There appears to be some market consensus on the existence of two types of infrastructure projects:
∙ Social infrastructure: These projects involve the building and/or operation of infrastructure assets to support the provision of public services. Typically, public authorities will continue to pay for this infrastructure. Examples include health facilities, schools, housing, and prisons.
∙ Economic infrastructure: These projects support economic growth by providing and operating infrastructure needed for a country or region to function. This kind of infrastructure often has monopolistic characteristics and/or may be subject to price regulation. Often individual users will pay directly for such infrastructure. Examples include transport facilities, utilities (water, gas, and electricity), and telecommunication networks.
Some groups of projects could be described as "commercial infrastructure." Examples are projects that meet the high-level definition of being capital-intensive and generating long-term cash flows. However, these projects are open to commercial competition or may be speculative in terms of pricing. Examples of such projects are cable networks and satellites. For the purposes of this Report, we consider these groups of projects to be a subset of the economic infrastructure category rather than a separate grouping.
Another way to assess the type of infrastructure is to consider the source of revenue that will pay for it. In essence, there are two sources: (1) public funding through national taxation and (2) direct user charges. The two ends of the spectrum of payment sources show how these sources might point to distinct categories of social and economic infrastructure. In between there may be various types of subsidies, such as viability gap funding (see Case in Point 3 in Chapter 3.6). The level of reliance on public-sector support or subsidy will have an impact on the government or public authority's choice of contract and financing approach.