 100% state owned company which is set up to operate independently from governmental instructions, as an 'autonomous governmental company'. Therefore, it is led by an autonomous board, to resemble a private sector participant.

Infrabel, another autonomous governmental company, manages the Belgian railway infrastructure. The SNCB/NMBS is Infrabel's most important customer. It is equally responsible for the maintenance, renovation or renewal and development of the Belgian railway network.

All railway operators in Belgium need an Infrabel license to use their infrastructure. At the end of 2019 Infrabel has granted access to 15 railway companies involved in transport of passengers or goods.

Light rail

Tram networks in Belgium are owned by regionally owned public transportation companies:

  • De Lijn (in Flanders);
  • MIVB (in Brussels); and
  • TEC (in Wallonia).

Since their revenues are consistently too low to cover their operating costs, the respective regional governments annually provide subsidies in respect of these deficits.

Project finance

In most construction deals the project will be procured through a project finance model.

An example of a recent railway PPP is the Antigoon tunnel, the construction of which was completed in 2014. This has been built through a Design Build Finance Maintain (DBFM) construction by a private consortium receiving public financing from Infrabel and the Flemish government. The remainder of funds were provided by the European Investment Bank and a small syndicate of credit institutions. After the 38 year maintenance period the ownership will be transferred to Infrabel.

Since 2010 it has become common practice for tramway or bus construction projects as well to be conducted as PPPs.

The rail sector is regulated by the Regulatory Body for Railway Transport and for Brussels Airport Operations. Its objectives and responsibilities are to supervise the market, to guard the interests of the users and the general public and to advise participants on certain sector related topics.

Roads, bridges and tunnels

In Belgium the regional authorities (through their main agencies AWV and DG1) are responsible for constructing and maintaining roads, bridges and tunnels.

Regional government entities are in charge of operating, maintaining and improving the major highways and all secondary roads in Belgium. Some local roads are the responsibility of local authorities or municipalities. The public sector may outsource the construction, operation and maintenance (sometimes on a project financed basis) of such assets to the private sector. Belgium has no privately owned or exploited toll roads.

Aviation

Aviation in Belgium is mostly privatized, although government financing remains substantial. As regards airport infrastructure, there are a number of ownership structures in the Belgian market, including private ownership, local government ownership and public private ownership. Belgium's main airports are Ostend, Antwerp, Brussels (Zaventem), Charleroi and Liège.

Ports

The Belgian ports sector comprises a number of companies and regional ports, all operating on commercial principles, all to a certain extent benefiting from public subsidy.

Belgium's largest port is the Port of Antwerp, which is operated by the Antwerps Havenbedrijf, a public state owned company. Other large and heavily industrialized ports include Zeebrugge, Ostend, Ghent, Brussels and Liège.

Other infrastructure

Social infrastructure (schools, hospitals, emergency services centers/prisons)

Typically, these are owned by the public sector, with private sector operators responsible for aspects such as the design, build, financing, operation and maintenance of the infrastructure. The majority of social infrastructure assets in Belgium are directly financed by the government. Subject to value for money considerations, private finance may also be used in the procurement of social infrastructure assets. In relation to some of these specific sectors:

Education

The ownership of a school's infrastructure depends upon which category of school it belongs to. For example, in the case of a local authority maintained school, the school and playing fields will be owned by the local authority. The program for new schools currently being implemented is called Scholen voor Morgen. This is a large scale DBFM based infrastructure program of the Flemish government in order to improve educational infrastructure region wide based on private sector financing.

Hospitals

Ownership of hospitals is vested in various public sector bodies. The Belgian regions have competency in respect of the provision of healthcare services in their respective jurisdictions, so the majority of hospitals in Belgium operate under their supervision. However, most hospital funding is provided at a federal level, with additional regional government subsidies, often complemented by private financial sector loans. In general, hospitals equally contribute to the repayment of such loans through their own funds.

Social housing

This is a diverse sector involving many different organizations and individuals including housing developers, building contractors, mortgage lenders, local authorities, housing associations, landlords, owner occupiers, private renters and those in the social rented sector. Typically, on a social housing project, government led social care institutions own and exploit the relevant housing stock. Where similar projects are run by private sector participants, their activities tend to be constrained by public sector regulation.

Defense

Typically, defense assets are owned by the public sector.

Waste

Waste collection is typically coordinated and provided at a public sector level, whereas waste processing is handled primarily by private sector players. Waste processing facilities developed and operated by private sector entities typically serve both public sector and private sector customers and various waste processing initiatives such as car wreck, waste oil and waste medication reclamation can be subsidized with either federal or regional government budgets, depending on the intergovernmental competences.

Water

In Belgium drinking water, industrial water and wastewater services are provided by state-owned companies. These are regionally organized but can also have a subdivision at local levels. All are typically funded through public means.

Last modified 18 Dec 2019

Brazil

Brazil

Generally

The ownership of infrastructure assets varies in Brazil according to the class of the assets. Some assets are completely owned by the government and some assets are owned by private companies. As state-owned companies are facing difficulties for investing in infrastructure, the government is opening space for investment in the sector to private entities, by means of concessions and public-private partnerships. Currently, approximately two thirds of the total invested in infrastructure in Brazil comes from the private sector.

Even with the increase in the participation of private companies, a large part of the funding for infrastructure projects is still provided by public banks, especially the Brazilian Development Bank (Banco Nacional de Desenvolvimento Econômico e Social, or BNDES).

The key sectors are considered below.

Energy

In the energy infrastructure, the private companies already have a significant role. The government does not invest directly in energy, providing the investments through the state-owned companies, especially PETROBRAS and ELETROBRAS, companies that hold a large influence in energy projects.

In several cases, investments in energy projects are provided by means of partnerships between the state owned companies (PETROBRAS and ELETROBRAS) and private companies, increasing the influence of the private companies in energy projects.

Since PETROBAS and ELETROBRAS are passing through a moment of crisis, private investment in energy projects is increasing, a trend which is likely to continue in the coming years.

Notwithstanding the above, in November 2019, President Jair Bolsonaro signed a bill of law authorizing and establishing the rules of ELETROBRAS 'privatization. The Brazilian government intends to capitalize on ELETROBRAS, which has been losing market share in the generation and transmission market. This privatization is expected to take place in the second half of 2020, however, this bill of law must fulfil all legislative rite until its enactment.

Telecoms infrastructure

Brazilian telecommunications infrastructure is privatized. The privatization took place at the end of the 1990s and reduced the public investments. It is now one of the infrastructure sectors where government intervention is lowest.

Recently the bill of law PLC 79/2016 was converted into Law 13,789, dated as of October 3, 2019 (“Law 13,789”), which promoted several changes to the Brazilian General Telecommunications Law and allowed the Brazilian Agency of Telecommunications (ANATEL) to transform current fixed telephone concessions into authorizations, more flexible and less bureaucratic. With the enactment of Law 13,789 important investment values are expected in the coming years.

Transport infrastructure

In transport infrastructure, private investment is predominant. In railroads and ports, public sector investment is secondary, even though still prevalent in railroads investments amounts. In the roads, several concession programs have increased the participation of private companies, but the presence of the public sector is still significant. In the airports, the development of the concession programs is similar to that of the roads. Both the Federal government and private companies provide some investment in waterways as it is a sector with high growth potential during the next years.

The predominance of the private sector in the transport infrastructure is increasing, as the concessions and privatizations are being fostered in roads, railroads, ports and airports.

Other infrastructure

Sanitation

Brazilian state-owned companies and concessions play a dominant role in sanitation infrastructure assets. It is likely that the state-owned companies will face more difficulties with investment in sanitation in the coming years, considering the problems with water resources and the impact of the fiscal adjustments in public investments. In view of this situation, it is anticipated that private investment in sanitation will keep increasing over the coming years. However, the level of difficulty on these projects should be mentioned. In instances, whether by technical issues, abandonment of the concessionaire or other causes, 60% of stalled infrastructure projects are related to sanitation projects. Nonetheless, the sanitation infrastructure projects consist on 9% of the total amount of stalled projects.

Health

In Brazil, investment in the health sector is provided by the government and by private entities, with private investment slightly more prevalent.

Education

The investments in Brazilian primary education are mainly provided by the public sector. Private investment in primary education corresponds to approximately 20% of the total investment in education assets. However, in higher education, private investment is dominant, corresponding to 75% of the total investment in education. The tendency for the next few years is for higher private sector investment in education.

Last modified 4 Dec 2019 | Authored by Campos Mello Advogados

Canada

Canada

Generally

The ownership of energy and infrastructure assets in Canada varies according to the asset class.

The main asset classes include:

  • energy, including both electricity and gas distribution, as well as oil and gas production;
  • public transit;
  • trade and transportation, including roads and bridges;
  • telecommunications;
  • municipal, including water and wastewater and waste disposal; and
  • social infrastructure, including education, health and justice/prisons, housing.

Key sectors are considered below.

Energy

The ownership of gas and electricity supply utilities varies significantly from province to province and in some cases from asset class to asset class. Long distance pipeline and gas transmission infrastructure crosses provincial and national boundaries and is privately owned. Gas distribution networks within provinces are generally also privately owned, with a small group of established utilities dominating the market.

In the electricity sector, each province has its own transmission grid, with a somewhat modest level of ‘east-west’ intertie capacity between provinces and, in some provinces, with significant ‘north-south’ intertie capacity with US systems. Provincial transmission systems are either owned by private entities and/or by publicly-controlled Crown corporations. For example, Alberta’s transmission system is owned by several large private utilities. The majority of Ontario’s transmission system is owned by Hydro One, which was historically a 100% provincially owned Crown corporation, but now privatized (Hydro One had an initial public offering in 2015. The Province of Ontario directly owns 47.4% of the shares of Hydro One.  The remaining 52.6% of its shares now trade publicly (although provincially-owned Ontario Power Generation holds about 1.5%). British Columbia’s transmission system is owned by BC Hydro, also a provincially owned Crown corporation.

Local distribution systems may also be privately or publicly-owned. Alberta is characterized by private and municipal ownership, whereas Ontario’s distributions systems have historically been operated by municipally owned utilities or, in rural and some urban areas, by Hydro One. Generation assets may also be privately or publicly owned. Ontario offers an illustrative mix, in that some large hydro and nuclear baseload facilities are owned by a Crown corporation (Ontario Power Generation), some nuclear facilities are privately owned (e.g., Bruce Power), and most gas-fired, wind and solar facilities are privately owned. British Columbia’s largest generating facilities are owned by BC Hydro, while several smaller cogeneration facilities as well as wind and hydroelectric facilities are owned by private investors. Alberta’s generation fleet is owned by private investors and by municipally-owned utilities.‎

Oil and gas infrastructure in Canada, including both exploration and production of petroleum and gas and pipeline infrastructure, is almost entirely privately owned. While at one time the Canadian federal government and some provincial governments maintained some ownership interest in the oil and gas industry, those interests have been entirely sold off. There are many hundreds of companies in the exploration and production space, ranging in size from vertically integrated global majors to very small venture firms. There are several dozen companies active in the transmission and distribution pipeline space.

There is one significant exception to private ownership in the oil and gas space.  The Trans Mountain pipeline, which ‎carries a variety of crude oil and refined products from Edmonton to Vancouver, was purchased by the Canadian federal ‎government in 2018 in the midst of an expansion project stalled in court challenges and regulatory delays.  It is widely ‎expected that the Trans Mountain pipeline will be privatized after the completion of the expansion project, expected in ‎mid-2022.‎

The National Energy Board regulates aspects of the energy system that cross inter-provincial and international borders. For example, the NEB regulates the construction and operation of interprovincial and international oil and gas pipelines (including tolls and access), international power lines and designated interprovincial power lines, the export of oil, natural gas and electricity, and the import of electricity. Provincial regulators are responsible for similar matters which take place entirely within a province. For example, in Ontario, the Ontario Energy Board regulates electricity and gas rates, licenses generators and distributors, and grants leave to construct certain gas and electricity distribution lines, while the Independent Electricity System Operator manages the transmission grid and runs the wholesale electricity market. In Alberta, the Alberta Energy Regulator regulates oil and gas matters and the Alberta Utilities Commission regulates utility matters such as electricity transmission and distribution.

 

Telecoms infrastructure

Telecommunication infrastructure, including telecommunication and broadcast systems, is primary privately owned in Canada. Three incumbent carriers (Bell, TELUS and Rogers) own the majority of the landline, wireless, and internet networks, with some smaller and regional carriers attempting to gain market share. There are a number of privately owned Canadian broadcasters, as well as the publicly owned Canadian Broadcasting Corporation (CBC).

The telecom sector is extensively regulated, including by the Canadian Radio-television and Telecommunications Commission (CRTC) and by Industry Canada (which, for example, manages wireless spectrum).

Transport infrastructure

Road infrastructure

The majority of Canadian highways are the responsibility of provincial or territorial jurisdictions and the provincial or territorial governments are primarily responsible for the planning, design, construction, operation, maintenance, rehabilitation and financing of the road network. There are limited exceptions to this general rule. Highways which run through National Parks are the responsibility of the federal government and a small percentage of highways fall under municipal jurisdiction.

In comparison to other countries, Canada’s use of tolling on its highway infrastructure is limited. The main exception to this is international bridge crossings between Canada and the US, which are tolled (although the current federal government has commited to removing tolls from the replacement Champlain Bridge International Crossing under construction in Montreal, Quebec). One example of a tolled highway is Highway 407 to the north of Toronto, Ontario, which is owned and operated by a private consortium.

While the responsibility for highway infrastructure falls to the provincial and territorial governments, the federal government does invest significantly in highway and road infrastructure through funds administered by Transport Canada and Infrastructure Canada. Federal government also owns and maintains a number of strategic bridges in Quebec and manages the Canadian portion of several international bridges.

In recent years, significant spending has been incurred in relation to road transportation infrastructure and this has encouraged the development of alternative means of procurement for such infrastructure, including public-private-partnerships dependent on private financing.

Rail transport

 

Canada has a large rail network including two major publicly-traded Class I freight railway companies, Canadian National Railway Company and Canadian Pacific ‎Railway Company, as well as shortline railways that connect to them;  and deliver traffic to and from them.   Passenger rail services are provided nationwide by VIA Rail, a federal Crown Corporation. Commuter services are also provided at various locations by urban transit authorities owned or controlled by different levels of government.‎

Within urban municipalities, subway and light rail systems have  been a particular ‎focus of investment. LRT systems exist in a number of Canadian cities, including Toronto,  Ottawa, Calgary and Edmonton.‎

Rail transportation is regulated at the federal level for both national and inter-provincial railways. Short line railways operating intra-provincial rail ‎systems are generally subject to provincial regulation, although responsibility and oversight for parts of their operations are sometimes ceded by a province to federal ‎authorities.‎

For subway and light rail systems that operate within municipal boundaries, the municipalities have responsibility and a number of the ‎recent subway and LRT projects have been procured by municipal authorities albeit with significant amounts of provincial and federal ‎funding.‎

Social infrastructure

Healthcare infrastructure in Canada is primarily the responsibility of the relevant province and healthcare expenditure is a significant portion of the budgets of each of the provinces across Canada. Hospitals are almost entirely public with relatively limited availability of private healthcare facilities.

Similarly, provinces are responsible for the organization, delivery and assessment of education at the elementary and secondary levels and for post-secondary education. A number of jurisdictions have procured ‘bundled’ school projects through alternative financing processes and public-private-partnerships. Most notably, Alberta has procured three sets of bundled schools through PPPs and Saskatchewan has also implemented a bundled school project.

Last modified 2 Jan 2020

Chile

Chile

Generally

Regarding infrastructure, Chile has decided to include private capital in several areas of the public infrastructure, by means of privatization processes, concessions of public works or long term agreements. The infrastructure related to the energy, sanitary industry and transport infrastructure is mainly privately owned. For example, the electric infrastructure, highways, roads, ports, airports and sanitary services are operated through concessions generally.

It is important to note, that the Ministry of Public Works can finance the construction of some works with public resources, in which case such works belongs to the State. This system allows for the construction of that infrastructure which has social relevance but is less attractive for the private entities considering the economic returns.

The concession of public works is the main modality in Chile for contracting through a public-private association. The State makes a private entity responsible for the execution, conservation, reparation and exploitation of a public work in exchange for the right to receive incomes as agreed in the concession contract. Once the concession agreement finishes, the responsibility for the works returns to the State in order to be reassigned as appropriate.

The concession system has been implemented in Chile since the beginning of the 90s, with positive results mainly because of the respect for the rule of law duly guaranteeing the interests of all the parties involved, including third parties that are related with the parties directly involved in the concession contract.

Energy and telecoms infrastructure

In general terms, the energy and telecom market in Chile has been designed so that the investment and operation of the infrastructure can be entirely controlled by private actors, promoting economic efficiency as well as new technologies through competitive markets in all of the non-monopolistic segments, while the administration only carries out regulation, control and planning functions.

Transport infrastructure and other infrastructure

The Chilean Ministry of Public Works (MOP) has a set of rules and regulations that regulate the procedures for the participation of private actors – national or foreign in the construction and maintenance of public roadworks. Such works can be financed directly by the MOP (Decree N° 75/2004) or can be built by means of private resources through the public-private alliance that represents the concession system. This set of rules and regulations constitutes a harmonious whole, under the principles of transparency and efficiency of the public resources involved.

The concession system regulated by the Public Works Concession Law applies to public works that are the direct competence of the MOP or by means of delegation. Article 39 of the Public Works Concession Law establishes that ‘The Public Work Ministry is competent to give in concession every public work, the equipment provision or the associate services provision, except in the case where those works are delivered to the competence of another Ministry, public service, municipality or public company or other organism that integrates the State administration. In these cases, this public bodies are allowed to delegate through a mandate convention signed with the Public Work Ministry, the concession of those works under its competence, with the purpose that then they delivered its concession, regulated by this law’.

Last modified 6 Dec 2019 | Authored by BAZ|DLA Piper

Colombia

Colombia

Generally

The ownership of energy and infrastructure assets on Colombia varies according to the asset’s sector. In general, public utilities and infrastructure services must be provided by the state, but they can engage private sector investment through concession contracts that grant to a private individual or company the provision or operation of a public service or the construction of a work or good.

Additionally, the government issued the Public-Private Partnership’s (PPP) regime (Law 1508 of 2012) to attract long-term investors with enough financial capacity to develop:

  • the design and construction of infrastructure and its utilities;
  • the construction, rehabilitation, improvement or equipment of infrastructure, including the operation and maintenance of the infrastructure; and
  • infrastructure for providing public services.

Projects typically use a BOOT structure where at the end of the 30-year concession period, the infrastructure reverts to the public sector who will own and operate it, or grant it in concession again to a different investor. PPPs can be structured to develop infrastructure in any sector in which the provision of infrastructure and its related services are needed and to projects with a minimum investment of US$1.7 million. There are two type of PPPs:

  • Public Initiative PPPs structured by the government that can be developed using private and/or public resources; and
  • Unsolicited Proposals PPPs that are structured by a private company (only for new projects) which can be funded 100% with private resources or with private resources and a maximum of 20% public funds.

Colombia’s main privatizations have occurred in the electricity, mining and hydrocarbon sectors. Under Law 226 of 1995, the state can privatize state-owned companies by alienating the shares or convertible bonds owned by the government in a company’s capital by offering them to the company’s cooperatives and workers associations in the first place. If they show no interest, the government can then proceed to offer them to the general public. In addition, the Constitution allows for the government to create mixed-economy companies that are jointly owned by the public and private sectors. These companies, organized under the structure of a joint-stock corporation, can own and operate infrastructure assets or provide infrastructure services.

Energy

The private sector finances and delivers most of the required infrastructure in the energy sector.

Electricity

The electricity sector in Colombia is a complex system comprised of generation, transmission, distribution, commercialization and interconnection activities. The economic agents who can participate in this sector’s activities are public-owned companies, private companies and mixed-economy companies.

The construction of energy generation facilities and its connecting power lines to the interconnection and transmission networks can be performed by any economic agent, which maintain the ownership of the assets. In addition, companies that own power lines, substations and facilities that are part of the National Interconnection Network, as well as electricity transmission and distribution assets, also maintain their ownership.

Mining and hydrocarbons

Subsoil and mineral resources are owned by the state. However, the state doesn’t participate in oil and gas production or mineral extraction as these activities are performed by private companies and ECOPETROL, a mixed economy company, through concession contracts (mining) and exploration and production contracts (hydrocarbons) granted by the National Mining Agency and the National Hydrocarbons Agency respectively.

The Regulation Commission for Energy and Gas (CREG) and the Mining and Energy Planning Unit (UPME) are the principal state agencies responsible for regulating the energy sector and market in Colombia.

Telecoms infrastructure

The telecommunications networks (fixed and mobile) in Colombia can be publicly or privately owned operators and service providers.

The electromagnetic spectrum is a public good subject to the state’s administration and control. Law 182 of 1992 (modified by Law 335 of 1996) introduced a reform in this sector in Colombia by establishing the possibility for private companies to provide television services through national operation private channels. In addition, television services can be provided by public entities and organized communities.

Transport infrastructure

Aviation

Air transportation in Colombia is considered a public service. There are several ownership structures in Colombia’s aviation market, including private aerodromes and public aerodromes operated by territorial entities or by private companies that operate them under concession contracts. However, airports are owned by the state but constructed and operated by a private company under a concession agreement that usually lasts 20 years. These concessions were previously granted and managed by the Civil Aviation Authority but recently the National Infrastructure Agency (ANI) took over this task.

Ports

Ports in Colombia are constructed and maintained by port-operating companies organized as joint-stock companies, which can be publicly owned, privately owned or jointly owned by a private company and a public entity. Only port-operated companies can be granted with a port concession contract for a 20-year period.

