ASi" kUCTURE FlOR DEVELOPMENT

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.IMP
Setting priorities and
implementing reform
The potential for improving performance hi infra- Onoq Ak Punuc owNEtsHIP AND PUBUC OPERAstructre
ovisonand investnent is substantiaL as noN. In nearly all infrastructure sectors, the most
is the quantity of resources devoted to inrtruc- common vehidce for ownership and operation is a
lure Thus, both the need and the broad diection for public entity-a parastataL public enterprise, pub-
.eform are dear Additional inestment will obvi- lie authority, or government department-owned
ously be needed-but more invesment will not in and controlleed by the central, regional, or local govitself
avoid wasteful inefficenaes, improve mainte- emmunent As described in Chapter 2, the delivery of
nance, or micease user satisfacti Achieving these services is better caried out when public orpaizaimlprovements
will require thee broad actions; ap tions are run on commercial lines, freed from govplying
commercial principles to infristructure oper- emient budget and cvil service constrints and
ations, encouraging competition from appropnately subject to normal commercil codes and regulaeguilated
private sector providers, and incrng tidons C;ompetition from private firms pressures
the involvement of users and other staleholders in public providers to inprove their perfonnance and
planning, providin and monitoring infrastructure should not be preventedby regulatory or otherbarservices.
These adusitments caR not only for policy riers. Using private contractors for dearly defined
changes, but also for findamental institional services, such as mainenance of public utilities,
changes in the way that the "businss" of infrastruc- provides experience that can gradually be extended
ture is conducted. Four major options (introduced to full operation by the private sector through
hi Chapter 1) are, available for effecting such leases or concessions (Option B), as both public and
changes to improve infrastructue provision and private parties gain finiiatv and confidence with
performance and to expand the capacity to provide partnership.
inrstructure services-
OvnoN B: Pusuc ONEr AND nuvAm OPERA-
Choosing anong alternatives: institutional
nON. Through concessionLs or leases, the public secoptions
and country conditions tr can delegate the operation of infrastructure facilities
(along. with the commercial risk) and the
Institufional options responsibil for new investment to the private sec-
-tor As detailed below, the rights to use publicly.
The four institutional options represent different al- owned assets or to provide exclusive areas of serlocations
of ownership, financing, and operation vice vary by infastucture secto Port leases allow
and maintenance responsibilities, and also of risk the use of public facilities, while municipal solid
between government and the. private sector c(able waste collection ontracts award service rights but
6.1). These options are not exhausive but are repre- usually not excldusive use of publicly owned facilisentative
pc.nts on an underlying continuum of in- ties. Leases and concessions permit private sector
stitutional alternatives,
management and fmiancing without the disman
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