Railways

Two mining companies privately own the only two standard gauge railways that currently exist in Colombia. However, private initiative PPP projects have been presented to the ANI and are under study in its feasibility phase for financing and operating the currently inactive lines.

Roads

Road and highways in Colombia can be classified into four categories:

  • national road network under concession, financed and operated by private companies;
  • non- concessional national road network financed by the national government and operated by the National Roads Institute;
  • secondary road network, financed and operated by departments; and
  • tertiary road network financed and operated by municipalities.

Road infrastructure in Colombia linking private participation has been developed through three generations of concession contracts to finance, design, build, operate and maintain highways. A fourth generation of concessions was launched in 2012 under the PPP scheme, where private investors can participate in public initiative PPPs bidding processes or present unsolicited proposals to be entirely founded with private resources or with both public and private funds.

Public transportation

The Massive Transportation Integrated Systems (SITM) were recently implemented in Colombia’s major cities for improving urban public passenger transportation. The construction of the infrastructure (ie lanes, stations, stops) needed for the SITM’s was performed by private construction companies who were awarded with a public works contract by the city’s government. For the operation of the systems, local governments award 10-year concession contracts, some for purchasing, maintaining and operating the buses and others to operate the payment collection systems.

Other infrastructure

Residential public utility services

Water supply, sewage, sanitation, electric energy (transportation to final user), natural gas distribution, basic public telephone and mobile telephone in rural areas are considered as residential public utility services, and must be provided by a Public Utility Company (Empresa de Servicio Público Domiciliario (ESP)), incorporated under the structure of a joint-stock corporation. ESP shareholders may be companies or individuals from the private sector, public sector entities or mixed economy entities. Even though a single ESP may provide more than one public utility service, the regulatory agencies (Water and Basic Sanitation, Energy and Gas and Telecommunications) may limit the ESP’s business to only one service to prevent monopolization.

Defense and national security

Typically, defense assets are owned by the public sector. However, private companies can provide goods and services required for this sector to the government.

Social infrastructure (schools, hospitals, penitentiaries, public buildings)

Typically, infrastructure from these sectors is owned by the public sector. Most social infrastructure assets in Colombia are directly financed by the government. However, the goal is to attract private investment through PPPs to develop these sectors that have traditionally been left behind.

Last modified 20 Oct 2017 | Authored by DLA Piper Martinez Beltrán

Czech Republic

Czech Republic

Generally

The ownership of energy and infrastructure assets in the Czech Republic varies according to the asset class. The main asset classes are usually considered to be:

  • economic infrastructure (energy, aviation, rail, telecommunications, water, roads and waste); and
  • social infrastructure (education, health and justice/prisons, housing).

Key sectors are considered below.

Energy

The gas and electricity industries in the Czech Republic are privatized, with the generation and distribution and supply services provided by a number of private sector companies. However, the dominant producer of electricity is ČEZ, a.s., a joint-stock company with the Czech Republic as the company's largest shareholder with a nearly 70% stake in the registered capital. The relevant private sector companies own the generation and distribution assets.

The Czech Transmission System Operator, a joint-stock company (Česká energetická přenosová soustava, akciová společnost) controlled by the Ministry of Industry and Trade, is the sole transmission- company and holds an exclusive license granted by the Energy Regulatory Office under the Act No. 453/2000 Coll., Energy Act.

The Energy Regulatory Office (Energetický regulační úřad in Czech) is the principal body with responsibility for regulation of the energy sector in the Czech Republic.

Telecoms infrastructure

The telecommunications networks (fixed and mobile) in the Czech Republic are privately owned by a number of service providers. A good example is T-Mobile which is responsible for most of the Czech broadband infrastructure but whose work is heavily regulated by the government. Czech Telecommunication Office (Český telekomunikační úřad) is the regulator of the Czech telecommunications sector. It also has responsibilities for the wireless communications services.

Transport infrastructure

Light rail

Typically, light rail assets (such as trams and associated track) are owned by local public sector promoting bodies. For example, The Prague Public Transit Co. Inc. (Dopravní podnik hlavního města Prahy, akciová společnost) owns the tubes, track and supporting infrastructure in Prague.

Heavy rail

The rail market in the Czech Republic is in the early stage of liberalization and its composition (which is complex) involves both public and private entities. The principal elements of the rail sector in the Czech Republic are as follows.

  • The owner of the majority of railway lines in the Czech Republic is the state represented by the Railway Infrastructure Administration, which is a state organization (Správa železniční dopravní cesty, státní organizace). The Railway Infrastructure Administration is the guarantor of the operability, modernization and development of the railway system of the Czech Republic.
  • Public transport authorities, ie central and devolved government bodies and some metropolitan bodies, specify, let and manage operating contracts and give Network Rail a significant proportion of the funding for infrastructure maintenance and enhancement.
  • The majority of current passenger services are operated by the state company Czech Railways, a joint-stock company (České dráhy, akciová společnost). In 2011, the privately owned RegioJet became the first company to actively compete with Czech Railways on a route. Other private companies own exclusive rights to run services on certain lines.

The rail sector is regulated by the Czech Rail Authority (Drážní úřad in Czech).

Roads, bridges and tunnels

A government entity, Road and Motorway Directorate of the Czech Republic, operates, maintains and improves the motorways and major A roads (ie the strategic road network) in the Czech Republic. Road and Motorway Directorate of the Czech Republic is regulated by the Ministry of Transportation and receives funding from the government for investment in the strategic road network (including additional road capacity).

Local roads in the Czech Republic are the responsibility of local authorities. The public sector may outsource the construction, operation and maintenance (sometimes on a project financed basis) of such assets to the private sector. In the case of tolled roads, the private sector has taken on roads/crossings on a full concession basis – namely, responsible for the design, build, financing, operation, maintenance and collection of tolls for a number of years with the main revenue stream being the collection of toll revenues from users (rather than any service payments from the public sector).

Aviation

Aviation in the Czech Republic is (for the most part) privatized. As regards airport infrastructure, there are a number of ownership structures in the Czech Republic market, including public or local government ownership and private ownership. All models are heavily regulated by government and the Civil Aviation Authority (Úřad pro civilní letectví) is the aviation regulator in the Czech Republic.

Other infrastructure

Social infrastructure (schools, hospitals, emergency services centers/prisons)

Typically, these are owned by the public sector. The majority of social infrastructure assets in the Czech Republic are directly financed by the government or by the local authority.

Education

The main responsibility for schools stays with the Ministry of Education, Youth and Sport, although more responsibilities were recently delegated to municipal and local authorities. However, existing private schools receive a state contribution towards running costs and are allowed to charge tuition fees. Higher education in the Czech Republic consists of public, state (police and military) and private universities, which also receive a state contribution.

Hospitals

Ownership of hospitals is vested in various public sector bodies and more recently also in private owners.

Defense

Typically, defense assets are owned by the public sector.

Waste

In the Czech Republic, the waste sector is operated by both public (municipal or local) and private companies and is regulated under the Act No. 185/2001 Coll., Waste Act (Zákon o odpadech).

Water

In the Czech Republic, the water industry is regulated under the Act No. 274/2001 Coll., on Water Supply and Sewerage (Zákon o vodovodech a kanalizacích), but services are largely operated by private companies with exclusive rights for a limited period and a well-defined geographical space.

Last modified 20 Oct 2017

Finland

Finland

Generally

The ownership of energy and infrastructure assets in Finland varies according to the asset class. The main asset class may be divided into:

  • economic infrastructure (energy, aviation, rail, telecommunications, water, roads and waste); and
  • social infrastructure (education, health and justice/prisons, housing).

Key sectors are considered below.

Energy

Finland's electricity market was gradually opened to competition after the passing of the Electricity Market Act in 1995. Since late 1998, all electricity users, including private households, have been able to choose their preferred electricity supplier. Monopolistic electricity transmission is regulated and supervised by the national authority, which in Finland is the Finnish Energy Authority.

Fingrid Oyj  is responsible for the electricity transmission in the hihg-voltage transmission in Finland.  Republic of Finland owns approximately 28% of the shares, National Emergy Supply Agency 25% and Ilmarinen Mutual Pension Insurance Company 20 %. There are approximately 76 electricity distribution network operators in Finland. Sale of electricity does not require permit but is regulated and supervise by the authorities.  The electricity market also allows electricity consumers (including households) to practice small-scale electricity production and sell the energy on the market.

The electricity market is regulated by the Electricity Market Act and Government Decrees based on the Electricity Market Act. The Energy Authority monitors compliance with the electricity market legislation and promotes the operation of the competitive electricity and natural gas markets.

From the beginning of 2020, the Finnish natural gas transmission network wil be operated by state-owned gas transmission operator, Gasgrid Finland. Under the Natural Gas Market Act the wholesale and retail natural gas markets will be opened for competition at the beginning of 2020.  Simultaneously the previous TSO, Gasum will be unbundled and Finland is not anymore an isolated market.

Telecoms infrastructure

The telecommunication networks in Finland are privately owned by a number of service providers. Elisa, TeliaSonera and DNA, which is a subsidiary of the Norwegian Telenor.

The Finnish Transport and Communications Agency Traficom  steers and supervises compliance with the provisions and regulations that apply to its field of activity. Traficom’s steering and supervision applies to telecommunications operators, TV and radio operators, users of radio frequencies, postal operators, and several players related to electronic communications networks.

 

Transport infrastructure

Light rail

Light rail systems (metro and trams) in Helsinki are managed by the Helsinki City Transport (HKL) that is owned by the City of Helsinki. HKL owns the tramways, metro tracks and metro stations of Helsinki, as well as the trams and metro trains themselves. Further, HKL owns the public transport infrastructure in Helsinki and is in charge of developing and maintaining it. Other cities in Finland do not have light rail public transportation.

Heavy rail

In Finland the rail passenger market is not yet open to competition and VR is the only train operating company in Finland. The rail freight market was fully opened to competition in 2007, with the first new entrant on the market in 2012.

The Finnish Transport Agency is responsible for the state-owned railways. The transport system is maintained and developed in cooperation with other actors, such as VR Tracks, a subsidiary of the VR Group.

Roads, bridges and tunnels

Together with the regional ELY Centers, the Finnish Transport Agency is responsible for the maintenance and development of the state-owned road network. The Finnish road network comprises highways (owned by the State), municipal street networks (maintained by municipalities) and private roads (owned by private individuals or associations, and are mainly used to enable the passage to private lands and may only be used by those who own the roads). Private roads may only be established by application and in accordance with the Act on Private Roads. The public sector does not currently outsource the construction, maintenance or operation of roads. It does however, use public procurement procedures when planning and contracting and maintaining roads. For example, Public-Private Partnership (PPP) financing models have been used in motorway projects (eg E18 Muurla-Lohja motorway).

Aviation

The basic rules governing aviation in Finland can be found in the Aviation Act and in EU regulations directly applicable in all member states. Some of the market is privatized however, the principal actors on the market are government owned companies. For example the biggest airline is Finnair, of which the state owns almost 60%. However, airports themselves and the aviation infrastructure are not privatized and are all owned by the state of Finland. The maintenance of all airports is the responsibility of Finnavia Oyj, which is a public limited liability company owned by the state.

Ports

In the past, the ports in Finland have been public utilities of municipalities but after the decision of the European Commission, the ports were incorporated and are nowadays limited liability companies. The ports are however, mainly in the ownership of municipalities or a group of municipalities. Also, the industrial sector owns some ports for the purposes of their industry.

Other infrastructure

Social infrastructure (schools, hospitals, emergency services, centers/prisons)

Typically, all are owned by the public sector.

Hospitals/healthcare

Healthcare in Finland consists of a highly decentralized, publicly funded healthcare system and a relatively small private sector (mainly consisting of occupational health care, provided to employees by their employer as a work benefit and also of few private hospitals and healthcare hubs). Each person residing in Finland has the right to healthcare services.

The Ministry of Social Affairs and Health is the highest decision-making authority regarding healthcare, but the municipalities are responsible for providing healthcare to their residents. The municipal financing of healthcare consists of two sources; municipal taxes and user fees. The municipalities also have the right to receive state subsidies, if their tax levy is not adequate for providing the public services required.

The private sector is relatively small and the barrier to using private healthcare services are high due to the higher service fees. However, the Social Insurance Institution (KELA) reimburses a significant share of the cost.

There is an ongoing social welfare and healthcare reform in Finland, the objective of which is to create financially viable bodies as service organizers (including private sector bodies), and to also to achieve complete horizontal and vertical integration of social welfare and health care services. This reform is expected to offer opportunities to investors.

Schools

Schools are generally owned by the public sector (mainly municipalities). However, schools may outsource certain services such as building, maintenance and other projects to private sector entities.

Defense

Defense assets are owned by the public sector.

Waste

The municipalities must organize the recovery and treatment of hazardous agricultural waste and domestic waste. In addition to this, municipalities are responsible for the urban waste produced by public administration services and the education sector. Municipalities also distribute information and offer guidance on waste management. Municipal responsibilities are described in more detail in Section 32 of the Waste Act. In practice, many municipalities sub-contract most of their waste management duties to local companies.

Water

The municipalities are responsible for the arranging of water and wastewater services in Finland but water supply establishments usually provide the services. The regional ELY Centers as well as the municipal health authorities regulate and supervise the water sector.

Last modified 26 Nov 2019

France

France

Generally

From a general point of view, infrastructure and energy infrastructure assets in France are mostly owned by the state or the relevant public entity.

Energy

The gas and electricity industries in France have been partially privatized (EDF-GDF).

Onshore wind farms, offshore wind farms and photovoltaic plants are owned by the private companies in charge of the projects, not by public entities.

The energy sector is regulated by an independent administrative authority entitled Commission de Régulation de l'Energie (CRE).

Telecoms infrastructure

The telecommunications networks (fixed and mobile) in France are privately owned by a number of service providers (Orange, Bouygues, SFR and Free).

The telecom sector is regulated by an independent administrative authority entitled Autorité de Régulation des Communications Electroniques et des Postes (ARCEP).

Transport infrastructure

Rail

Railway infrastructure is owned by SNCF Réseau, a public entity managing the railway infrastructure.

The railway sector is regulated by an independent administrative authority entitled Autorité de Régulation des Activités Ferrovières et Routières (ARAFER).

Highways

Highways are owned by the state and concessions have been granted to private companies.

The highways sector is regulated by the ARAFER.

Aviation

Airports are owned by public entities (State or local public entities), who have generally granted a concession. Concessionaires were initially state-owned entities, but French law now provides for a progressive opening of the share capital of the concessionaires to the private sector.

The aviation sector is regulated by the Direction Générale de l'Aviation Civile (DGAC).

Other infrastructure

Social infrastructure (schools, hospitals, emergency services centers/prisons)

These assets are owned by the relevant public entities in France. Generally, a contractor is in charge of the construction or the maintenance of these assets pursuant to a public-private partnership.

Last modified 4 Dec 2019

Germany

Germany

The gas and electricity industries in Germany are privatized, with the generation/production, transmission, distribution and supply provided by various private sector companies. Accordingly, relevant infrastructure assets used for generation/production, transmission and distribution are owned by private sector companies. However, at a regional level, municipal utilities (such as public law companies or private law entities in majority held by municipalities) may provide utility services under a public service mission and therefore may also own energy infrastructure assets.

Motorways and roads are almost exclusively owned by the state, either by the Federal Republic of Germany (eg the motorways), or the relevant Bundesländer, municipal entities etc. Very few roads are privately owned. The same is true for other traffic assets (tunnels etc).

The major German rail company, Deutsche Bahn, is organized as a stock exchange company, but all stock is held by the Federal Republic of Germany. Other smaller rail companies exist which are, however, private entities.

Last modified 20 Oct 2017

Ghana

Ghana

Energy

Energy assets are publicly or privately owned or by way of joint venture.

Electricity

There are currently three hydro-electric dams in Ghana, all of which are state-owned.

The Volta River Authority (VRA), a statutory authority responsible for generating electricity, owns a number of thermal plants located in Aboadze near Takoradi, and within the Tema enclave, with a combined generation capacity of 1,292MW.  The 340MW Takoradi Thermal 2 (T2) Power Plant is a joint venture between VRA and a private company from Abu Dhabi.  There are also other independent power producers who are contributing to the energy generation capacity. 

VRA owns a 2.5MW Solar Power Plant located in Navrongo, in the Upper East Region. Two other solar plants located at Gomoa Onyandze near Winneba in the Central Region were developed by private entities.

Power Distribution Services Ghana Limited, which comprises Ghanaian investors (51%) and foreign technical partners (49%), recently took over operations of the Electricity Company of Ghana (ECG). It is currently the electricity service provider in all of ECG’s operational areas in the southern distribution zone of Ghana. The Northern Electricity Distribution Company (NEDCo) is responsible for distribution of electricity in the northern sector of the country. Ghana Grid Company (GRIDCo), a wholly owned government entity which has responsibility for the transmission functions of the electricity sector owns a majority of the transmission facilities.

Oil and Gas

There are three major oil fields in Ghana: Jubilee, SGN and TEN. They are operated by two international oil companies on behalf of the joint venture partners including the Ghana National Petroleum Corporation (GNPC) a statutory corporation responsible for undertaking the exploration, development, production and disposal of petroleum. 

Bulk Distribution Companies, Oil Trading Companies and Oil Marketing Companies licensed by the National Petroleum Authority to import, export, distribute and market crude and petroleum products, are largely privately owned.

Ghana has a gas processing plant located at Atuabo in the Western Region operated by the Ghana National Gas Company which is mandated to build, own and operate infrastructure required for the gathering, processing, transporting and marketing of natural gas resources in the country. 

Telecommunications infrastructure

The National Communications Authority (NCA) is responsible for regulating the provision of communications services in Ghana. Telecommunications infrastructure is largely privately owned.

There are four mobile network operators in Ghana, three of which are wholly privately owned. They are AirtelTigo, Glo, MTN and Vodafone, in which the government of Ghana has about 30% shareholding. Vodafone and AirtelTigo also provide fixed line services to the public.

The mobile telecommunications sector has about 5,000 communication towers, the majority of which are owned by three privately owned tower companies.  

Transport infrastructure

Road

Road transport is the primary land transport system in Ghana. Ownership of the road network is held by the government. The Ghana Highway Authority is responsible for the administration, control, development and maintenance of trunk roads and related facilities.

Rail

Rail infrastructure in Ghana is currently largely government-owned. The Ghana Railway Company Limited operates the railways and is responsible for managing the national rail system. 

Government has been seeking private sector participation in the development and rehabilitation of railway infrastructure. The Ministry of Railways Development has for example recently entered into a concession agreement with the Ghana European Railway Consortium (GERC) (which consists of 16 investment companies from Ghana, Germany, Austria, France and Italy) for the construction of the Eastern Railway line. 

Aviation 

Cargo and passenger aviation is privately owned. The Ghana Civil Aviation Authority is responsible for the regulation of the aviation sector.

The only international airport, Kotoka International Airport, is owned by the government and managed by the Ghana Airports Company Limited. There are domestic airports in Kumasi, Sunyani, Tamale and Takoradi. An airport is being constructed in Ho and the government plans to convert the Kumasi airport into an international airport.

Two private passenger airlines currently operate domestic flights. Three others have suspended operations.

Ports

The government dominates infrastructure ownership in this sector. The two main ports are located in Tema and Takoradi. The Ghana Ports and Habours Authority is the statutory body responsible for planning, building, developing, managing, maintaining and operating ports in Ghana. The government has indicated that there are plans to develop a port in Keta and an inland port in Boankra near Kumasi to facilitate trade with neighboring landlocked countries.

Other infrastructure

Education infrastructure

Ownership of education infrastructure is a combination of public and private ownership. A majority of these are public schools. It is reported in the Ghana Education Service’s Education Management Information System data that in the 2017- 2018 academic year, there were 21,730 public basic schools and 10,056 private basic schools in Ghana. Regarding Senior High Schools, 630 were publicly owned and 286 of them were privately owned.

Hospital infrastructure

Health facilities in Ghana are both publicly and privately owned.

The Ghana Health Service in its 2017 facts and figures report indicates that in 2016 about 78.7% of hospital beds in the country were publicly owned and 16.9% privately owned.

Last modified 15 Jan 2020 | Authored by Reindorf Chambers

Hungary

Hungary

Generally

The ownership of energy and infrastructure assets in Hungary varies according to the asset class. The main asset classes are usually considered to be:

  • economic infrastructure (energy, aviation, rail, telecommunications, roads and waste); and
  • social infrastructure (education, health and justice/prisons and housing).

Key sectors are considered below.

Energy

The liberalization of the Hungarian electricity and natural gas market was completed in 2008, with generation, transmission, distribution and supply services provided by a number of private sector companies. Private sector companies own such generation assets, however, transmission and distribution assets are owned by the state owned MAVIR Hungarian Independent Transmission Operator Company Ltd.

The public sector finances and delivers most of the required infrastructure but there are a number of private sector investments, mainly in connection with the renewable and smaller scale co-generation energy generation technologies.

The Hungarian Energy and Public Utility Regulatory Authority (MEKH) is the principal body with responsibility for regulation of the energy sector in Hungary.

Telecoms infrastructure

The telecommunications networks (fixed and mobile) in Hungary are privately owned by a number of incumbent service providers. A good example is Telekom Hungary which is responsible for most of Hungary's broadband infrastructure but whose work is heavily regulated by government.

The National Media and Infocommunications Authority (NMHH) is the regulator of Hungary's telecommunications sector. It also has responsibilities for television broadcast services and wireless communications services.

Transport infrastructure

Light rail

Typically, light rail assets (such as trams and associated track) are owned by local public sector promoting bodies.

Heavy rail

The rail market in Hungary is dominated by the state owned Hungarian State Railways Ltd. (MÁV). The principal elements to the rail sector in Hungary are:

  • Hungarian State Railways Ltd. (MÁV), a private limited company, is on the public sector balance sheet and owns or operates and maintains rail tracks, signaling and station infrastructure. It is responsible for operating most of the regulated national rail infrastructure.
  • Freight Operating Companies (FOCs) and Rolling Stock Companies (ROSCOs) are mostly owned by the Hungarian State Railways Ltd.

The rail sector is regulated by the National Transport Authority.

Roads, bridges and tunnels

A government entity, Hungarian Public Road Non-Profit Ltd, operates, maintains and improves the motorways and major roads in Hungary, and receives funding from the government for investment in the strategic road network (including additional road capacity). Local roads in Hungary are the responsibility of local authorities. Construction contracts are generally procured by the National Infrastructure Developing company NIF Zrt. In the case of toll roads, the private sector has taken on roads/crossings on a full concession basis and is therefore responsible for the design, build, financing, operation, maintenance and collection of tolls for a number of years with the main revenue stream being the collection of toll revenues from users (rather than any service payments from the public sector). However, these types of projects are no longer considered viable as the private sector is not willing to take ‘demand risk‘ in order to service the upfront capital costs and associated bank debt.

Aviation

Aviation in Hungary is (for the most part) privatized. As regards airport infrastructure, there are a number of ownership structures in the Hungarian market, including private ownership and local government ownership. All models are heavily regulated by government and the National Transport Authority is the aviation regulator in Hungary.

Other infrastructure

Social infrastructure (schools, hospitals, emergency services centers/prisons)

Typically, these are owned by the public sector (eg ownership of hospitals is vested in various public sector bodies). The majority of social infrastructure assets in Hungary are directly financed by the government.

Defense

Typically, defense assets are owned by the public sector.

Waste

In Hungary waste related services are provided by the public sector, which is responsible for designing, building, operating and maintaining the facilities and the infrastructure.

Water

In Hungary water and wastewater services are provided by state owned companies.

Last modified 20 Oct 2017

Italy

Italy

Generally

Energy

The energy sector has a fundamental role to play in the growth of Italy's economy, both as a facilitating factor (providing a competitive supply environment whilst limiting environmental impact) and also as a growth factor itself. This is why the government has drawn up a National Energy Strategy that sets out clearly the main goals to be pursued in the coming years whilst remaining aware that we are acting in a free market context and with driving forces that cannot be controlled centrally. Sustainable growth, the main priority for both the government and the country, can be achieved only if the competitiveness of the Italian economy improves substantially, not least within the energy sector and the national electricity market. To achieve this goal, it will be essential to act on all structural factors which may enhance Italy's competitive position internationally.

Infrastructure

The infrastructure sector in Italy is expected to have an increasingly important role in the national economy in the following years due to the effort of the Italian government to promote economic growth and modernization of the country through infrastructural investments, both public and private. In general, infrastructure is publicly owned, apart from some minor projects (touristic marinas, stadiums, management of airports, management of ports etc). Most infrastructures are now developed under public-private partnership (PPP) schemes financed through project financing investments (metro, motorways, hospitals, light rail, public offices etc).

Energy

The ownership of energy and infrastructure assets in Italy can be private or public. From the grid perspective, the National Electric Transmission Grid (RTN), with over 72,000 km of HV lines, is publicly owned but its management has been assigned to a specific private operator (TERNA). From the ‘operator's’ point of view, the generation, distribution and supply services has been privatized by the Bersani Decree in 1999 – which has liberalized the energy market by the creation of free competition. The distribution of energy is granted under a concession regime to certain operators while the supply activity of energy is freely carried out by other companies in a competitive regime. All the activities are carried out under the vigilance of the energy authorities. The main public bodies having responsibility for the regulation of the energy sector in Italy are the GSE (Gestore Servizi Energetici) and ARERA (Autorità di Regolazione per Reti e Ambiente).

Transport infrastructure

Heavy rail

The rail market in Italy is dominated by the national railway company Gruppo Ferrovie dello Stato Italiane, a publicly owned company which includes the national network owner RFI Rete Ferroviaria Italiana. With regard to high speed trains, a new operator, Nuovo Trasporto Viaggiatori S.p.A., has entered the market offering high speed train transportation. There are no signs of the market opening up to more competitors on high speed transportation.

Light rail, public buses

Light rail assets (such as trams and associated track) are generally owned by local public sector promoting bodies. As for metro lines, two important projects (Milan Line M 4 and Milan Line M5) have been developed under a PPP scheme. Similarly to light rail, certain regional authorities have tendered concession agreements for the renewal, maintenance and operation of public buses for regional public transportation.

Roads, bridges and tunnels

A government entity (ANAS) operates, maintains and improves the motorways and major state roads in Italy. ANAS is regulated by the Ministry of Infrastructures and Transport and receives funding from the government for investment in the strategic road network (including additional road capacity). Local roads in Italy are the responsibility of local authorities. The public sector may outsource the construction, operation and maintenance (sometimes on a project financed basis) of such assets to the private sector. In certain cases, the private sector is awarded the design, build, financing, operation and maintenance of motorway sections (in particular the BreBeMi motorway where traffic risk is mainly with the private sector).

Aviation

Aviation in Italy is (for the most part) privatized. In relation to airport infrastructure, there are a number of ownership structures in the Italian market, including private ownership, local government ownership and various forms of public-private ownership. All models are heavily regulated by government and ENAC, the Italian Civil Aviation Authority.

Ports

The Italian ports sector comprises a variety of company and municipal ports, all operating on commercial principles, independently of government and largely without public subsidy. The private sector operates the vast majority of the Italian major ports.

Other infrastructure

Social infrastructure (schools, hospitals, nursing homes etc)

Typically, these are owned by the public sector. Social infrastructure assets in Italy have often been directly financed by the government, save for hospitals and nursing homes where in the recent years the PPP model has been at the base of the most successful projects in the sector or where (especially for nursing homes) investment funds are investing using private capital.

Education

The ownership of a school's infrastructure depends upon the categorization of the school itself. For example, in the case of a local authority maintained school, the school and playing fields will be owned by the local authority, whereas an academy school (which receives funding directly from the government) may lease land from a local authority. In the case of private schools, these are owned and financed by private institutions although it is not uncommon that such private schools receive at least some funding from the government.

Hospitals and nursing homes

Ownership of hospitals and nursing homes in Italy is often vested in various public sector bodies managed and financed at regional level and operating within the National Health Service. There are also several private structures which can also provide health services under specific arrangements with the National Health Service. In recent years, most of the new hospitals especially in the northern regions have been developed under PPP schemes and investment funds are investing in public and private healthcare facilities. It is important to point out that the construction of health and social care facilities and the carrying out of the relevant activities are heavily regulated both at national and regional level.

Defense

Typically, defense assets are owned by the public sector.

Waste

Waste management in Italy is managed at a municipal level in accordance with national legislation, and differs widely from area to area. Companies in the waste management sector provide services on a continuing basis, with prices set through service contracts. By law such prices are required to cover the full cost of operations and investments, based on the principle of full cost recovery. To date, most players in the waste management sector are public-private partnerships or private companies.

Water

Water and wastewater (sewage) services in Italy are delivered by public sector companies (water companies) which use the relevant public infrastructure assets. In certain cases, such companies are grouped together to form an ATO (Optimized Territorial Area) so as to manage the relevant services in a more efficient manner by way of outsourcing to private companies.

Last modified 22 Jan 2020

Japan

Japan

Generally

The ownership of energy and infrastructure assets in Japan varies by industry. The primary infrastructure industries are:

  • economic infrastructure (energy, aviation, rail and telecommunications); and
  • social infrastructure (including education and health).

Key sectors are detailed below.

Energy

Assets of the gas and electricity industries in Japan are privately owned. Generation, transmission, distribution and supply services are provided by companies in the private sector.

Telecoms infrastructure

Assets of telecommunications networks (such as mobile phones and television) in Japan are also privately owned by several different service providers other than the Japan Broadcasting Corporation/Nippon-Hoso-Kyokai (NHK) and Japan Post Holdings Co., Ltd. NHK is a publicly-owned broadcast business operator established by the Broadcast Act and under the jurisdiction of the Ministry of Internal Affairs and Communications. Japan Post Holdings Co., Ltd. is a mail and logistics operator which was recently partly privatized and listed on the Tokyo Stock Exchange.

Transport infrastructure

Assets of the transport industry in Japan are privately owned.

Social infrastructure

There are public and private schools and hospitals in Japan. The ownership of assets of these schools and hospitals depends on their public or private designation.

Water and wastewater services

Water and wastewater services in Japan are delivered by public organizations which own the relevant infrastructure assets. However, certain public organizations entrust the operation of such services to private companies.

Last modified 5 Dec 2019

Luxembourg

Luxembourg

Various industries have been privatized or liberalized in Luxembourg further to the EU liberalization and free-market policy.

In Luxembourg, rail, roads, waste, health, justice/prisons, defense, social housing and education are mostly publicly owned.

Telecoms, space related activities, aviation, energy are mostly privatized, however, the most important companies operating in this field in Luxembourg are owned by the public sector (eg Post, Luxair, Enovos, SES).

Last modified 10 Dec 2019

Mauritius

Mauritius

Energy and infrastructure assets are both publicly and privately owned. This varies widely depending on the projects. For instance, there are several energy and infrastructure projects which are Public Private Partnerships.

Last modified 6 Dec 2019 | Authored by Juristconsult Chambers

Mexico

Mexico

Generally

The ownership of energy and infrastructure assets in Mexico varies according to the asset class. Subsurface rights belong to the Mexican state and the Mexican government may grant concessions to use subsurface land for mining, oil and gas drilling and production or for geothermal exploration and production, among others.

Energy

Deriving from a comprehensive Energy Reform in 2013, which involved changes at both constitutional and secondary legislation levels, a new legal framework was put in place for the energy sector.

Underground hydrocarbons, including oil and gas, are government-owned property and no private property in hydrocarbons is allowed. However, deriving from the Energy Reform, oil and gas activities such as exploration, production, treatment, refining, processing, storage, transportation and commercialization, were opened to the private sector. Private sector companies are now allowed to participate in exploration and extraction activities and ownership of extracted hydrocarbons is permitted in production sharing and license contracts, in which part of the production is given to the contractor. Owners of land where underground hydrocarbons are discovered are entitled to remuneration from commercial production of the discovered wells. The Hydrocarbons Law provides that landowners may receive a percentage of the contractor's profit. Petroleos Mexicanos (Pemex), the state-owned petroleum company, continues to participate in the sector but as an additional player within the blocks awarded to Pemex through entitlements, which provide Pemex the right to explore and/or produce hydrocarbons directly, or through farm-outs or PPPs.

The Electric Industry Law allows the private sector to participate freely in the generation and sale of electricity and the construction of transmission and distribution infrastructure, while maintaining the electricity grid under the operational control of the Federal Electricity Commission (CFE), the state-owned public utility. The new legal framework has created a wholesale electricity market operated by the National Centre for Energy Control (CENACE) as a single independent system operator for the entire grid. Market participants are now able to sell and purchase power directly in the market or through bilateral PPAs, including those awarded through auctions. Operational control of the national grid and the transmission and distribution of electricity are considered strategic areas that remain in the hands of the Mexican government. However, the private sector is able to participate in the transmission and distribution of electricity through agreements and joint ventures with state-owned enterprises. CFE is permitted to participate, through separate subsidiaries, in the different market activities, and is the supplier of basic retail services to residential customers and small and medium-sized commercial customers under regulated tariffs. Nuclear power generation remains under the control of the Mexican government.

Telecoms infrastructure

The legal framework for the telecoms and broadcasting sectors is set out in the in the new Federal Law of Telecommunications and Broadcasting (Ley Federal de Telecomunicaciones y Radiodifusión) (FLTB), which came into force on August 2014. The FLTB states that telecommunications and broadcasting activities are a ‘public service of general interest’, and that the government will at all times maintain the ownership of the radio spectrum. The Federal Government may grant two types of concessions to private sector companies:

  • ‘all-inclusive concessions’, which authorize concessionaires to provide all sorts of telecommunication or broadcasting services through their network and that according to their use may be classified as commercial, public, social or private; and
  • concessions to use radio-electric spectrum or orbital resources.

Transport infrastructure

Rail

Mexican railway lines are owned by the government, which means that only the state can build new railway links. However, the rail service was privatized about 20 years ago dividing the country’s railways into different regions and putting them under private management through concessions for up to 50 years.

Urban rail transit

  • Mexico City Metro System – owned and operated by the Mexico City Government
  • Monterrey Metro System – owned and operated by the Government of the State of Nuevo León
  • Xochimilco Light Rail – owned and operated by the Mexico City Government
  • Guadalajara Light Rail – owned and operated by the Government of the State of Jalisco
  • Suburban Railway of the Valley of Mexico Metropolitan Area – owned by the Federal Government, built and operated by private sector company under a 30-year concession, and required the collaboration of the Federal, Mexico City, State of Mexico and municipal governments
  • Interurban Train Mexico City–Toluca (under construction) – owned by the Federal Government, in collaboration with the Mexico City Government, its construction is by private sector companies through public works contracts

Roads, bridges and tunnels

The highway system of Mexico is made up of federal highways, state highways, and rural roads. Federal highways are those that connect with roads from foreign countries, link two or more states of the Federation, and are wholly or mostly built by the Federation with federal funds or through federal concessions by individuals, states, or municipalities. State highways and rural roads are the responsibility of state governments.

Caminos y Puentes Federales de Ingresos y Servicios Conexos (CAPUFE), a government agency under the Ministry of Communications and Transportation (SCT), is in charge of the operation and maintenance of federal roads and bridges, including those under concessions granted to third parties that engage CAPUFE for such services.

Aviation

Aviation for the most part is privatized in Mexico. However, the administration, control and surveillance of airports is restricted to the federal government. There are certain public bodies (such as Aeropuertos y Servicios Auxiliares – ASA) that participate either with another authority (ie state government) or with the private sector to build, maintain and operate airports across Mexico. Other airport facilities are operated by the Ministry of Defense, the Navy and municipal authorities.

Ports

Mexican port privatization started in 1993 with a new Ports Law which dismantled the public port agency (Puertos Mexicanos) and created Independent Port Administrations (Administraciones Portuarias Integrales – APIs) at each port or group of small ports. API’s are commercial entities controlled by the federal government, the state governments, the National Tourism Fund, and in one case by private capital. Every activity related to port administration, operation and services is under supervision of the federal government, however, APIs are granted concessions for the use and management of ports and can themselves transfer rights or grant specific services contracts to private sector terminal operators in order to supply port services. The Coordinación General de Puertos y Marina Mercante, under the authority and supervision of the Ministry of Communications and Transportation, has the authority on regulation and administration of ports in Mexico.

Other infrastructure

Social infrastructure

Most of the social infrastructure is financed by federal or state governments. In particular, public hospitals, prisons and schools are managed by the Ministry of Health, Ministry of Interior, and the Ministry of Education, respectively. However, for the design, construction and maintenance, the relevant authority will enter into an agreement with the private sector through a bidding process or a public-private partnership. For social housing, in broad terms, the private sector develops the real estate projects for social housing (either by private or public funding), then employees obtain a mortgage from the National Workers' Housing Fund Institute (Instituto del Fondo Nacional de la Vivienda para los Trabajadores) (INFONAVIT) to be repaid with payroll deductions that employers make and forward to INFONAVIT, as well as mandated contributions that employers make to INFONAVIT as a percentage of each worker’s salary.

Defense

Generally, defense assets are owned by the federal government.

Waste

The waste management is the responsibility of each local government. The municipal authorities grant concessions to private companies for waste management. The private sector is responsible for the collection, management, transportation and disposal of the waste once it has obtained the concession.

Water

The main infrastructure projects such as water dams, river diversions, wastewater and waterways are controlled by the Comisión Nacional del Agua (CONAGUA), a federal body under the supervision of the Ministry of Environment and Natural Resources (SEMARNAT). The construction and maintenance of such assets can be given to the private sector through concessions. For city distribution of water and waste-water (sewerage), each city has its own government body that is in charge of the administration, maintenance and distribution to the end-user. However, there are few cities where water supply and sanitation services are provided by private companies through concessions.

Last modified 5 Dec 2019

Morocco

Morocco

Energy and power

Regarding electrical energy, it is the National Electricity Office (ONE), a public body with industrial and commercial functions, which is responsible in particular for producing and managing electricity. Subject to prior approval by the ONE and eligibility of the project, private companies may create and operate means of electricity generation. Electricity transmission is also operated by the ONE.

Regarding energy production infrastructure (hydroelectricity, renewable energy, wind power, etc.), it is owned by the private companies in charge of the various projects.

Oil and gas

Morocco's National Office of Hydrocarbons and Mines (Office national des hydrocarbures et des mines i.e. ONHYM) was created on 17 August 2005 to contribute to economic development by developing Morocco's natural oil and mining resources (excluding phosphates).

Regarding Gas distribution, this activity is carried out by private companies such as Afriquia or Akwa Group.

Telecommunications sector

A majority of the telecommunications networks are owned by private companies (Maroc télécom, Orange, Inwi). Nevertheless, the State remains, in part, the owner of part of the capital of certain companies.

The telecommunications sector is regulated and managed by the National Telecommunications Regulatory Agency (ANRT), which is a Moroccan public body.

Transport infrastructures

The railway network

Rail infrastructures are owned by the National Railway Agency (ONCF). The ONCF is responsible for operating the country's rail network and is a public body with industrial and commercial functions. It is financially independent and placed under the supervision of the Ministry of Equipment and Transport.

Highways

The Moroccan highway network is owned to a very large extent by the Moroccan State through the Moroccan Highways National Company (ADM), which is a public limited company with public capital.

ADM's capital is mainly held by the public purse and the Hassan II fund. A tiny part of the capital is held by private institutions.

Aviation

The airports are managed by the National Office of Airports (ONDA).

The aviation sector is regulated by the Directorate-General for Civil Aviation.

Other infrastructures

Social infrastructure (schools, hospitals, jails, etc.) is owned in some cases by the State.

Last modified 6 Jan 2020

Netherlands

Netherlands

Generally

The ownership of infrastructure assets in the Netherland varies according to the asset class. The main asset classes are usually considered to be:

  • economic infrastructure (energy, aviation, telecommunications, water, roads and waste); and
  • social infrastructure (education, health and justice/ prisons, housing).

Key sectors are considered below.

Energy

Pursuant to mandatory EU law requirements, gas and electricity industries in the Netherlands are privatized, with generation, transmission, distribution and supply services provided by a number of private sector companies. Entities carrying out eg transmissions services are limited in their ability to eg carry out supply services and vice versa. The relevant private sector companies own the generation, transmission and distribution assets. TenneT TSO B.V. (Tennet), a fully state-owned entity, is the sole owner and operator of the Netherlands' high voltage transmission grids.

Regional TSOs own and operate regional distribution grids supplying household and (limited) commercial consumers; Tennet distribution grids link regional grids and link the Dutch energy grid to other EU member state and Norway's distribution grid through land and marine interconnectors (eg NorNed and Britned interconnectors). For future offshore energy project purposes, Tennet has been designated the sole TSO required by law to organise, facilitate and operate offshore grids. On certain (existing) offshore projects, private entities other than Tennet may own transmission lines; Interconnector ownership is shared between participating TSOs such as National Grid and Tennet in case of Britned.

In certain instances, including on major energy infrastructure, projects may be procured by the public sector and depending on the terms of the procurement, the asset may either be publicly or privately owned.

From a public policy perspective and in accordance with international agreements entered into by the Netherlands among other parties, there is an impetus towards sustainable power generation instead of fossil fuel power generation which is embodied mostly in direct subsidies and grants (SDE+) and partly (for smaller scale projects) via local tax incentives.

The Netherlands Authority for Consumers and Markets (ACM) is the principal body with responsibility for regulation of the energy sector in the Netherlands.

Telecoms infrastructure

The telecommunications networks (fixed and mobile) in the Netherlands are privately owned by a number of service providers.

The Netherlands Authority for Consumers and Markets (ACM) is the principal body with responsibility for regulation of the telecommunications sector in the Netherlands.

Transport infrastructure

National rail

The Dutch Railway Act determines the roles, responsibilities and authorizations of the parties involved in rail transport (government, infrastructure management, transport companies and supervisory bodies). The Dutch government legally owns the railway track.

Dutch Railways (NS) is the largest national passenger rail transport company in the Netherlands and all its shares are held by the Dutch State, with more than 1 million travelers per day and approximately 4,800 train journeys on the Netherlands' 2,100 kilometers of railways. To do so, NS has almost 3,000 railway cars with seating for more than 260,000 passengers. NS is also responsible for the commercial exploitation of 380 stations not owned by the company.

NS does not operate trains on all of the railway lines in the Netherlands. Regional governments are currently responsible for many regional and urban rail services, which are not part of the main railway network. Other companies provide passenger rail services on 14 railway lines with a total of almost 700 kilometers of track: eg Syntus, Arriva, Connexxion, DB Regionalbahn Westfalen and Prignitzer Eisenbahn.

Cargo rail operators use the same Dutch railway network as well. Deutsche Bahn subsidiary Railion is the predominant cargo rail operator in The Netherlands.

ProRail, a private company whose sole shareholder is the Dutch State, is responsible for construction, maintenance and management of the Dutch rail network, including all relevant facilities such as tunnels, overpasses, overhead power lines, signals, switches and stations, on behalf of the national government. ProRail also allocates capacity on the rail network and is responsible for rail traffic control.

The Human Environment and Transport Inspectorate, Rail and Road Transport unit (Inspectie Leefomgeving en Transport), monitors the safety of the rail transport system on behalf of the national government.

Light rail

Light rail tracks are mostly owned by the local public sector. Private companies in general own the trams and subway cars. For example, the Municipality of Amsterdam owns the track and supporting infrastructure in Amsterdam, while trams, tubes and busses are owned by a private company, GVB Activa B.V.

Aviation

Aviation in the Netherlands is privatized. With regards to airport infrastructure, there are a mixture of ownership structures including private ownership, (local) government ownership and various forms of public-private ownership. All models are regulated by the Dutch government and the Dutch Civil Aviation Authority.

Ports

The Port of Rotterdam (which is Europe's largest port and operated by an unlisted public limited company held 70% by the Rotterdam Municipality and 30% by the Dutch government) and the Amsterdam Port Region (a separate entity) whose shares are held by the Amsterdam Municipality are the largest ports in The Netherlands with access to both sea and inland waterways. Both have official designated tasks in relation to eg nautical safety but also manage the use of the harbors. Port operations (ie cargo handling, storage, loading and unloading) are handled by the private sector.

Other infrastructure

Social infrastructure (schools, hospitals, emergency services centers/prisons)

Typically, these are owned by the public sector with the exception of Social Housing projects (please see below) with the private sector's responsibility being for any or all of the design, build, financing, operation and maintenance of the infrastructure. The majority of social infrastructure assets in the Netherlands are directly financed by the government.

Education

School infrastructure ownership may vary; while primary and secondary school legislation is based on the premise that school boards (either separate entities or municipal authorities) are owners of school buildings and premises this legislation does not prohibit third party ownership. These distinctions also affect the course of effects after the termination of the use of a building as a school; if the building construction costs were paid from a municipal budget, in principle title of ownership of the building will revert to the municipality.

Hospitals

Ownership of public hospitals is mostly held by public sector bodies

Social housing

This is a diverse sector involving many different organizations and individuals including housing developers, building contractors, mortgage lenders, local authorities, housing associations, landlords, owner-occupiers, private renters and those in the social rented sector. Typically, on a social housing project, housing associations own the relevant housing stock. Although housing associations tend to be private limited companies their governance is constrained by public sector regulation and, effectively, operate as quasi-public sector entities.

Defense

Typically, defense assets are owned by the public sector.

Waste

While municipalities operate waste collection facilities, many waste treatment or collection facilities are operated also by the private sector, who would be responsible for design, build, operation or maintenance of the facility. Certification and registrations in addition to material environmental law requirements apply in relation to any operations involving waste, in order to ensure proper handling of waste.

Water

Water and wastewater services in the Netherlands are delivered by enterprises whose tasks and obligations are statutorily set and whose business operation is subject to statutory requirements and administrative monitoring, which own the relevant infrastructure assets. The Water Boards and the Directorate-General for Public Works and Water Management are responsible for safeguarding and quality of surface water. The Water Boards and the Province manage groundwater. According to the Drinking Water Act, all these parties are collectively responsible for the protection of the Netherlands' water resources.

Last modified 6 Dec 2019

New Zealand

New Zealand

Generally

The extent of public and private infrastructure ownership varies significantly between the five key infrastructure sectors in New Zealand: energy, telecommunications, transport, water and social sectors.

Each of these sectors is considered below.

It is also worth noting that in 2019 New Zealand created its own Infrastructure Commission. A new independent infrastructure body, the New Zealand Infrastructure Commission - Te Waihanga, has been established to ensure that New Zealand gets the quality infrastructure investment needed to improve its long-term economic performance and social wellbeing. It is not a delivery vehicle.

Energy

Five major companies generate 95% of New Zealand's electricity (and also themselves, or through related entities, sell electricity at retail). Three of these companies have mixed public/private ownership, with the Crown holding a majority stake. The remaining two major electricity-generating companies are privately-owned.

Transpower New Zealand Limited owns and operates the national electricity transmission infrastructure (the ‘national grid’) and is a state-owned enterprise. There are 29 distribution companies which own the lines connecting consumers to the national grid. These companies and their assets are owned by a mix of publicly listed companies, shareholder co-operatives, community trusts and local government.

Distributors' arrangements with retailers permit retailers to provide consumers with electricity via the distributor's lines. Retailers are privately owned – except for the three large 'gentailers' in which the Crown holds a majority share.

With the exception of one company (Genesis Energy Limited), gas and oil assets at the production, wholesale, transmission and distribution levels are owned by private sector companies.

The Electricity Authority regulates the electricity industry and the Gas Industry Company regulates the gas industry. Electricity transmission, some electricity distribution businesses and gas pipeline businesses are subject to Commerce Commission (New Zealand's competition and consumer law regulator) price-quality regulation.

Telecoms infrastructure

 

Telecommunications infrastructure is largely privately owned. Historically, fixed-line broadband and telephone services are mostlyhave been provided through copper-based networks, although fiber-based services are now increasingly common with the government's ultra-fast broadband initiative aiming to achieve 87% national coverage by 2022 (significant additional rural broadband and mobile coverage will also be deployed around New Zealand between 2019 and 2023 due to the expansion of the rural broadband initiative phase two/mobile black Spots fund (RBI2/MBSF) programme. Chorus, a private-sector company specifically regulated by the Telecommunications Act 2001, owns and operates the copper network on an open-access basis for retail service providers. Mobile services are wholly provided by the private sector.

As noted above, the government has invested heavily in building an ultra-fast broadband fiber (UFB) network. Crown Infrastructure Partners (CIP), a Crown-owned company, is responsible for managing the UFB network on the Crown's behalf.

Telecommunications providers are regulated by the Commerce Commission.

Transport infrastructure

Roads

Almost all roads in New Zealand are publicly owned. The State Highway network, which connects towns and cities, is managed on behalf of central government by the New Zealand Transport Agency (NZTA). Local roads are owned and managed by local government in association with NZTA.

Roads and other land transport infrastructure are funded through the National Land Transport Fund, which is administered by the NZTA. The NZTA makes funding decisions in accordance with national and regional land transport plans. NZTA commonly outsources work on state highways to private sector suppliers.

Aviation

Airports vary considerably in scale and utilization. New Zealand has eight civil airports designated by the New Zealand Customs Service to receive international flights, five of which have regular scheduled international services. 26 airports receive regular domestic services.

Most airports are owned by local government, while some have part ownership by central government or the private sector. Auckland International Airport is owned by Auckland International Airport Limited, a company listed on the New Zealand and Australian stock exchanges. The Auckland City Council retains a 22% ownership in the airport.

Airways New Zealand, a state-owned enterprise, provides air navigational infrastructure.

Aviation capacity is provided by the approximately 26 domestic and 20 international passenger carriers which operate in New Zealand. This infrastructure is for the most part privately provided. Air New Zealand, the national airline, carries approximately 80% of domestic traffic and 40% of international traffic. Air New Zealand is listed on both the New Zealand and Australian stock exchanges, while the Crown retains a 52% ownership.

Rail

KiwiRail, a state-owned enterprise, owns and controls the rail tracks, associated infrastructure and rolling stock. The rail corridor is technically owned by New Zealand Railways Corporation (also a state-owed enterprise) with KiwiRail licensed to manage the land for a nominal fee.

Wellington and Auckland are the only cities in New Zealand with metropolitan rail services. The metropolitan rolling stock is owned by the respective local government organizations, each of whom contracts the operation of its passenger rail services to the private sector. Transdev is currently contracted to operate both the Wellington and Auckland passenger rail services.

Shipping and ports

New Zealand has 16 ports servicing both domestic and international movements. Many are 100% owned by local government, while others have part private ownership.

KiwiRail owns and operates the Interislander, a passenger and freight ferry service connecting the North and South Islands of New Zealand. The Interislander competes with Bluebridge, a private sector company also offering freight and passenger service between the two islands.

Other infrastructure

Education

School infrastructure ownership varies among the three types of school: state school, 'state-integrated' school and private school. State schools are entirely owned and funded by the government, with boards of trustees responsible for their governance. Private schools are entirely privately owned, typically by a trust, and are not required to offer the national curriculum.

State-integrated schools are former private schools which are regulated like state schools (for example, they follow the national curriculum) but the ownership of school land and buildings is retained by the private owners. Representatives of the private owners sit as trustees on the school's board of trustees.

Historically, opportunities have existed for investment in education infrastructure through New Zealand's Public-Private Partnership (PPP) program (although, at the time of writing, the current Labour-led government has ruled out PPPs in the social infrastructure space). In the New Zealand context, a PPP is a long-term contract for the delivery of a service, where provision of the service requires the construction of a new asset, or enhancement of an existing asset, that is financed from external (private) sources on a non-recourse basis, and full legal ownership of the asset is retained by the Crown.

PPP contracts in the education sector have typically involveinvolved the Ministry of Education engaging a private partner to design, finance, build and maintain a particular school. The Crown still owns the land and buildings.

 

Hospitals

New Zealand has both a public and private healthcare system. Public hospitals are owned by District Health Boards, who receive central government funding and are responsible for providing and funding health services in their district. Private hospitals are owned and operated by private owners, typically trusts or companies.

Social housing and housing related infrastructure

Social housing in New Zealand is provided by a combination of central government (through Kāinga Ora), local government and private sector Community Housing providers.

Created in 2019, Kāinga Ora brings together the people, capabilities and resources of the Government's KiwiBuild Unit, Housing New Zealand and its development subsidiary HLC. This change has been designed to enable a more cohesive and joined-up approach to delivering the government's priorities for housing and urban development in New Zealand. These priorities include addressing homelessness and making homes more affordable for New Zealanders.

Kāinga Ora has two key roles:

  • being a public housing landlord; and
  • partnering with the development community, Māori, local and central government, and others on urban development projects of all sizes.

At the time of writing, new Infrastructure Funding and Financing (IFF) legislation has been recently introduced to Parliament with bi-partisan support. IFF is a new, user-pays tool for funding local roading and water infrastructure. Crown Infrastructure Partners is expected to play a major role in facilitating investment and projects using this legislation.

Water

Much of New Zealand's water infrastructure is used for agricultural purposes. According to the World Bank, 74% of New Zealand's fresh water withdrawals go towards agriculture. Ownership of agricultural irrigation infrastructure varies. Many irrigation projects are owned by farming co-operatives with varying degrees of investment from local government. Historically central government has played a role in accelerating the development of rural water infrastructure projects through the Irrigation Acceleration Fund (although, this fund was closed by the Labour-led government in 2019).

Domestic water supply infrastructure is owned by local government. Many local authorities directly manage the supply of drinking water, while others contract out the operational and maintenance services.

At the time of writing, the government is in the process of creating an independent water body to regulate drinking water in New Zealand (noting this is a quality, rather than an economic, regulator).

Last modified 13 Dec 2019

Norway

Norway

Generally

Generally speaking, Norway has been reluctant to open up to the privatization of core infrastructure; and most transport infrastructure, the electricity grid and large hydropower production assets are publicly owned. Telecoms infrastructure, apart from the emergency network is generally privately owned and operated. Whilst ownership may be private, owning and/or operating relevant infrastructure will in most cases be subject to authorizations and concessions.

Energy

There are no restrictions on private ownership of energy assets, apart from 'large' hydropower assets (above 10MW) that must be at least two thirds publicly owned and controlled. Whilst ownership may be private, owning and/or operating relevant energy infrastructure will in most cases be subject to special authorizations and government concessions.

Statnett SF is the state-owned enterprise responsible for building and operating the central grid. Statnett SF is the transmission system operator (TSO) for the central grid and owns more than 90% of it.

The Ministry of Petroleum and Energy (MPE) has the overall responsibility for managing the energy and water resources in Norway. The MPE's job is to ensure that this management is carried out according to the guidelines provided by the Storting and the Government. The Ministry’s Energy and Water Resources Department has ownership responsibility for Statnett SF.

The Norwegian Water Resources and Energy Directorate (NVE), which reports to the MPE, is responsible for managing domestic energy resources, and is also the national regulatory authority for the electricity sector. The NVE is also responsible for managing Norway’s water resources.

The total length of the Norwegian gas pipeline network is about 8,300 kilometres. Most of the gas transport infrastructure is jointly owned through the partnership Gassled, while Gassco is the neutral and independent operator.

Gassled is a private joint venture that owns most of the gas infrastructure on and serving the Norwegian continental shelf (including pipelines, platforms, onshore processing plants and receiving terminals abroad).

The Norwegian gas transport infrastructure includes several receiving terminals in other countries. Norway and those countries where gas from the Norwegian shelf is landed have concluded agreements regulating their rights and obligations in this connection.

Telecoms infrastructure

Telecoms infrastructure, apart from the emergency network, is generally privately owned and operated.

The electronic communications sector in Norway is regulated through both sector-specific and general laws and regulations. Although not a EU member, Norway is required, as a member of the European Economic Area (EEA), to adhere to the EU’s regulatory framework to the extent that EU directives are adopted by the EEA pursuant to the Agreement on the European Economic Area. The Electronic Communication Act (the ECA) and regulations adopted pursuant to the ECA implement the EU regulatory framework for the electronic communications sector in Norway. The competent regulatory authority in Norway is the Norwegian Communications Authority.

Transport infrastructure

Transport infrastructure such as road and rail networks (and related infrastructure) are publicly owned.

Norway has approximately 98 airports. Of these, 45 are owned by the government through its airport operator, Avinor. Airports used only for general aviation (GA) are owned by a mix of municipalities, aviation clubs and private companies.

Public (sea) ports are generally municipally owned, with limited private ownership interests in isolated instances.

The main governing body in respect of transport infrastructure is the Norwegian Ministry of Transport and Communications, which performs operations through numerous subsidiaries. Tasks related to public transport and some roads have been delegated to the counties and municipalities.

Last modified 20 Oct 2017

Peru

Peru

Generally

Private entities are entitled to invest in Peruvian energy and infrastructure projects. Based on the location and the regulatory framework, these projects may be:

  • national projects;
  • regional projects; and
  • local projects.

Furthermore, these projects may be part of different sectors such as energy, aviation, rail, telecommunications, water, roads, waste, transport, education, health and justice/prisons.

Energy

Part of the electricity industries in Peru are privatized, with the generation, transmission, distribution and supply services provided by a number of companies of the private sector. Thus, all transmission activities in Peru are developed by private companies and the generation and distribution assets are owned by different public and private companies.

Regarding the transmission system, the National Interconnected Electrical System (Sistema Eléctrico Interconectado Nacional, or SEIN), is in charge of the operation of the transmission network in Peru. This system interconnects most of the transmission lines in three geographical areas (north, central, and southern regions). However, there are also ‘isolated’ systems, not linked to the SEIN, which cover the rest of the country and are owned by private sector companies.

The private sector finances and delivers most of the required infrastructure but there are a number of government policy mechanisms (adopted through legislation) which are used to promote investment in eligible energy generation technologies. In certain instances, including on major energy infrastructure, projects may be procured by the public sector and depending on the terms of the procurement, the asset may either be publicly or privately owned.

The Ministry of Energy and Mines is the main body with responsibility for regulation of the energy sector in Peru. The relevant regulatory authority responsible for ensuring the quality and efficiency of service provided by private companies in the energy market is the Supervisory Agency for Private Investment in Energy and Mining (Organismo Supervisor de la Inversión en Energía y Minería, or OSINERGMIN).

Telecoms infrastructure

The telecommunications networks in Peru have been privatized to a number of private companies which provide telecommunications services. All the companies that provide telecommunications services are heavily regulated by government.

The Ministry of Transport and Communications (MTC) is the main authority of the Peruvian telecommunications sector. It also has responsibility for wireless communications services. Further, the Supervisory Agency for Private Investment in Telecommunications (Organismo Supervisor de la Inversión Privada en Telecomunicaciones or OSIPTEL), is the regulatory authority created to ensure the quality and efficiency of service provided in the telecommunications market.

Transport infrastructure

Light rail

The only light rail system in Peru is located in Lima. Typically, rail assets (such as trams and associated track) are owned by the national public sector. However, the first light rail system project in Peru has been outsourced to a private sector company which is currently running a concession. The Ministry of Transport and Communications (as the main authority in the sector) has projected the development of more lines in Lima and in other cities thereafter.

Heavy rail

The rail market in Peru involves both public and private entities. The rail assets are owned by local and national public sector but certain elements of rail projects have been outsourced to the private sector, for example, the private sector may operate and maintain rail systems on behalf of the Directorate of Railways. The assets will continue, however, to be owned by the public sector.

The rail sector is regulated by the Directorate of Railways (Dirección de Ferrocarriles) which is part of the Ministry of Transport and Communications.

Roads, bridges and tunnels

A government entity, the General Directorate for Land Transport (Dirección General de Transporte Terrestre) is a nationwide agency that operates, maintains and improves the motorways and major roads in Peru and is part of the Ministry of Transport and Communications. The General Directorate for Land Transport receives funding from the government for investment in the strategic road network (including additional road capacity). Local roads in Peru are the responsibility of local authorities. The public sector may outsource the construction, operation and maintenance (sometimes on a project financed basis) of such assets to the private sector. In the case of tolled roads, the private sector has taken on roads/crossings on a full concession basis. It is responsible for the design, build, financing, operation, maintenance and collection of tolls for a number of years with the main revenue stream being the collection of toll revenues from users (rather than any service payments from the public sector). In some cases, the private sector provides toll collection services for a service fee rather than relying on those tolls as its main source of revenue.

Aviation

Airport infrastructure involves both public and private entities in the Peruvian market, national government ownership and some forms of public-private ownership. All models are regulated by government. The Civil Aeronautical Authority in Peru (Autoridad Aeronáutica Civil en el Perú) is the aviation regulator in Peru and is part of the Ministry of Transport and Communications.

Ports

The ports sector also involves both public and private entities, including local and national government ownership and some forms of public-private ownership. This sector is regulated by government and the National Port Authority in Peru (Autoridad Nacional Portuaria), part of the Ministry of Transport and Communications, is the port regulator in Peru.

Other infrastructure

Social infrastructure (schools, hospitals, emergency services centers/prisons)

Typically, these are owned by the public sector with the private's sector's responsibility being for any or all of the design, build, financing, operation and maintenance of the infrastructure. The majority of social infrastructure assets in Peru are directly financed by the government. Subject to value-for-money considerations, private finance may also be used in the procurement of social infrastructure assets. In relation to some of these specific sectors:

Education

The ownership of a school's infrastructure is owned by the Ministry of Education. The current program for new schools is through the ‘National Program of Educational Infrastructure’ (Programa Nacional de Infraestructura Educativa), delivering schools either through a traditional construction procurement or on a project-financed basis. This program seeks to develop infrastructure on three fronts: (i) high-performance schools (Escuelas de Alto Rendimiento), (ii) schools in risk areas (Escuelas en Riesgo) and (iii) Institutes of High Technical Education (Institutos Superiores Técnicos).

Hospitals

Ownership of hospitals is vested in various public sector bodies that are part of the national government (such as the Ministry of Health of Peru and Social Security System (ESSALUD), or local authorities (such as Hospitales de la Solidaridad or Regional Hospitals).

Defense

All defense assets are owned by the public sector.

Waste

The public sector procures new waste treatment or collection facilities and these are owned by the public sector even if the private sector is responsible for design, build, operation or maintenance of any given facility. Those waste treatments and collection facilities are owned by local authorities, which have competence to regulate all of the activities connected to such facilities. In the past few years, some private initiatives have been proposed to public authorities with regard to waste systems. However, such systems have not been successful due to the lack of clear regulation in connection with waste activities.

Water

Water and wastewater (sewerage) services in Peru are delivered mostly by public sector companies (water companies) which own the relevant infrastructure assets and are located in each region of the country. For example, Servicio de Agua Potable y Alcantarillado de Lima (SEDAPAL) is a public company that provides water and wastewater services in Lima. Nonetheless, the public sector may outsource the construction, operation and maintenance (sometimes on a project financed basis) of such assets to the private sector. The National Sanitation Services Supervisory (SUNASS) is the regulator of the water sector in Peru and its functions are to establish norms, supervise providers, approve tariffs and resolve controversies and complaints, among other responsibilities.

Last modified 5 Dec 2019 | Authored by DLA Piper Pizarro Botto Escobar

Poland

Poland

Generally

Most of the energy and infrastructure assets are publicly owned by local government bodies, government bodies, or state-owned companies.

Key sectors are considered below.

Energy

The gas and electricity industries in Poland are generally run by state-owned companies. Most of the generation, distribution and supply services are provided by six main companies, the biggest five of which are publicly listed but controlled by the State Treasury. All transmission assets are state-owned and cannot be purchased by private investors.

The oil industry is mainly run by two publicly listed companies that are controlled by the State Treasury. In the field of selling oil to consumers there are many private companies, including international groups.

The Energy Regulatory Office is the principal body with responsibility for regulating the energy sector in Poland.

Other infrastructure

Telecoms

Telecommunications networks in Poland are privately owned by a number of companies, including service providers.

Postal services are mainly run by the state-owned company Poczta Polska, but there are also private companies operating in this sector.

The Office of Electronic Communications is the regulator of the Polish post and telecommunications sectors.

Rail

Typically, light rail assets (such as trams and associated track) are owned by local public transport authorities. Certain elements of light rail projects may be outsourced to the private sector. Heavy rail infrastructure in Poland is mostly owned by the state-owned Polskie Koleje Państwowe (PKP) Group. The exceptions are the railway electrification grid and railway sidings, which are owned by private entities.

The rail sector is regulated by the Office of Rail Transport.

Roads

Roads, bridges and tunnels are owned by the state or by local authorities. The public sector may outsource the construction, operation and maintenance of some assets to the private sector.

Some motorways are privately owned and their functioning is heavily regulated.

Aviation

The main aviation infrastructure in Poland is mostly indirectly owned by the state or by local authorities. Services connected with the functioning of airports are partly provided by private entities. Air carriers are both state-owned and private. All aviation activities are heavily regulated. The Civil Aviation Authority is the aviation regulator in Poland.

Ports

The main port infrastructure is mostly indirectly owned by the state or by local authorities. Additional infrastructure such as warehouses is also owned by private entities.

Hospitals

Most hospital infrastructure is owned by public bodies. Some hospitals are private and their activities are heavily regulated.

Education

Most schools are owned by local authorities, but there are also private schools. Higher education in Poland is generally provided by the state but there are many private entities.

Warehouses

Warehouses are mostly owned by private entities and operate on a commercial basis.

Defense

Typically, defense assets are owned by the Polish Armed Forces. Some manufacturers of defense-related products are state-owned and some are private.

Waste

The waste sector (waste services and waste infrastructure) is indirectly owned by local authorities and by private companies.

Water

Rivers are treated as public property, not as commercial goods, and are maintained by the state and local authorities. Water services (including sewerage), depending on the town, are provided by private sector companies or local authorities.

Last modified 6 Dec 2019

Portugal

Portugal

Generally

The ownership of energy and infrastructure assets in Portugal varies according to the asset class. The main asset classes are usually
considered to be:

  • economic infrastructure (energy, aviation, rail, telecommunications, water, roads and waste); and
  • social infrastructure (education, health and justice/prisons and housing).

Key sectors are considered below.

Energy

The gas and electricity industries in Portugal are privatized, with the generation, transmission, distribution and supply services provided by a number of private sector companies. The relevant private sector companies own the generation, transmission and distribution assets.

The energy sector has been a liberalized sector in Portugal since 2012, although the law has provided for a temporary transitionary regulated regime. According to official data, the liberalized electricity market covered more than 4.7 million clients at the end of 2016 and both the liberalized electricity and gas tariffs amounted to approximately 91% of total electricity and gas consumption in Portugal. The transitionary regulated tariffs have been decreasing over the years. Entidade Reguladora dos Serviços Energéticos (ERSE), the Portuguese regulator for the energy sector now only determines energy tariffs for the system tariffs (eg use of grids and infrastructures) and the transitionary regulated consumer tariffs. This liberalization of consumer energy tariffs boosted free competition and the emergence of various retail energy sellers which has in turn provided a greater choice for consumers.

Telecoms infrastructure

The telecommunications networks (fixed and mobile) in Portugal are privately owned by a number of service providers. Autoridade Nacional de Comunicações (ANACOM) performs a dual role, as:

  • the regulator of the Portuguese communications sector, regulating all electronic and postal communications; and
  • as an independent administrative body of the Portuguese government.

Transport infrastructure

Autoridade da Mobilidade e dos Transportes (AMT) performs a dual role as:

  • the regulator of the Portuguese transportation sector, supervising inland, fluvial transportation and railways, also the economic activity of trading ports and maritime transports; and
  • an independent administrative body of the Portuguese government.

Light rail

Typically, light rail assets (such as trams and associated tracks) are owned by local public sector promoting bodies. For example, Carris owns and operates the trams and supporting infrastructure in Lisbon. Metro de Lisboa owns and operates the metropolitan transport network in the Lisbon area. Outside of Lisbon there are a number of private companies operating supporting bus lines.

Heavy rail

The heavy rail market in Portugal is operated by both private and public companies. Most of the Portuguese railway lines are operated by publicly owned companies, although there are some significant lines operated by private companies.

Roads, bridges and tunnels

A state-owned company is responsible for designing, building, financing, exploring, preserving, requalifying and modernizing the motorways and railways across Portugal. It is supervised by the Ministry of Housingand Infrastructure and the Ministry of Finance.

Ports AND AIRPORTS

Ports are operated by private companies.

The aviation sector is regulated by Autoridade Nacional da Aviação Civil (ANAC) and it is composed of both privately and publicly owned companies. Portuguese airports are operated by private companies, some under a concession scheme.

Other infrastructure

The majority of social infrastructure assets (schools, hospitals, defense) in Portugal are directly financed by the State of Portugal. Subject to value-for-money considerations, private finance may also be used in the procurement of social infrastructure assets.

In relation to some of these specific sectors:

Education

Education establishments may be owned by public or private entities or a mixture of the two.

Hospitals

Ownership of hospitals may be both public or private (or public-private partnerships). The regulatory authority for the health sector in Portugal is Entidade Reguladora da Saúde (ERS).

Defense

Typically, defense assets are owned by the public sector.

Last modified 6 Dec 2019

Puerto Rico

Puerto Rico

Generally

The ownership of energy and infrastructure assets in Puerto Rico varies according to the asset class. The main asset classes are usually considered to be:

  • economic infrastructure (e.g. energy, aviation, rail, telecommunications, water, roads and waste); and
  • social infrastructure (e.g. education, health and justice/prisons, and housing).

Key sectors are considered below.

Energy

Energy in Puerto Rico is principally generated by the Puerto Rico Electric Power Authority (PREPA), a government instrumentality of the Commonwealth of Puerto Rico. PREPA is the largest public utility in the US. Given the financial challenges facing PREPA, including the looming default of its debt obligations and its restructuring, the government has issued a request for proposals (RFPs) for the privatization of the transmission of energy and is scheduled to issue and RFP for generation of electricity in the first quarter of 2020.

Telecoms infrastructure

Currently, the Puerto Rico Telephone Company (PRTC), the principal provider of telephone services in Puerto Rico, is privately owned by America Movil from Mexico (a company owned by Carlos Slim). At one moment in time, the Commonwealth of Puerto Rico owned and controlled the PRTC but later sold it to GTE/Verizon, who later sold it to America Movil. There are other telephone services providers in Puerto Rico, but all are currently private. There are plans for a subsidiary of PREPA to offer telephone and internet services through PREPA Net, but that service is not up and running in the public market yet.

Transport infrastructure

The main airport in Puerto Rico, the Luis Muñoz Marín International Airport (LMM Airport), was leased for a term of 40 years to Aerostar Airport Holdings, LLC through a public-private partnership (P3) on 26 February 2013. Aerostar is a private operator of the airport and is a venture from Mexico (60% ASUR) and Canada (40% Public Pensions Plans of Canada). All other port facilities, including other regional airports and maritime ports are government owned. The Commonwealth of Puerto Rico has indicated that they will be issuing RFPs for P3 projects related to the regional airports and the maritime ports.

Similarly to what happened to the LMM Airport, the Puerto Rico Highways and Transportation Authority entered into an Operation and Maintenance Agreement with Metropistas de Puerto Rico related to the PR-22 and PR-5 highways in the north of Puerto Rico. Metropistas is a joint venture between Goldman Sachs & Co. and Abertis from Spain. In addition to this P3, the Teodoro Moscosso Bridge is also operated by an affiliate of Abertis. The rest of the highway and transportation network in Puerto Rico is publicly owned and operated. The Commonwealth of Puerto Rico has indicated that they will be issuing RFPs for P3 projects related to the highways and transportation infrastructure.

Other infrastructure

All other economic infrastructure is owned and operated by the government government (subject to ongoing negotiations with private parties to operate (i) Puerto Rico’s regional airports and ferry systems and (ii) the San Juan Cruise Terminal). Social infrastructure is a mixture of government and privately owned and operated projects.

Last modified 11 Dec 2019

Romania

Romania

Generally

The ownership of energy and infrastructure assets in Romania varies as follows:

Oil and gas

The oil and gas industry is privatized especially in the sectors of oil and gas downstream and upstream. Most of the assets in the oil industry are privately owned, except those which are included in the public domain such as: underground resources, energy transmission assets, oil and gas pipelines, water storages and dikes.

The gas midstream is owned by the Romanian state through the national company Transgaz.

Electricity

Most of the companies involved in the generation, transmission and distribution of electricity are state owned (as either majority or full owner) and some of them are listed on the Bucharest Stock Exchange. However, the regional electricity companies which supply electricity to the off takers are privatized.

ANRE (National Authority for Regulation in the Energy Field) is the regulatory and supervision authority in the electrical energy and gas field and OPCOM is the administrator of the electrical energy market.

Telecoms infrastructure

The telecommunications networks (fixed and mobile) in Romania are mostly privately owned by a number of international and local service providers. Certain assets – such as frequency spectrums and the telecommunication transportation and distribution networks – are in the public domain.

ANCOM (National Authority for Administration and Regulation in Communication) is the administration authority of the communication market.

Transport infrastructure

Light rail

Typically, light rail assets (such as trams) are owned by local public sector. The Bucharest underground infrastructure, network and trains are owned by the Romanian state through the Ministry of Transport.

Heavy rail

The rail network and infrastructure in Romania is owned by the Romanian state. There are only few small companies which operate trains on some rail routes, especially commercial trains.

The rail sector is regulated by the Office of Rail and Road (ORR).

Aviation

While the operators are both publicly or private owned, the airports infrastructure is owned by the Romanian state.

Other infrastructure

Social infrastructure (schools, hospitals, emergency services centers/prisons)

Typically, these are owned by the public sector with the exception of few hospitals and schools which are in the private sector.

Defense

Defense assets are owned by the public sector.

Waste

While in few municipalities facilities such as landfills, collection and transportation of the waste are in the private sector, the local public entities are still operating such facilities in most of the cities.

Last modified 20 Oct 2017

Russia

Russia

Generally

The ownership of energy and infrastructure assets in Russia varies according to the asset class. Some publicly owned energy and infrastructure companies are still pending privatization in accordance with the relevant government plans.

Federal Law 'On the Procedure of Foreign Investment in Business Undertakings Strategically Important for National Defense and State Security of the Russian Federation' sets out the conditions and procedures allowing the Russian government to restrict, on a case-by-case basis, the right of foreign investors to take control of, or gain influence over, or acquire assets of companies engaged in some activities deemed strategically important for Russia's national defense or security. Some activities in the sphere of energy and infrastructure may fall into this category.

It should also be noted that in Russia the state owns the mineral resources in subsoil until they are extracted. The right to the extracted natural resources could be in any form of ownership depending on the entity exploring and developing subsoil in Russia under the relevant subsoil license.

Energy

As a result of reform, the electricity industry in Russia is partially privatized. The public joint-stock company 'The System Operator of the Unified Energy System', which is owned by the Russian Federation, exclusively performs centralized administration of the Unified Energy System of Russia. The electricity network companies are also owned by the state. However, generation and retail companies are now open to private (including foreign) investors.

The most significant participant of the gas industry in Russia is the public joint-stock company 'Gazprom' which is partially owned by the state. It has a monopoly to export pipeline gas, while the export of liquid gas is also allowed by some other companies.

Telecoms infrastructure

Under Federal Law 'On Communications', telecommunication networks and devices may be either public or private. At present, there is no particular law that lists the telecommunication networks and devices that may only be owned by the state although such a law may come into existence. In practice, telecommunication infrastructure is owned by several service providers.

Transport infrastructure

Rail

The railroads in Russia are mainly owned and operated by the public joint-stock company 'Russian railroads', which is publicly owned. There are also railroads owned by private companies in remote areas which are used primarily for local cargo transportation.

Roads

The roads (including construction elements placed on or over them, such as bridges or tunnels) in Russia are generally publicly owned. Private ownership is possible if a road is built by individuals or companies using their funds on land plots which have been provided to them specifically for these purposes, or where the roads are otherwise transferred into private ownership in accordance with Russian law.

Aviation

Aviation is (for the most part) privatized.

Ports

Certain elements of the ports infrastructure may only be publicly owned, such as approach channels or navigation equipment. Some infrastructure facilities which were produced or acquired using the funds of legal entities or individual entrepreneurs may be privately owned.

Other infrastructure

Education

Ownership of a school's infrastructure depends upon which category of school it belongs to. In respect of state and municipal educational organizations, their educational, production and social infrastructure cannot be privatized.

Defense

Typically, defense assets are owned by the state.

Waste

The waste treatment infrastructure in Russia is mainly privately owned.

Water

Water infrastructure in Russia is owned by the state, with limited exceptions for certain types of infrastructure.

Last modified 5 Dec 2019

Singapore

Singapore

Generally

Steady progress has been made in Singapore over the last few years in terms of privatization. Significantly, there has been a big leap in energy sector privatization. Notably, in recent years, there has been a rise of public-private partnership (PPP) projects, which involve collaboration between various types of private sector companies and the public agency.

Energy

Since 1995, the power system assets have been structured to facilitate commercialization and subsequent privatization. As at the end of December 2008, the Singapore Government’s investment arm, Temasek Holdings (Private) Limited, had divested Singapore’s three main power generating companies, representing a big part of the transition towards a fully liberalized power market in Singapore.

The Energy Market Authority (EMA) was established in 2001 as part of the government’s efforts to liberalize the electricity market. As a regulator, the EMA also ensures a reliable and secure energy supply and promotes effective competition.

Telecoms infrastructure

The telecommunications networks (fixed and mobile) are all privately owned.

In January 2000, the Singapore Government decided to advance the introduction of full market competition in the telecommunications sector.

Transport infrastructure

Singapore currently adopts a privatized approach for transport infrastructure. Singapore’s land transport authority, the Land Transport Authority (LTA), regulates and oversees all three main modes of public transport in Singapore, ie taxis, buses and trains, and ensures that they meet safety and service standards. However, the day-to-day operations of running the MRT train systems, bus systems and taxi services are the responsibility of private operators.

The day-to-day operations of running the MRT train systems are the responsibility of two main public transport operators in Singapore, SMRT Trains Ltd and SBS Transit. These operators are responsible for the daily operations of trains and their maintenance. The main bus operators in Singapore include SBS Transit Ltd, SMRT Buses Ltd, Tower Transit Singapore and Go-Ahead Singapore. Bus operations are regulated by the Public Transport Council (PTC). There are currently seven taxi operators in Singapore, which are regulated by the LTA.

Other infrastructure

While most of the attention has been focused on privatization in the energy markets, the water and waste industries have also made significant progress in reaching out to the private sector for progress. For example, design, build, finance and operate (DBFO) desalination and NEWater projects have formed the backbone of the Public Utilities Board’s (PUB) existing procurement strategy for private sector participation in new capital works.

Last modified 20 Oct 2017

Slovak Republic

Slovak Republic

Generally

The ownership of energy and infrastructure assets in Slovakia varies according to the asset class. The main asset classes are usually considered to be:

  • economic infrastructure (energy, aviation, rail, telecommunications, water, roads and waste); and
  • social infrastructure (education, health and justice/prisons, housing).

Key sectors are considered below.

Energy

The gas and electricity industries in Slovakia are partially privatized, with the generation, distribution and supply services provided by a number of private sector companies. The relevant private sector companies own the generation and distribution assets.

The Regulatory Office for Network Industries, as the national regulation authority, performs its tasks pursuant to Act No. 250/2012 Coll. on regulation in network industries, as amended and determines the relevant prices and conditions of their application in network industries, as well as the conditions for the regulated activities performance. The Regulatory Office for Network Industries is a state authority which is independent from state authorities, municipal authorities, other public authorities or other persons. The Regulatory Office for Network Industries shall exercise its competence fairly and independently. Within its performance it is not subject to any political or business groups.

Telecoms infrastructure

The telecommunications networks (fixed and mobile) in Slovakia are privately owned by a number of service providers.

The Regulatory Authority for Electronic Communications and Postal Services is the regulator for the telecommunications sector in Slovakia. It also regulates television broadcast services, wireless communications services as well as postal services.

Transport infrastructure

Light rail

Typically, light rail assets (such as trams) are owned by respective local municipalities by way of designated local transport companies.

Heavy rail

The heavy rail sector is mainly operated by the following three state-owned companies Železnice SR (ŽSR) – Slovak Railways, Železničná spoločnosť Slovensko a.s. and Železničná spoločnosť Cargo Slovakia a.s.

The rail sector is regulated by the Ministry of Transport and Construction of the Slovak Republic.

Furthermore, there are number of private companies such as RegioJet a.s. or Leo Express a.s. that operate railway passenger transport services in Slovakia. The arrival of a private railway carriers has started a competitive rivalry for the passengers between the private and state-owned carriers resulting in a general increase of standard of the railway transportation.

Roads, bridges and tunnels

Národná diaľničná spoločnosť a.s. (National Highway Company) is a joint-stock company that was established in 2005 and its sole shareholder is the Slovak Republic acting through the Ministry of Transport and Construction of the Slovak Republic. The main activities of the company include the building of highways and motorways, management and maintenance of motorways and highways and charging for the use of Slovak motorways and highways. The company operates in the territory of the Slovak Republic through its 15 management and maintenance centers.

A government entity, Slovak Road Administration, operates, maintains and improves the motorways and major first class roads (i.e. the strategic road network) in Slovakia. Slovak Road Administration is regulated by the Ministry of Transport and Construction of the Slovak Republic. Slovak Road Administration has its regional representation through organizational units deployed under a single name Investment Construction and Management of Roads, specifically in the following cities: Bratislava, Banská Bystrica, Žilina and Košice.

Local roads owned by the municipalities in Slovakia are the responsibility of local authorities (municipalities) or responsibility of legal entities established by the municipalities with the purpose of maintaining roads.

Aviation

Aviation in Slovakia is (for the most part) privatized. With respect to the airport infrastructure, there are airports that are owned by the Slovak Republic as well as airports that have been privatized. Aviation in Slovakia is regulated by the Transport Authority and by the Ministry of transport and construction of the Slovak republic.

The Transport Authority

The Transport Authority was established by the Act on Regulatory Authority for Electronic Communications and Postal Services and on Transport Authority in January 2014 as a state administrative body with nationwide competence in the area of railways and other guided transport, civil aviation and inland waterway transport. The Transport Authority undertakes activities in the area of railways and other guided transport, civil aviation and inland waterway transport, cooperates in the area of its competences with the Ministries and other state administration bodies, with the EU bodies as well as with a number of relevant international bodies. The Transport Authority is financed from the state budget. The Transport Authority is an independent body and state administration bodies, entities, authorities, nor any other persons may manipulate or interfere the activities of the Transport Authority.

Other infrastructure

Social infrastructure (schools, hospitals, emergency services centers/prisons)

Typically, these are mainly owned by the public sector and are regulated by the state authority depending on the type of social infrastructure. The majority of social infrastructure assets in the Slovak republic are directly financed by the government. Subject to value for money considerations, private finance may also be used in the procurement of social infrastructure assets.

Education

The ownership of a school's infrastructure can be public or private. Schools of the Slovak Republic must be included in the network of schools and registered with the Central register of the schools maintained by Slovak Centre of Scientific and Technical Information which is governed by the Ministry of Education, Science, Research and Sport of the Slovak Republic.

Hospitals

Ownership of hospitals can be public or private, both types must hold a license for operating granted by the Ministry of Health of the Slovak Republic. The regulatory authority in this area is the Health Care Surveillance Authority.

Defense

Typically, defense assets are state-owned.

Waste

The Ministry of Environment is the relevant state authority responsible for setting goals with respect to the waste management in Slovak Republic in order to develop an appropriate approach for using materials in the area of cycle, recycle, devaluation and destruction of waste.

Water

Water and wastewater (sewerage) services in Slovakia are delivered by private sector companies (water companies) which own the relevant infrastructure assets. In Slovakia, the ownership of public water and wastewater pipelines, can be only owned by legal entities with registered seat in the territory of Slovak Republic. The Regulatory Office for Network Industries is the relevant regulator of the water sector in Slovakia.

Last modified 6 Dec 2019

South Africa

South Africa

Generally

The ownership of infrastructure in South Africa is a combination of private, public (directly by government or through state-owned enterprises) and public-private partnerships. This applies to a large extent in respect of both economic infrastructure (energy, aviation, telecommunications and roads) and social infrastructure (education, health and housing).

The state has, however, maintained a near monopoly when it comes to rail infrastructure and to a large extent the corrections/prisons infrastructure (there are only two ‘privately owned’ prisons in South Africa and the South African government has stopped granting concessions to private corporations for the construction of private prisons).

Energy

Eskom Holdings SOC Limited, a state-owned enterprise (SOE) owns the bulk of the energy generation and transmission infrastructure in South Africa. The infrastructure ranges from a nuclear power plant (Koeberg Power Station in Cape Town), a hydro-electric power plant (Gariep Power Station), an open cycle gas turbine plant (Ankerlig Power Station), various coal fired power plants (such as Lethabo Power Station), a pumped storage scheme (Palmiet Power Plant) and various wind farm projects (such as Sere Power Station). Eskom is in the process of constructing a number of new coal fired power plants, the most prominent of which are Medupi Power Station and Kusile Power Station which are expected to be completed by 2021 and 2023 respectively.

In and around 2010 the government of South Africa launched a renewable energy program which saw a number of Independent Power Producers entering the energy sector and by the end of October 2016 Eskom had procured approximately 6400 MW from 102 Independent Power Producers. There have been five bid windows during which independent power producers bid for the right to set up renewable energy projects. The renewable energy projects are a mixture of wind, solar photovoltaic, biomass, biogas, and concentrated solar thermal plants.

The National Energy Regulator (NERSA) is the regulatory body tasked with the regulation of the electricity, piped-gas and petroleum pipelines industries in terms of the Electricity Regulation Act, the Gas Act and the Petroleum Pipelines Act.

The Independent Power Producer Procurement Programme is administered by the IPPPP Unit which was established by the Department of Energy (DoE), National Treasury and the Development Bank of Southern Africa (DBSA) for the purposes of delivering on the Independent Power Producer procurement objectives.

Telecoms infrastructure

Ownership of infrastructure in telecoms is also a combination of private and public (through an SOE) ownership. Telkom SA SOC Limited owns the bulk of the wireline telecommunications infrastructure and also owns a sizeable portion of the wireless telecommunications infrastructure. Wireless telecommunications infrastructure is mostly privately owned, with Vodacom and MTN being the largest players in this space.

The Independent Communications Authority of South Africa (ICASA) is the regulator for the South African communications, broadcasting and postal services sector. It was established in terms of the Independent Communications Authority of South Africa Act.

Transport infrastructure

Rail infrastructure

Transnet SOC Limited, through its Transnet Freight Rail division (Transnet Freight Rail), controls the heavy rail infrastructure sector and owns the majority of South Africa's extensive national rail network, representing approximately 80% of Africa's total rail network as well as rolling stock.

The Passenger Rail Agency of South Africa SOC Limited (PRASA), an SOE, controls the passenger rail sector and owns a portion of South Africa's national rail network through its Metrorail and Mainline Passenger Service divisions.

The Bombela Concession Company (RF) Proprietary Limited owns and operates the Gautrain rapid train service which services commuters from Sandton to O.R Tambo Airport and Pretoria to Park Station (Johannesburg CBD). The Bombela consortium is owned by private shareholders.

Road transport infrastructure

Ownership of the road network is held by the state (through the South African National Roads Agency SOC Limited (SANRAL)), with concessionaires (the Bakwena Concession (Bakwena), the N3TC Concession (N3TC) and the TRAC Concession (TRAC)) performing infrastructural development and management on three major national routes.

Aviation

Cargo and passenger aviation is a combination of state and private ownership. South African Airways SOC Limited and its divisions dominate the local passenger routes, however, there are a number of private passenger airlines which operate within South Africa. ComAir (through the British Airways franchise and Kulula) is the longest surviving private commercial passenger aviation company. A number of private airlines have taken to the skies since 1994, however, most of them have since been liquidated amid a harsh operating environment due to their failure to compete with the state-owned airlines and their access to public funds.

The major airports are owned and managed by the Airports Company South Africa (majority owned by the South African Government) most notably O.R Tambo International Airport and Cape Town International Airport. The only other international accredited airport in Johannesburg, Lanseria International Airport is privately owned and is host to a number of commercial and charter airlines.

The South African Civil Aviation Authority (established in terms of the Civil Aviation Act) is responsible for the regulation of the aviation industry in South Africa.

Ports and port terminals

Transnet, through its various divisions dominates infrastructure ownership in this sector.

Transnet, through its National Ports Authority division (National Ports Authority) owns and provides port infrastructure at the eight commercial seaports in South Africa. The National Ports Authority owns 19 container berths, 36 dry-bulk berths, 29 break-bulk berths, 13 liquid-bulk berths and eight entrance channels with supporting breakwaters, turning basins, networks and utilities.

Transnet, through its Transnet Port Terminals division (Transnet Port Terminals) owns infrastructure or packing and unpacking of containers, agricultural, breakbulk and mineral bulk.

Transnet, through its Transnet Pipelines division (Transnet Pipelines) transports 100% of South Africa's bulk petroleum products and owns a petroleum and gas transportation pipelines. It also owns a tank farm capable of carrying 30 million litres of petroleum products.

Other infrastructure

Defense infrastructure

Defense infrastructure is owned by the state.

Education infrastructure

Ownership of education infrastructure is a combination of public and private ownership with public schools being in the majority. There are a number of prominent private schools which service the middle to high income market with two of the big private school players ie Curro and Advtech being listed on the JSE.

Hospital infrastructure

Ownership of health facilities is a combination of public and private ownership. There a number of private entities operating health centers most notably Netcare and Mediclinic hospitals.

Last modified 5 Dec 2019

Spain

Spain

Generally

The ownership of energy and infrastructure assets in Spain varies according to the asset class. The main asset classes are usually considered to be:

  • economic infrastructure (energy, aviation, rail, telecommunications, water, roads and waste); and
  • social infrastructure (education, health and justice/prisons, housing.

Key sectors are considered below.

Energy

The gas and electricity industries in Spain are privatized, with the generation, transmission, distribution and supply services provided by a number of private sector companies. The relevant private sector companies own the generation, transmission and distribution assets. Notably, the private company Red Eléctrica de España, S.A. (REE) owns all the high voltage electricity grid. The private company ENAGÁS, S.A. is the main gas natural transport operator in Spain and it is certificated as a Transmission System Operator (TSO) by the Spanish public authorities and the European Commission.

The private sector finances and delivers most of the required infrastructure but there are a number of government policy mechanisms (adopted through legislation) which are used to incentivize investment in eligible energy generation technologies.

The principal body of the energy sector in Spain is the National Authority for Markets and Competition (CNMC), as the new independent authority in charge of both competition and regulatory matters in Spain in the fields of energy, electronic communications, audiovisual, postal and transport (railway and airport).

CNMC is fully independent from the Government, Public Administration and market players, has organizational and functional autonomy and is subject to judicial and parliamentary control.

Telecoms infrastructure

The telecommunications networks (fixed and mobile) in Spain are privately owned by a number of service providers. A good example is Telefonica which is responsible for most of the Spanish broadband infrastructure but whose work is heavily regulated by government.

Transport infrastructure

Light rail

Typically, light rail assets (such as trams and associated track) are owned by local public sector promoting bodies, although certain elements of light rail projects may be outsourced to the private sector; for example, the private sector may provide new trams, run a concession or operate and maintain a light rail system on behalf of a local transport executive – the assets will continue, however, to be owned by the public sector.

Heavy rail

The rail market in Spain is privatized but its composition (which is complex) involves both public and private entities.

Roads, bridges and tunnels

The public sector may outsource the construction, operation and maintenance (sometimes on a project financed basis) of such assets to the private sector. In the case of tolled roads, the private sector has taken on roads/crossings on a full concession basis – namely, responsible for the design, build, financing, operation, maintenance and collection of tolls for a number of years with the main revenue stream being the collection of toll revenues from users (rather than any service payments from the public sector) but these types of projects are no longer considered viable as the private sector is not willing to take ‘demand risk’ in order to service the upfront capital costs and associated bank debt.

Aviation

Commercial aviation management in Spain is (for the most part) privatized. As regards airport infrastructure, there are a number of ownership structures in the Spanish market, including private ownership, local government ownership and various forms of public-private ownership. All models are heavily regulated by government and another public sector entities such as AENA, AESA and ENAIRE.

Ports

The Spanish ports sector comprises a complex variety of public and private agents and operators. The current regulations distinguish between local ports and ports of general interest, being the latter monitored by the public bodies Autoridades Portuarias.

Other infrastructure

Social infrastructure (schools, hospitals, emergency services centers/prisons)

Typically, these are owned by the public sector. The majority of social infrastructure assets in Spain are directly financed by the government.

Education

The ownership of a school's infrastructure depends upon which category of school it belongs to. For example, in the case of a local authority maintained school, the school and playing fields will be typically owned by the local authority; an academy school can receive funding directly from the government and may lease land from a local authority.

Hospitals

More than half of the hospitals in Spain are in some way involved in the public sector: they belong to the public health and hospitals system, operate through concerted public-private actions or by means of public funds/contracts.

Social housing

This is a diverse sector involving many different organizations and individuals including housing developers, building contractors, mortgage lenders, local authorities, housing associations, landlords, owner-occupiers, private renters and those in the social rented sector, which are constrained by public sector regulations.

Defense

Typically, defense assets are owned by the public sector.

Last modified 5 Dec 2019

Sweden

Sweden

Generally

The ownership of energy and infrastructure assets in Sweden varies depending on the asset class.

There are three main ownership structures:

  • asset classes which are mainly wholly-owned by the state;
  • asset classes that are mainly deregulated but where state/municipal companies own the assets; and
  • asset classes that are deregulated and where the assets are mainly privately owned.

Energy

The gas and electricity industries in Sweden are partly privatized, with the generation and supply services being provided by a number of private sector companies. The national transmission network is, however, owned by the state-owned entity Svenska Kraftnät and operates under the protection of a statutory monopoly. In the same way, regional and local distributors operate regulated monopolies which control local and regional distribution.

The Swedish energy market supervisory authority is the Energy Markets Inspectorate (Energimarknadsinspektionen). The authority supervises, among other things, the distribution monopoly and monitors network charges to ensure that they are fair.

The private sector finances and delivers most of the required infrastructure but there are a number of government policy mechanisms (adopted through legislation) which are used to incentivize investment in eligible energy generation technologies. In certain instances, including on major energy infrastructure, projects may be procured by the public sector and depending on the terms of the procurement, the asset may either be publicly or privately owned. Public-private partnerships (PPPs) are not common funders of energy infrastructure in Sweden.

Telecoms infrastructure

The telecommunications networks (fixed and mobile) in Sweden are privately owned by a number of service providers.

Transport infrastructure

Light rail

Typically, light rail assets (such as trams and associated track) are owned by local public sector promoting bodies. For example, Storstockholms Lokaltrafik (SL) owns the metro (the only one in Sweden), track and supporting infrastructure in Stockholm. The metro system is maintained by MTR Tunnelbanan AB, which won the contract through a procurement process. Other light rail is similarly operated.

Heavy rail

The rail market in Sweden is privatized but its composition (which is complex) involves both public and private entities. The principal elements to the rail sector in Sweden are:

  • Sveriges Järnvägar (SJ) – Owned by the Swedish state, the company is the largest operator in Sweden.
  • Freight companies – Freight companies are wholly commercial entities.

The rail sector is regulated by the Swedish Transportation Board (Transportstyrelsen).

Roads, bridges and tunnels

The Swedish Transportation Board operates, maintains and improves the motorways and major roads in Sweden. The public sector may outsource the construction, operation and maintenance (sometimes on a project financed basis but this is still very uncommon in Sweden) of such assets to the private sector. An infrastructure charge may be taken out by people using particular roads or bridges in order to finance the construction, maintenance or upgrade of the same. PPPs are not common funders of transport infrastructure in Sweden.

Aviation

Aviation in Sweden is privatized. Ten airports in Sweden including the two largest, Stockholm Arlanda Airport and Göteborg Landvetter Airport, are run and owned by the wholly state-owned company Swedavia. The remaining two airports in Sweden, Ronneby Airport and Luleå Airport, are run and owned by other entities but Swedavia is responsible for commercial air traffic.

Ports

Sweden has over 50 commercial ports along the coasts and in the two larger lakes. Most of them are owned by the municipal in which they are located. Others may be co-owned by private companies and the municipal, or solely privately owned. There are also privately owned industrial ports. The largest industrial port in Sweden is Brofjorden and it is privately owned by Preem.

Other infrastructure

Social infrastructure (schools, hospitals, emergency services centers/prisons)

All, except schools, are mainly owned and run by the public sector.

Education

Schools may be public or private, but are subject to Swedish law and regulations.

Hospitals

Hospitals are mainly owned and run by the county councils of the area in which they are located. There are private hospitals as well, and the health care at such hospitals can be financed by the county council, by the patients private health insurance or by the patients themselves. At the basic level, Sweden maintains a state-financed health care system.

Social housing

This is a diverse sector involving many different organizations and individuals including housing developers, building contractors, mortgage lenders, local authorities, housing associations, landlords, owner-occupiers, private renters and those in the social rented sector.

Defense

Defense assets are owned by the public sector.

Waste

The municipalities have a monopoly on and an obligation to manage the transfer of household waste. The municipalities can decide to manage the transportation by itself, through a company owned by the municipality or to hire a private operator.

Water

Water services in Sweden are privatized, but with wholly state or municipal owned companies operating on the commercial market.

Last modified 22 Jan 2020

Thailand

Thailand

Generally

The ownership of energy and infrastructure assets in Thailand varies according to the asset class. The main asset classes are usually considered to be:

  • economic infrastructure (energy, aviation, rail, telecommunications, water, roads and waste); and
  • social infrastructure (education, health and justice/prisons, housing).

Key sectors are considered below.

Energy

Gas

PTT Public Company Limited (PTT) is a state-owned listed oil and gas company. It owns gas pipelines and LPG terminals and engages in the production of oil and gas as well as petrochemical products. PTT has many subsidiaries investing in various sectors. Private participation is allowed in the gas sector through receipt of concessions from the government. There are encumbrances on investment in certain areas e.g. LPG in terms of strict criteria and conditions for investment. Therefore, few private investors engage in such business sector.

There are six main companies engaging in oil refinery business in Thailand:

  • Thai Oil Public Limited Company;
  • PTT Global Chemical Public Company Limited;
  • Star Petroleum Refining Public Company Limited;
  • Bangchak Petroleum Public Company Limited;
  • IRPC Public Company Limited; and
  • Esso (Thailand) Public Company Limited.

Electricity

Three state enterprises manage the electricity industry in Thailand. The Electricity Generating Authority of Thailand (EGAT) is responsible for producing, generating and transmitting electricity. The Metropolitan Electricity Authority (MEA) and the Provincial Electricity Authority (PEA) deal with distribution of electricity. Private sector entities are able to participate in the electricity business as electricity producer in accordance with government policy.

There are three main types of private electricity producer:

  • Independent Power Producer (IPP);
  • Small Power Producer (SPP); and
  • Very Small Power Producer (VSPP).

Telecoms infrastructure

The National Broadcasting and Telecommunication Commission (NBTC) is an independent state organization empowering to assign the frequencies and to regulate the broadcasting and telecommunications businesses with regard to the utmost public benefit. Private entities are able to take part in telecommunication business through an auction and licensing process. Qualified candidates need to accept terms and conditions specified by NBTC before entering into an auction to engage in telecoms infrastructure. The major telecommunications operators are True Move, DTAC and AIS.

TOT Public Limited Company (TOT) and CAT Telecom Public Limited Company (CAT) operate national telecommunications and provide international telecommunication services. Both are Thai state-owned telecommunications companies.

Transport infrastructure

Urban transport

Currently, there are three urban rail transport systems operating in Thailand and connecting Bangkok with outer Bangkok and urban areas; being the Bangkok Mass Transit System (BTS), Metropolitan Rapid Transit (MRT) and Airport Rail Link (ARL).

  • Bangkok Mass Transit System Public Limited Company (BTSC) built and operated the BTS which was entirely funded by private sectors. The BTSC's 30-year concession awarded by the Bangkok Metropolitan Authority (BMA) ends in 2029, following which (subject to renewal), the BTS business will be transferred to the BMA because the concession is in the form of a Build Operate Transfer (BOT) contract.
  • The MRT is a cooperation between public and private sectors. The Mass Rapid Transit Authority of Thailand (MRTA) as a project owner built the infrastructure and offered the operating concession to the Bangkok Expressway and Metro Public Limited Company (BEM).
  • The ARL is entirely owned by State Railway of Thailand (SRT) and operated by State Railway of Thailand Electrified Train Company Limited which is now a state enterprise under the supervision of the Ministry of Transportation.
  • Additional rail and urban transport systems are currently under working progress whereby the main project owner is MRTA.

National rail

Double-track rail and high speed railway projects are currently under construction or negotiation process. SRT is responsible for study and procurement of both projects. High speed railway projects which have been active are:

  • Bangkok – Nakhon Ratchasima;
  • Nakhon Ratchasima – Nong Khai;
  • High-speed rail linking three airports;
  • U-Tapao – Rayong;
  • Bangkok – Chiang Mai; and
  • Bangkok – Padang Besar.

Certain routes of high speed railway project have the cooperation from foreign countries eg Italy, China and Japan in terms of technology transfer. Private sector is able to participate in the investment on both projects in the form of public-private partnerships scheme (PPP) which is usually made by auction process.

Roads, bridges and tunnels

Roads

The Department of Highways (DOH), an authority under the supervision of Ministry of Transportation, is responsible for research and development, construction, expansion, maintenance and renovation of the motorways, national highways and concession highways. Rural and local highways are under the responsibility of the Department of Rural Highways (DORH) and local authorities, respectively. The Expressway Authority of Thailand is responsible for expressway whereby BEM receives the concession to be an operator. Don Muang Tollway Public Limited Company won an auction to manage and collect toll revenues of the Don Muang Tollway which is the highway under the supervision of DOH. Private sector participates in the roads investment by procurement process of sub-contracts, eg a construction contract, a system installation contract or a design, operation and maintenance contract.

Bridges and tunnels

The sub-divisions of the DOH and DORH called the Bureaus of Bridge Construction are responsible for construction of bridges and tunnels over and around a highway under its responsibility. Unless local competent authorities are responsible for design, construction and maintenance of bridges and tunnels in the area of its responsibility eg Department of Public Work of Bangkok is responsible for construction of bridges and tunnels in certain areas of Bangkok.

Aviation

Airport of Thailand Public Limited Company (a majority state owned company) owns and operates main airports in Thailand. Private ownership on airports, and aircrafts is recognized in Thailand as long as relevant licenses are obtained. All models are heavily regulated by government and the Civil Aviation Authority of Thailand which is the aviation regulator in Thailand.

Port

Port Authority of Thailand (PAT) is the supervisory authority of ports in Thailand. Six main ports are under the regulation of PAT which assigns the management. Private can invest in port business eg sea port business by licensing process.

Other infrastructure

Eastern Economic Corridor (EEC)

The EEC is a developing economic zone created with an aim:

  • to increase and improve infrastructure such as rails, deep seaports, and aircraft;
  • to create business, industrial clusters, and innovation hubs; and
  • to benefit tourism and employment.

The EEC region preliminarily includes areas in three provinces in Thailand, i.e. Chonburi Province, Chachoengsao Province, and Rayong Province.

Investment privileges and benefits which available to qualified investors of the EEC regime relate to tax in terms of corporate income tax and import duties, land ownership permission, and visa and work permits for non-Thai nationals. Plus, financial assistance for purposes of innovative R&D or experts development of the targeted business could also be obtained.

Social infrastructure (schools, hospitals, emergency services centers / prisons)

Private participation is permitted in social infrastructure area in order to assist public sector providing such infrastructure not to directly earn profits.

Education

A licensed person or entity is able to establish a school or university. Specific requirements may be applied depending on each type of entities established eg allocation of profits to reserved funds of school, maintenance of Thai majority committees of university and requirement of notification to supervisory authorities on an incident-based basis.

Hospitals

A license is mandatory in order to operate sanatorium. Regulatory compliance is also of important for this type of business operation.

Defense

Typically, defense assets are owned by the public sector.

Waste

The Pollution Control Department (PCD) is the main supervisory authority of waste management in Thailand. PCD then hires private sector to procure waste collection and waste management.

Water

The authority in charge of water industry in Thailand is Metropolitan Waterworks Authority and Provincial Waterworks Authority. East Water Resources Development and Management Public Limited Company (EW) was set up for privatization of water industry. EW handles development of water resources for both industrial and consuming purpose for the eastern part of Thailand to support the plan to create main industrial district of Thailand. Other private companies also take part in investment on water infrastructure eg water-supply projects. Waste water management is under the responsibility of Public Works Department. Establishment of factory dealing with waste water treatment by private companies is allowed provided that license or approval from relevant authorities are duly obtained.

Last modified 4 Apr 2020

Ukraine

Ukraine

Generally

The ownership of energy and infrastructure assets in Ukraine varies according to the asset class and sector. The main asset classes are usually considered to be:

  • economic infrastructure (energy, aviation, rail, telecommunications, roads and waste); and
  • social infrastructure (education, health and justice/prisons, housing).

Key sectors are considered below.

Energy

The gas and electricity industries in Ukraine are partially privatized. Gas producers and gas distribution companies are privately owned, however, transmission, distribution grids and infrastructure are owned and operated by the state via public companies (Ukrtransgaz). The state is also present in other areas in the gas market such as gas production (NAK Naftogas, UkrGasVydobuvannya) while supply services are provided by a number of private sector companies. The Ukrainian gas market is heavily regulated.

Ukraine intends to reduce gradually the number of state-owned objects and launched privatization of state-owned companies. Every year the Ukrainian government approves the list of state-owned enterprises for privatization, including regional electricity supply companies.

The National Energy and Utilities Regulation Commission is responsible for the regulation of the electricity market in Ukraine.

Telecoms infrastructure

The telecommunications networks (mobile and fixed) in Ukraine are mostly privately owned by a number of service providers.

The National Commission for the State Regulation of Communications and Informatization is the regulator for the Ukraine telecommunications sector. The State Committee for Television and Radio Broadcasting of Ukraine also regulates the television broadcast services and wireless communication services.

Rail infrastructure

Light rail

Typically, light rail assets (such as trams and associated track) are owned by local public sector promoting bodies.

Heavy rail

The rail market in Ukraine involves both public and private entities. The principal elements to the rail sector in Ukraine are as follows:

  • Ukrzaliznytsia, a state-owned public joint-stock company, which is on the public sector balance sheet and owns, operates and maintains rail tracks, signaling and station infrastructure. It is responsible for improving most of the regulated national rail infrastructure and for operating some of the stations on the national rail network). Ukrainian energy authorities have been conducting a corporate restructuring over the assets of Ukrzaliznytsia and foreign management has been employed to operate the company and increase business efficiency.
  • Freight Operating Companies are wholly commercial entities.
  • Project finance – There has been a number of project finance models dealing with and on that deal it is the private sector which owns the trains and will continue to do so following the expiry of the main contract with the public sector.

The rail sector is regulated by the Ministry of Infrastructure.

Other infrastructure

Roads, bridges and tunnels

A government entity, the State Agency of Automobile Roads of Ukraine, operates, maintains and improves the motorways and major roads (ie the strategic road network) in Ukraine. The State Agency of Automobile Roads of Ukraine is regulated by the Ministry of Infrastructure and receives funding from the government for investment in the strategic road network (including additional road capacity). Local roads in Ukraine are the responsibility of local authorities. The public sector may outsource the construction, operation and maintenance (sometimes on a project financed basis) of such assets to the private sector (on a concession basis or otherwise). This year the government announced that it would be sponsoring a lot of tender procurement on the construction of the strategic road network.

Aviation

Aviation in Ukraine is (for the most part) privatized. As regards airport infrastructure, there are a number of ownership structures in Ukraine, including public ownership, local government ownership and various forms of public-private ownership (airports in the cities of Odessa and Kyiv). All models are heavily regulated by the government and the State Aviation Administration is the aviation regulator in the Ukraine.

Ports

The Ukrainian ports sector is mostly publicly owned, however, the government is considering different options to attract private investors (on a concession, lease or other model). Operating commercial companies, which operate in major Ukrainian ports are privately owned.

Education, hospitals, defense and waste

Typically, these assets are mostly owned by the public sector.

Last modified 24 Jan 2020

UK - England and Wales

UK - England and Wales

Generally

The ownership of energy and infrastructure assets in the UK varies according to the asset class. The main asset classes are usually considered to be:

  • economic infrastructure (energy, aviation, rail, telecommunications, water, roads and waste); and
  • social infrastructure (education, health and justice/prisons, housing).

The UK government has announced that Private Finance Initiative (PFI) or Public Private Partnership (PPP) models may no longer be utilised in England and Wales.  Until this policy is changed, investment and lending opportunities are therefore likely to be found in economic infrastructure with the exception of some opportunities in the social housing sector.  The Welsh and Scottish government continue to utilise PPP-style models on certain projects using the Mutual Investment Model (MIM) and the Non-Profit Distributing (NPD) model respectively.

Key sectors are considered below.

Energy

The gas and electricity industries in the UK are privatized, with the generation, transmission, distribution and supply services provided by a number of private sector companies. The relevant private sector companies own the generation, transmission and distribution assets. Notably, the National Grid, a listed public company (albeit heavily regulated) owns all of the mainland transmission lines. On certain offshore projects, private entities other than the National Grid may own transmission lines.

The private sector finances and delivers most of the required infrastructure but there are a number of government policy mechanisms (adopted through legislation) which are used to incentivize investment in eligible energy generation technologies. In certain instances, including on major energy infrastructure, projects may be procured by the public sector and depending on the terms of the procurement, the asset may either be publicly or privately owned.

The Office of Gas and Electricity Markets (Ofgem) (as governed by the Gas and Electricity Markets Authority) is the principal body with responsibility for regulation of the energy sector in Great Britain. There is a separate regulator (the Utility Regulator) for the energy sector in Northern Ireland.

Telecoms infrastructure

The telecommunications networks (fixed and mobile) in the UK are privately owned by a number of service providers. A good example is BT Openreach which is responsible for most of the UK's broadband infrastructure but whose work is heavily regulated by government; it, in turn, works with more than 500 service providers to provide local access to users.

The Office of Communications (Ofcom) is the regulator of the UK's telecommunications sector. It also has responsibilities for television broadcast services and wireless communications services.

Due to the UK government’s focus on driving the digital transformation through enhanced telecommunications, recent years have seen Ofcom seek to address the issue of BT Openreach’s strong position in the broadband access market by attempting to level the playing field in terms of access of BT Openreach’s own network and infrastructure to other private providers and making it easier for such providers to build their own broadband networks.  As a result, there has been an expansion of other providers building their own networks.

There has also been significant M&A activity in the ownership of telecommunications towers.

Transport infrastructure

Light rail

Typically, light rail assets (such as trams and associated track) are owned by local public sector promoting bodies. For example, Transport for London owns the tubes, track and supporting infrastructure in London. Outside of London and on a small number of lines on the London Underground network, certain elements of light rail projects may be outsourced to the private sector; for example, the private sector may provide new trams, run a concession or operate and maintain a light rail system on behalf of a local transport executive – the assets will continue, however, to be owned by the public sector.

Heavy rail

The rail market in the UK is privatized but its composition (which is complex) involves both public and private entities. The principal elements to the rail sector in Great Britain are:

  • Network Rail, a private limited company, is on the public sector balance sheet and owns, operates and maintains rail tracks, signaling and station infrastructure. It is responsible for improving most of the regulated national rail infrastructure and for operating some of the stations on the national rail network. It is not responsible for the London Underground network, Crossrail and High Speed rail infrastructure.
  • Public transport authorities, ie central and devolved government bodies and some metropolitan bodies, specify, let and manage operating contracts and give Network Rail a significant proportion of the funding for infrastructure maintenance and enhancement.
  • Train operating companies (TOCs) are awarded franchises by the Department for Transport or local transport executives to operate certain train lines. 'Open Access TOCs' may apply to the rail regulator for use of certain train paths/routes when not being used by the franchised TOCs. Note that the UK government is currently reviewing the franchise system.
  • Freight operating companies (FOCs) are wholly commercial entities.
  • Rolling stock companies (ROSCOs) are private entities which own and maintain rolling stock and lease them to the TOCs for use on their franchise.
  • Project finance – There have been limited deals (for example both phases of the Intercity Express Programme) where rolling stock has been procured through a  PFI (Private Finance Initiative) / PPP (Public Private Partnership) project finance-style model and on that deal it is the private sector which owns the trains and will continue to do so following the expiry of the main contract with the public sector.  The Thameslink rolling stock PPP also deployed elements of a PFI-style model albeit in a hybrid PFI/asset finance structure. Project finance structures have been utilised on other deals but they have tended to adopt alternative ownership and revenue models rather than a direct PFI-style availability model.

The rail sector is regulated by the Office of Rail and Road (ORR).

Roads, bridges and tunnels

A government entity, Highways England, operates, maintains and improves the motorways and major 'A' roads (ie the strategic road network) in England. Highways England is regulated by the Office of Road and Rail and receives funding from the government for investment in the strategic road network (including additional road capacity). Local roads in England are the responsibility of local authorities. The public sector may outsource the construction, operation and maintenance (sometimes on a project financed basis) of such assets to the private sector. In the case of tolled roads, the private sector has taken on roads/crossings on a full concession basis – namely, responsible for the design, build, financing, operation, maintenance and collection of tolls for a number of years with the main revenue stream being the collection of toll revenues from users (rather than any service payments from the public sector) but these types of projects are no longer considered viable as the private sector is not willing to take 'demand risk' in order to service the upfront capital costs and associated bank debt. On more recent projects, the private sector provides toll collection services (in part) for a service fee rather than it solely relying on those tolls as its main source of revenue.

Aviation

Aviation in the UK is (for the most part) privatized. As regards airport infrastructure, there are a number of ownership structures in the UK market, including private ownership, local government ownership and various forms of public-private ownership. All models are heavily regulated by government and the Civil Aviation Authority is the aviation regulator in the UK.

Ports

The UK ports sector comprises a variety of company, trust and municipal ports, all operating on commercial principles, independently of government and largely without public subsidy. The private sector operates the vast majority of the UK's major ports.

Other infrastructure

Social infrastructure (schools, hospitals, emergency services hubs and prisons)

Typically, these are owned by the public sector with the exception of social housing projects (please see below) with the private sector's responsibility being for any or all of the design, build, financing, operation and maintenance of the infrastructure. The majority of social infrastructure assets in the UK are directly financed by the government. Subject to value for money considerations, historically private finance may also have been considered  in the procurement of social infrastructure assets using the Private Finance Initiative  and its successor , Private Finance 2 (PF2). However, the UK government has declared that PFI, PF2 or any other Public Private Partnership (PPP) model may not be used going forward.  This means that likely financing model for future projects is through direct financing by government unless there is a change of policy.  In relation to some of these specific sectors:

Education

The ownership of a school's infrastructure depends upon which category of school it belongs to. For example, in the case of a local authority maintained school, the school and playing fields will be owned by the local authority; and an academy school (which receives funding directly from the government) may lease land from a local authority. 

Hospitals

Ownership of hospitals is vested in various public sector bodies operating within the National Health Service.

Social housing

This is a diverse sector involving many different organizations and individuals including housing developers, building contractors, mortgage lenders, local authorities, housing associations, landlords, owner-occupiers, private renters and those in the social rented sector. Typically, on a social housing project, housing associations own the relevant housing stock. Although housing associations tend to be private limited companies their governance is constrained by public sector regulation and, effectively, operate as quasi-public sector entities.

Defense

Typically, defense assets are owned by the public sector.

Waste

In the past, the public sector procured new waste treatment or collection facilities and these were owned by the public sector even if the private sector would be responsible for design, build, operation or maintenance of the facility. One example being long-term Private Finance Initiative (PFI) contracts with private sector companies in relation to the building and operation of waste infrastructure, with financial support being provided to the local authorities by the government through the PFI in respect of the cost of those projects. Increasingly, merchant facilities, namely those developed and operated by private sector entities, are being used and these facilities serve both their public sector and private sector customers. According to the Infrastructure and Projects Authority's National Infrastructure Delivery Plan 2016-2021 (March 2016), the government is not planning to fund any new waste infrastructure projects beyond those in the pipeline.

Water

Water and wastewater (sewerage) services in England and Wales are delivered by private sector companies (water companies) which own the relevant infrastructure assets. In Scotland and Northern Ireland, water and wastewater services are provided by state owned companies. The Thames Tideway Tunnel (a major new sewer) in London is being built and will be operated by a private sector company called Tideway, which is independent of Thames Water (the regional water company). The Water Services Regulation Authority (Ofwat) is the regulator of the water sector in England & Wales. The Northern Ireland Authority for Utility Regulation (NIAUR) is the regulator for Northern Ireland. The Water Industry Commission for Scotland (WICS) is the equivalent for Scotland.

Last modified 6 Dec 2019

UK - Scotland

UK - Scotland

Generally

The ownership of energy and infrastructure assets in the UK varies according to the asset class. The main asset classes are usually considered to be:

  • economic infrastructure (energy, aviation, rail, telecommunications, water, roads and waste); and
  • social infrastructure (education, health and justice/prisons, housing.

Key sectors are considered below.

Energy

The gas and electricity industries in the UK are privatized, with the generation, transmission, distribution and supply services provided by a number of private sector companies. The relevant private sector companies own the generation, transmission and distribution assets. Notably, the National Grid, a listed public company (albeit heavily regulated) operates all of the mainland transmission lines (although in Scotland these are owned by other entities). On certain offshore projects, private entities other than the National Grid may own transmission lines.

The private sector finances and delivers most of the required infrastructure but there are a number of government policy mechanisms (adopted through legislation) which are used to incentivize investment in eligible energy generation technologies. In certain instances, including on major energy infrastructure, projects may be procured by the public sector and depending on the terms of the procurement, the asset may either be publicly or privately owned.

The Office of Gas and Electricity Markets (Ofgem) (as governed by the Gas and Electricity Markets Authority) is the principal body with responsibility for regulation of the energy sector in Great Britain. There is a separate regulator (the Utility Regulator) for the energy sector in Northern Ireland.

Telecoms infrastructure

The telecommunications networks (fixed and mobile) in the UK are privately owned by a number of service providers. A good example is BT Openreach which is responsible for most of the UK's broadband infrastructure but whose work is heavily regulated by government; it, in turn, works with more than 500 service providers to provide local access to users.

The Office of Communications (Ofcom) is the regulator of the UK's telecommunications sector. It also has responsibilities for television broadcast services and wireless communications services.

Transport infrastructure

Light rail

Typically, light rail assets (such as trams and associated track) are owned by local public sector promoting bodies. Certain elements of light rail projects may be outsourced to the private sector; for example, the private sector may provide new trams, run a concession or operate and maintain a light rail system on behalf of a local transport executive – the assets will continue, however, to be owned by the public sector.

Heavy rail

The rail market in the UK is privatized but its composition (which is complex) involves both public and private entities. The principal elements to the rail sector in Great Britain are:

  • Network Rail, a private limited company, is on the public sector balance sheet and owns, operates and maintains rail tracks, signaling and station infrastructure. It is responsible for improving most of the regulated national rail infrastructure for operating some of the stations on the national rail network).
  • Public transport authorities, ie central and devolved government bodies and some metropolitan bodies, specify, let and manage operating contracts and give Network Rail a significant proportion of the funding for infrastructure maintenance and enhancement.
  • Train Operating Companies (TOCs) are awarded franchises by the Department for Transport or local transport executives to operate certain train lines. ‘Open Access TOCs’ may apply to the rail regulator for use of certain train paths/routes when not being used by the franchised TOCs. The Scottish TOC is currently Scotrail, a subsidiary of Abellio. Scotrail and Network Rail in Scotland, although separate entities, have a common management structure.
  • Freight Operating Companies (FOCs) are wholly commercial entities.
  • Rolling Stock Companies (ROSCOs) are private entities which own and maintain rolling stock and lease them to the TOCs for use on their franchise.
  • Project finance: There has been one deal (both phases of the Intercity Express Programme) where rolling stock has been procured through a project finance model and on that deal it is the private sector which owns the trains and will continue to do so following the expiry of the main contract with the public sector.

The rail sector is regulated by the Office of Rail and Road (ORR).

Roads, bridges and tunnels

Transport Scotland, an executive agency of the Scottish Government accountable to the Scottish Ministers, are responsible for the trunk road network in Scotland.

Aviation

Aviation in the UK is (for the most part) privatized. As regards airport infrastructure, there are a number of ownership structures in the UK market, including private ownership, local government ownership and various forms of public-private ownership. All models are heavily regulated by government and the Civil Aviation Authority is the aviation regulator in the UK.

Ports

The UK ports sector comprises a variety of company, trust and municipal ports, all operating on commercial principles, independently of government and largely without public subsidy. The private sector operates the vast majority of the UK's major ports.

Other infrastructure

Social infrastructure (schools, hospitals, emergency services centers/prisons)

Typically, these are owned by the public sector with the exception of social housing projects (please see below) with the private's sector's responsibility being for any or all of the design, build, financing, operation and maintenance of the infrastructure. The majority of social infrastructure assets in the UK are directly financed by the government. Subject to value for money considerations, private finance may also be used in the procurement of social infrastructure assets – namely, using the Private Finance Initiative (in the past) and its successors in Scotland, the Non-Profit Distributing (‘NPD’) Model. 

Education

The ownership of a school's infrastructure is generally by the relevant local authority. For example, in the case of a local authority maintained school, the school and playing fields will be owned by the local authority; and an academy school (which receives funding directly from the government) may lease land from a local authority. The current program for new schools is through the ‘Priority Schools Building Programme’, delivering schools either through a traditional construction procurement or on a project-financed basis albeit there is an unusual ‘Aggregator’ structure for that latter.

Hospitals

Ownership of hospitals is vested in various public sector bodies operating within the National Health Service in Scotland.

Social housing

This is a diverse sector involving many different organizations and individuals including housing developers, building contractors, mortgage lenders, local authorities, housing associations, landlords, owner-occupiers, private renters and those in the social rented sector. Typically, on a social housing project, housing associations own the relevant housing stock. Although housing associations tend to be private limited companies their governance is constrained by public sector regulation and, effectively, operate as quasi-public sector entities.

Defense

Typically, defense assets are owned by the public sector.

Waste

In the past, the public sector procured new waste treatment or collection facilities and these were owned by the public sector even if the private sector would be responsible for design, build, operation or maintenance of the facility. One example being long-term Private Finance Initiative (PFI) contracts with private sector companies in relation to the building and operation of waste infrastructure, with financial support being provided to the local authorities by the government through the PFI in respect of the cost of those projects. Increasingly, merchant facilities, namely those developed and operated by private sector entities, are being used and these facilities serve both their public sector and private sector customers.

Water

In Scotland, water and wastewater services are provided by a state-owned company (Scottish Water). The Water Industry Commission for Scotland (WICS) is the relevant regulatory body.

Last modified 20 Oct 2017

United Arab Emirates

United Arab Emirates

Generally

Article 23 of the UAE Constitution provides that: ‘The natural resources and wealth of each Emirate shall be considered the Public Property of that Emirate. Society shall be responsible for the protection and proper exploitation of such natural resources and wealth for the benefit of the national economy.’

In general, although the ownership structure of an infrastructure project varies according to its type, it is generally the case that a government or quasi-government entity will be involved in it and benefit financially from the project. The actual involvement varies on a case-by-case basis.

Energy

Abu Dhabi

Abu Dhabi National Oil Company (ADNOC) and its subsidiaries are part (usually the majority shareholder) in every project regarding the exploitation of its hydrocarbons. Traditionally because the Abu Dhabi hydrocarbon industry is mature, foreign stakeholders would enter into long-term concession agreements but with respect to newer fields, some of these have been placed on a production sharing agreement basis. More detailed information about the difference between concession agreements and productions sharing agreements is available on request.

Dubai

Dubai's hydrocarbon industry has been in decline for many years and started out with minimal reserves in comparison to the Emirate of Abu Dhabi. Previously its hydrocarbon production was done on the basis of concession agreements with strategic investors. Dubai's Emirates National Oil Company (ENOC) remains a key player but much of its activity is now on the midstream (transmission and refining and sales and marketing through its chain of petrol stations).

Sharjah

The government works closely with one of the largest privately – owned oil companies in the Gulf, Crescent Petroleum and Crescent Enterprises, which is owned by the Jafr family, on most hydrocarbon projects, whether oil or gas,. In addition, Crescent Petroleum is a 20% shareholder of the listed company, Dana Gas. Its gas reserves are more significant than its oil reserves.

The Northern Emirates of Ajman, Fujairah, Ras Al Khaimah and Umm Al Quwain have negligible hydrocarbon resources but were viable fields to be discovered, then there is a strong possibility that they would use a similar model to that adopted by the other governments in the Emirates.

 

Renewables

Increasingly pressure is being put on the UAE and its Gulf Cooperation Council (GCC) neighbors to reduce their carbon footprints. Accordingly a number of Emirates are responding enthusiastically to this challenge.

Abu Dhabi

Masdar City is an integrated green development company and wholly owned subsidiary of Mubadala Development Company PJSC, a state-owned holding company and wholly-owned investment company set up to diversify Abu Dhabi's economy.

In addition, Mubadala has invested in solar power and has started to consider other renewables projects such as wind and wave power. While all projects are at an early stage, there is considerable optimism that investment in solar power will continue to grow due to the abundance of sunlight available in the UAE,

Dubai

While not as robustly as Abu Dhabi yet, Dubai has already invested in solar power, commissioning a 200 MW solar project located in Mohamed Bin Rashid Solar Park.

Electricity and water

Each of the seven Emirates has a government-owned monopoly supplier of water and electricity services.

In summary, investment in any conventional and alternative power projects in UAE will involve significant interface and contracting with a government or quasi-government entity to some degree.

The Emirates have a nascent nuclear program which is under the direct control of the International Atomic Energy Agency but the initiatives are implemented through the Emirates Nuclear Energy Corporation.

Telecoms infrastructure

There are two majority government-owned providers of telecommunications services in the UAE, Etisalat being the older entity (set up in 1976) and Du. While the majority shareholders are government-owned or backed companies, Du has over 20% public ownership and it is listed on the Dubai Financial Market.

The regulator of the Telecommunications networks is the Telecommunications Regulatory Authority (TRA).

Transport infrastructure

This depends on the type of transport.

Generally, the Road and Transport Authority in Dubai (RTA) is responsible for roads, monorail and marine; each of which has its own section under the general supervision of the RTA.

At a federal level, transport is regulated and supervised through the Ministry of Infrastructure and Development.

Aviation

Each of Abu Dhabi and Dubai has its own international airline, Etihad and Emirates respectively. All aviation issues are regulated by either Dubai Civil Aviation Authority or the General Civil Aviation Authority for other Emirates.

Developments and investment in aviation will involve contracting with a quasi-government entity, including services contracts in the airports and around the aviation infrastructure.

Last modified 23 Jan 2020

United States

United States

Generally

Infrastructure assets in the US are both publicly and privately owned. Traditionally, government entities own and operate most roads and bridges, water supply and wastewater facilities as well as the interstate passenger rail system known as Amtrak. Most energy infrastructure, rail lines and landline and cellular telecommunications networks are privately owned but are subject to regulation by federal, state and local government entities.

Significant attention has been focused in recent years on the state of infrastructure assets in the US. At both the state and federal level, there have been initiatives with respect to assets traditionally owned by public authorities to encourage private investment or to establish public-private partnerships used successfully in many other jurisdictions. For example, at least 33 states and Puerto Rico have enacted laws permitting the use of such public-private partnerships for highway and bridge projects. Also, in 2014, the federal government launched the Build America Investment Initiative which was designed to expand the market for public-private partnerships, among other things.

Energy

Utility-scale electric generation facilities in the US are owned primarily by traditional regulated utility companies and independent power producers both of which are privately owned. Regulated utility companies provide retail electric service directly to residential and industrial customers. Independent power producers sell at wholesale to regulated utility companies, into the open market or directly to industrial customers. Transmission systems in the US are also owned primarily by regulated utility companies.

There are also numerous consumer-owned, not-for-profit electric cooperatives as well as public municipal utilities that provide electric or transmission services on a retail and wholesale basis. In addition, certain generating assets are owned by one of the Department of Energy’s four power marketing administrations and the Tennessee Valley River Authority. These generation assets are primarily hydropower or nuclear power facilities. In addition to utility-scale generation projects, sponsors in the US are developing residential and industrial rooftop and small-scale solar facilities as well as wind and gas-fired units. Development of both small and large-scale energy storage units is also increasing in the US.

The electric transmission systems and regional wholesale electricity markets in the US are controlled by independent system operators (ISO) within a single state or regional transmission organizations (RTO) across multiple states. RTOs and ISOs are not-for-profit organizations formed at the direction of the Federal Energy Regulatory Commission with the goal of providing open access to wholesale markets and available transmission.

Electric generation and transmission companies are regulated by the Federal Energy Regulatory Commission as well as a public utility commission at the state-level. Retail utility companies are subject to rate regulation designed to provide a reasonable return but limit costs to consumers. Interconnection with a transmission system is conducted pursuant to a standardized application process in each applicable state or region.

Energy policy is established by the federal government through the Department of Energy. Certain energy assets are also subject to regulation by the US Environmental Protection Agency and similar state agencies based on the impact on the environment and animal species and the treatment of hazardous materials. Nuclear plants are regulated by the Nuclear Regulatory Commission.

The production and transportation of oil and gas in the US is conducted primarily by private companies or municipalities. Pipelines throughout the US allow the transportation of oil and gas from production sources and import terminals to end-users or processing facilities. The Federal Energy Regulatory Commission also regulates the operation of oil and gas pipelines and related processing and import facilities.

Telecoms infrastructure

Private telecommunications companies provide wireless and wire-based services directly to consumers in the US. Many telecommunication companies are public companies with shares traded on the US stock market. The telecommunications industry in the US is dominated by several large players. The Federal Communications Commission is the primary regulator. Companies are subject to a complex regulatory scheme including licensing requirements.

Transport infrastructure

Freight rail in the US includes seven major carriers and dozens of smaller railroads all of which are privately owned. These companies own most of the tracks and related infrastructure.

The National Railroad Passenger Corporation or Amtrak is a for-profit corporation subsidized by the US, state and local governments. It was created by Congress pursuant to the Rail Passenger Service Act of 1970. It provides passenger rails services to 46 states and the District of Columbia and also operates certain commuter rail systems. Amtrak pays freight railroad companies for the use of their tracks.

Railroads in the US are regulated by the Federal Railroad Administration, an agency within the Department of Transportation, as well as state and local authorities. The Federal Railroad Administration has established a program to encourage the development of high-speed rail in the US.

Other infrastructure

Water supply in the US is provided via public water systems managed by state or local authorities. Wastewater treatment facilities are owned and operated primarily by local utilities or public water authorities although there has been some private investment in such facilities. Publicly supplied water is subject to federal standards issued by the federal Environmental Protection Agency.

Many roads and bridges are public assets operated by federal, state and local authorities, including the federal Department of Transportation. However, there are numerous private roads and bridges in the US. Many toll roads have been established via private investment and are operated as for-profit businesses.

Last modified 24 Jan 2020

To what extent are energy and infrastructure assets publicly or privately owned?

Generally

The ownership of energy and infrastructure assets in Australia varies according to the asset class. The main asset classes are usually considered to be:

  • social infrastructure assets including:
    • health (hospitals and medical centers);
    • education (schools, childcare and universities);
    • social accommodation (social housing and retirement villages); and
    • community (court houses, fire stations and prisons); and
  • economic infrastructure assets, including:
    • regulated utilities such as water companies;
    • transport assets such as roads and airports; and
    • telecommunication assets such as mobile phone towers.

Key sectors are considered below.

Energy

The gas and electricity industries in Australia are regulated by the states and territories.

Electricity

There is a mix of both government-owned and privately owned electricity distribution and retail businesses in Australia, with a trend towards privately owned utilities in all states and territories.

The majority of states and territories have combined to form an interconnected National Electricity Market (NEM), being Queensland (QLD), New South Wales (NSW), the Australian Capital Territory (ACT), Victoria (VIC), South Australia (SA) and Tasmania (TAS). The NEM is a wholesale electricity market for the supply and purchase of electricity across those interconnected states and territories and it is currently under construction with anticipated completion in 2021. Western Australia (WA) and the Northern Territory (NT) do not participate in the NEM and have their own major networks. The Australian Energy Market Operator (AEMO), an independent corporate body established by the Australian government, administers and operates the NEM.

There is only one major electricity transmission and distribution network in each of the ACT, SA and TAS. While there are multiple networks in QLD, NSW and VIC, each is a monopoly provider in a particular area. For example, Ausgrid, Endeavour Energy and Essential Energy operate monopolies in NSW. The distribution and transmission sectors are not generally integrated, although there is some common ownership in the distribution and retailing sectors in TAS and the ACT.

Gas

AEMO operates the wholesale and retail gas markets of eastern and southern Australia and oversees the gas transmission network in VIC.

In addition, AEMO is responsible for national transmission planning and the operation of the Short-Term Trading Market (STTM) for gas. The STTM is a market-based wholesale gas balancing mechanism that has been established at defined gas hubs in NSW, QLD and SA. The STTM facilitates the short-term trading of gas between pipeline owners/operators, shippers and gas producers. VIC does not participate in the STTM, and has established its own wholesale gas market which producers, transporters, retailers and end users all engage in.

Telecoms infrastructure

The telecommunications networks (fixed and mobile) in Australia are predominantly privately owned by a number of service providers.

Telstra, a wholly privatized company offering a full range of telecom services, is Australia’s largest telecommunications provider and dominates ownership of the fixed-line network. Control of the wireless telecommunications sector is predominantly shared between three privately owned service providers, Telstra, Optus and Vodafone.

The Commonwealth Government is currently investing in fiber-optic, fixed wireless and satellite infrastructure to develop, construct and deliver Australia's first national wholesale only, open access broadband network (the National Broadband Network, or NBN) through a government-owned entity which is classed as a government business enterprise, NBN Co Limited. The new infrastructure will replace the existing broadband infrastructure, aiming to create quicker and more consistent broadband service and provide opportunities for development of improved asset management systems. The regulatory framework for the NBN provides that the Australian Government will retain full ownership of NBN Co until the national broadband network rollout is complete, which is anticipated to be in 2021.

Transport infrastructure

Public transport networks in Australia are predominantly government-owned and operated, across the three levels of government – federal, state and local, with certain exceptions where networks have been franchised, privatized or governments have entered into public-private partnerships.

Rail

Typically, the infrastructure and assets for rail networks in Australia are owned by state governments or the federal government. The operation of trains in Australia is commonly franchised by the government and outsourced to the private sector. The passenger networks in each state and territory are typically owned by government entities. The railway infrastructure in QLD, TAS, VIC (for non-interstate lines), SA (for non-interstate lines) and the NT are integrated. The mainland interstate track is, for all states and territories except the NT and TAS, owned, leased, maintained and controlled by a federal government owned corporation (the Australian Rail Track Corporation), however, the interstate freight operations in Australia are wholly commercial, being privately owned and operated.

Roads, bridges and tunnels

The operation, maintenance and improvement of roads in Australia is largely the responsibility of local governments, with the exception of the arterial road network and most local roads in unincorporated areas which are the responsibility of the state and territory governments. The federal government also shares responsibility with the states and territories for a defined national network of road transport corridors and rail-road inter-modal connections. The delivery, operation and maintenance of such infrastructure is often outsourced to the private sector. For example, management of toll-roads (including the design, build, financing, operation, maintenance and collection of tolls) is typically outsourced to the private sector on a full concession basis, with the states and territories holding the perpetual lease over toll road land.

Aviation

Aviation infrastructure in Australia is typically government-owned. All federal airports are located on government-owned land and are under long-term leases to private entities. There are significant restrictions on ownership of airport-operating companies under the Airports Act 1996 (Cth), including a 49% limit on foreign ownership, a 5% limit on airline ownership and a 15% limit on cross-ownership between paired airport operator companies. The majority of all other Australian airports are owned and operated by local government authorities, with a small number operated by the private sector on the government's behalf, or both owned and operated by the private sector for public use. The aviation regulator in Australia is the Civil Aviation Safety Authority (CASA). The government has influenced market structures to combat competition issues, for instance prohibiting the cross-ownership of airports.

Maritime and ports

The ports in Australia are typically owned by the state and territory governments, however, the operation of, and investment in ports is largely privatized, with port assets typically privatized on a long-term lease basis.

Infrastructure Australia, a government body, oversees rail, road, airports and other infrastructure at a national level.

Other infrastructure

Water

State and local governments are typically responsible for the ownership of infrastructure and delivery of water services in Australia, generally through government-owned companies. The operation and management of water in SA has been privatized, and local utilities in VIC have been largely privatized. Water utilities are regulated across the states and territories by the relevant State authorities.

Defense

Typically, defense assets are owned by the public sector.

Education

The education sector in Australia consists of both public and private institutions. Governance and management of education is split between the three levels of government. For instance, the majority of universities operate under State and territory laws and regulations, while early child education facilities operate under the guise of local governments. The Australian Government's Department of Education has the primary responsibility of distributing funding and developing policy in regards to childhood education, higher education, vocational education and training, international education and research.

Waste

The waste management systems in Australia are the responsibility of state, territory and local governments. The sector is a mix of both public and private operations. The Australian Government is responsible for waste management policy. The private and public sector are involved in all forms of the waste management process.

Are there special rules for investing in energy and infrastructure?

Generally

Energy and infrastructure markets in Australia, similar to other developed nations, operate in a heavily regulated environment. There is no specific regime governing or restricting investment in energy or infrastructure in Australia over and above existing regulation for investors and funders more generally. When making an investment, the legal and regulatory position relevant to the underlying project must be considered. For example, a project relating to a hospital will require various environmental and planning approvals, consents, building and operating permits, and work-health and safety accreditations.

Australian Competition and Consumer Commission 

The ACCC regulates a range of infrastructure services, such as energy, communications, water and smaller markets with limited competition. While the ACCC acts as an overarching regulator, investors, owners and operators must also comply with both State and industry-specific regulation. The ACCC facilitates the National Access Regime, which encourages third party access to nationally significant infrastructure services. The ACCC assesses access undertakings lodged by the owners or providers of infrastructure services.

FOREIGN INVESTMENT REVIEW BOARD

All foreign investment proposals in Australia above certain thresholds, determined on a case-by-case basis, are reviewed by the FIRB to ensure such investments are not contrary to the national interest. Notification and approval of foreign investment will differ depending on the type of transaction (i.e. telecommunications or energy transaction), or the type of investor (i.e. private sector or foreign government investor).

FIRB aims to provide a decision within 30 days of being notified. Once formally notified, the Treasurer has 30 days to make a decision and a further 10 days to notify the parties concerned of the outcome. If these timeframes are not met, the Australian Government loses the ability to block the proposal or impose conditions on it. The government may, however, extend the process by up to 90 days by issuing an interim order.

Key sector-specific issues are flagged in the sections below.

Energy

The energy markets in Australia have a complex system of arrangements between suppliers, generators, transmission and distribution which are moderately regulated. Regulation and market oversight of the energy sector is split between the Australian Energy Regulator (AER) (for all states other than WA) and the Australian Energy Market Commission (AEMC).

The National Energy Retail Laws and National Energy Retail Rules, establish a national energy customer framework for the regulation of the retail supply of energy (electricity and gas) to customers where the NEM applies. The laws aim to promote retail competition and empower customers to negotiate energy contracts. The NEM operates on a relatively competitive basis, with generation, transmission and retailing assets split in each state and territory. The market operates with streamlined regulations, limited barriers to access, and minimal direct government intervention. In WA and the NT, where the NEM does not apply, energy is regulated by the Economic Regulation Authority (ERA) and the Utilities Commission, respectively.

Under the NEM, an authorization issued by the AER is required prior to engaging in the retail sale of energy, unless an exemption applies. Under state-based authorities, transmission and distribution businesses are required to be issued with a license before providing transmission and distribution services. Applications must be lodged with the state based regulator and an associated fee will apply.

It is important to note certain infrastructure assets are subject to more stringent safeguards on pricing and staffing, in an effort to preserve community expectations. For example, in the recent sale of Ausgrid (in October 2016), the NSW government implemented legislation prescribing the minimum number of employees the buyer would have to maintain until 2020, and the categorization of employee.

Recently, increasing demand for ‘clean’ energy, alongside firm environmental regulation, has presented concern for external investors wishing to invest in Australia’s energy sector. In 2015, the federal government increased Australia’s Renewable Emission Target to 23.5% of Australia’s electricity generation being sourced from renewable sources by 2020. Investors need to understand how environmental and technology changes may impact on the overarching regulatory framework and should consider whether the acquisition of any interests in the energy sector (at an entity or asset level) would cause any issues with license conditions or the granting of specific subsidies.

Telecoms infrastructure

The telecommunications sector in Australia operates in a competitive market, where the regulatory barriers to entry are limited. The telecommunications sector has two main regulators:

  • The ACCC which operates under the Competition and Consumer Act 2010 (Cth) prohibits and prevents carriers engaging in anti-competitive conduct, breaching record-keeping rules or breaching access rules.
  • The Australian Communication and Media Authority (ACMA) which operates under the Telecommunications Act 1997 (Cth) and has responsibility over technical matters (i.e. carrier licensing, service provider licensing and number portability). The cabling industry is regulated by the Telecommunications Cabling Provider Rules 2014 (Cth) (CPRs).

The ACCC's access regulation plays a key role in the increase of infrastructure and retail competition in the telecommunication sector. For example, the ACCC assisted opening access to Telstra's line services, increasing competition in retail and broadband networks. ACCC regulation is commonly higher in areas of insufficient competition, namely transmission routes in regional and outer metropolitan areas.

There are two different types of individuals or entities that may provide telecommunication services to the public – being carriers and carriage service providers (CSPs). Carriers are owners of telecommunications networks unit that supply carriage services to the public. The ACMA requires carriers to obtain a carrier license and to comply with certain obligations under the license, unless an exemption applies or the authority allows for nominated authority declarations, whereby another party to takes on the responsibilities of a carrier for a network unit. The Minister for Communication also has the authority to impose license condition declarations, whereby further license conditions are imposed on certain classes of carriers. In contrast, a CSP, a person or entity that supplies a carriage service to the public using a network unit (i.e. internet service providers) is not required to hold a carrier license.

Under the CPRs, all cabling work is required to be performed by a registered cabler or under the express direction of a registered cabler. Cablers are required to register with an ACMA-accredited registrar.

Transport infrastructure

The National Transport Commission operates under the National Transport Commission Act 2003 (Cth) as an independent advisory body with the aim of enhancing safety, productivity and environmental performance of Australia's transport systems. The body provides impartial advice and reform proposals through the Transport and Infrastructure Council.

Rail

The Office of the National Rail Safety Regulator (ONRSR) is responsible for the implementation of safe rail operations and controls a singular set of rail safety laws in Australia, with each state and territory (except QLD) passing enabling legislation to give effect to the Rail Safety National Law. Rail Transport Operators must obtain a license that certifies the competence and capacity of the operator to manage the risks associated with railway operations. The accreditation is required prior to commencing any railway operations.

Roads

The state and territory governments each have government departments which administer the National Prequalification System for Civil (Road and Bridge) Construction Contracts (NPS). The NPS separately takes into consideration the financial and technical capacity of contractors and identifies prequalification categories for road construction, bridge construction and financial levels (referring to financial stability, solvency and capacity to manage cash flow), against which the NPS assesses the capacity of a contractor to undertake contracts of varying risk and complexity. Austroads is the key organization responsible conducting strategic research on transport developments, provides guidance on the design, construction, management and infrastructure of road networks.

Other infrastructure

For most infrastructure assets in the private sector, it is likely that there will be a ‘change of control’ provision requiring the regulator or controlling government to approve the new owner. On publicly-procured infrastructure, it is quite common for long-term projects to have a 'change in control' clause which restricts change in ownership structures of the private sector. For example, in most sectors there is a restriction on change in control during the construction period but this is often relaxed post construction provided any change in control is not to an 'Unsuitable Third Party'.

What is the applicable procurement process?

In Australia, procurement of infrastructure projects is almost invariably carried out on a contestable tender basis. A contestable tender basis is deemed to be a fair, transparent and competitive way to obtain value for money. Such contestability may be publicly advertised or sought from a formal pre-qualified list of bidders or informally sought from a private list of contractors. Some states do, however, have unsolicited proposal regimes whereby the private sector may directly approach Government with a proposal for infrastructure development and then be awarded the rights on an uncontested basis, but there are strict criteria that apply.

Investing in energy and infrastructure

There is no body of public procurement law. Procurement by the state and federal governments is governed by a mixture of policies such as guidelines and codes of practice, statute, regulations and common law.

While private sector procurers of construction services are generally free to set their own ‘rules’ of procurement, they can still be exposed under statute (for example under the Australian Consumer Law) or at common law. Procurers will find themselves exposed to these laws if they either do not follow the process which has been specified in the tender documentation or if they make inaccurate representations about the way in which the tender process will be managed or contracts awarded. Conversely, bidders may be exposed to common law process contract challenges if they withdraw during evaluation.

In addition to the infrastructure research and advisory bodies established by some states and the federal government, each government agency has at least one designated department or body which develops and implements policy applicable to procurement of infrastructure projects. In some cases specialized policies will apply to particular types of procurement such as defense, health infrastructure and the delivery of Public-Private Partnerships (PPP) and unsolicited proposals. In addition, government agencies which procure a large amount of infrastructure (for example statutory road management agencies) often have their own internal policies and procedures applicable to the procurement of that work.

For projects with a value in excess of AUD10 million, many government agencies have implemented a system of audits, checks and balances to seek to ensure that the tender and procurement processes are competitive, transparent and compliant with the relevant rules and policies. This means that many government agencies are required (or choose) to:

  • appoint a probity (fairness and honesty) auditor to audit the tender process for the project;
  • engage a probity advisor to provide ongoing advice to the agency in relation to management of the tender and tender queries; and
  • participate in periodical reviews (sometimes known as ‘Gateway’ reviews) in order to benchmark, test and check the business case for the project.

Statutory regulation of government tenders

The Australian Consumer Law (and state based Fair Trading legislation) will prohibit certain kinds of behavior and conduct during the course of a procurement, for example, misleading and deceptive conduct. Bid rigging, cover pricing and certain other collusion between tenderers is prohibited under the Competition and Consumer Act 2010 (Cth).

To avoid the possibility of collusion or corruption, tenderers may be asked to provide a statutory declaration that there has been no collusion in the tender process with other tenderers.

To emphasize the transparent nature of government tendering, many government agencies are often now required by statute or policy to publish detailed information:

  • identifying the successful tenderer;
  • specifying the tender prices submitted by all tenderers; and
  • detailing the nature and form of contract executed in respect of the works;

Additionally, government agencies may be required to disclose information under Freedom of Information legislation or through pre-trial discovery processes.

Policies, guidelines and codes of practice

There are numerous policies, guidelines and codes of practice which govern procurement of infrastructure by government agencies at all levels of government. Many government agencies also have specific policies directed at the delivery of projects by different forms of procurement such as a PPP or alliance contracting. In some cases, such as the Commonwealth Procurement Rules issued by the federal government, there are rules dealing specifically with when competition in a tender process may be limited, and additional requirements for procurements at or above a certain threshold.

The core objective of the Commonwealth Procurement Rules is to ensure that value for money is obtained in federal government procurement. The value for money principle requires consideration of all relevant financial and non-financial costs and benefits of each proposal including whole of life costs (such as any maintenance costs or costs in connection with a dispute). The Commonwealth Procurement Rules state that value for money is enhanced in government procurement by:

  • encouraging competition and being non-discriminatory;
  • promoting the use of resources;
  • making decisions in an accountable and transparent manner;
  • encouraging appropriate engagement with risk; and
  • ensuring that the procurement process is commensurate with the scale and scope of the procurement.

Financing energy and infrastructure

There are three general ways that can be implemented to allow the private sector to assist deliver infrastructure:

  • traditional procurement using government financing;
  • corporate financing using private financing; and
  • project financing using private financing.

PPPs are often perceived as a way to improve or create public infrastructure without hindering on government funds and budget constraints.

What are the most common forms of funding / investing in energy and infrastructure?

The principal forms of private sector funding/investment in energy and infrastructure in Australia (including in relation to PPPs) are as follows.

Funding

Common forms of funding in energy and infrastructure include:

  • debt finance, including:
    • loans made on a project finance basis;
    • loans made on a corporate finance basis (balance sheet debt); and
    • mezzanine debt;
  • asset sales;
  • federal grants;
  • value capture;
  • concessional loans;
  • asset finance or hire-purchase arrangements; and
  • subordinated shareholder loans.

Project finance

Generally, project sponsors prefer debt to be secured on a limited-recourse basis. Limited-recourse means that financiers only take security over the assets of the project itself and its outputs (including revenue) rather than any wider assets of the sponsor and its corporate group This preference is largely driven by the fact that it is only the project’s assets and revenues which are ‘at risk’ of enforcement. This approach enables project sponsors to retain flexibility with respect to their other ventures.

A common structure for project finance involves incorporating a special purpose vehicle for the project (Project Co). The Project Co then enters into a range of documents for the delivery of the project including the project documents (relating to construction and operation of the project) and the finance documents (relating to the financing of the project).

In order to secure this funding, the project needs to stack up from a ‘bankability’ perspective. In essence, bankability is a term used to describe:

  • the willingness of financiers to fund the project based on security of cash flows (in and out) of the project; and
  • the minimization of any residual risk held by the Project Co receiving the funding.

Corporate finance

Debt based on corporate finance facilities may be utilized where a project is not sufficiently bankable to receive limited recourse finance. Such facilities may be made on an aggregated basis so that a variety of smaller projects create a portfolio of assets. Recourse for the financier to security is limited to the security based on that portfolio of assets with all assets being cross-collateralised. Alternatively, such facilities can be full recourse, meaning financiers may have recourse against all assets of the relevant companies within the corporate group of the Project Co.

Bonds

While debt-based bond funding is available for project finance, the Australian bond market:

  • currently lacks longer tenor instruments to provide the long-term certainty that is often desired in the infrastructure project finance market; and
  • is often considered too small to support the funding needs of Australia’s mega projects.

It is now becoming increasingly common for those seeking bond debt to access the US and Asian bond markets instead.

Investing

Australia's superannuation funds have been predominate investors and experts in Australia's infrastructure sector over the past two decades. It is common to see large fund managers or infrastructure investment teams partner with Australian superannuation funds to participate in the infrastructure market. These specialists often compete with overseas investors and entities such as Chinese state owned enterprises.

Common forms of investing in energy and infrastructure include:

  • equity investment in special purpose vehicles or entities that may have a portfolio of interests (i.e. share capital); and
  • secondary market investment in operational projects.

Standard form documentation may be used when entering into an energy or infrastructure transaction in Australia. Standard forms include:

  • Australian Standards (Standards Australia);
  • PC-1 1998 (Property Council of Australia);
  • Australia Building Industry Contract (Master Builders' Association and Royal Australian Institute of Architects);
  • FIDIC (international Federation of Consulting Engineers); and
  • NEC3 (Institution of Civil Engineers)

It is important to note that these contracts are heavily amended and bespoke contracts are often used for alliances, PPPs or hybrid models.

Onno Bakker

Onno Bakker

Partner
DLA Piper Australia
[email protected]
T +61 2 9286 8260
View bio

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