Physical/natural characteristics of a sector
a) Transport
| The major sector issues in the transport sector include: • System integration, network expansion (urban transport) | Sectoral issues in transport |
| • Service integration between different operators and across different modes, common ticketing system, PSO (urban transport) • Interconnection between systems, access to common infrastructure facilities by service operators, passenger and cargo traffic rights (road and rail) • Lateral access control, safety and parting of communities on two sides (road and rail) • Intermodal transport development and operation (for all modes) • Traffic rights, safety and security, further expansion (port and airport and other facilities such as ICDs and freight villages, etc.) |
Some of these issues, many of which are interrelated, are discussed next.
A major direction of development in improving transport services (for both passengers and goods) is the integration of services provided by multiple operators often using different modes over a wide geographical area. Successful integration programmes can allow seamless travel between two points without the necessity of making separate payments for each segment of the trip and reduce the hassles of transfer at intermodal terminals or transfer points. Integration can make transport cost cheaper and journey time shorter.
Integration can occur at three levels: physical integration, operational integration, and institutional integration.
| Physical integration is the lowest level of integration. It refers to the provision of jointly used facilities and equipment. Such facilities may include intermodal terminals, transfer points or stations, transit shelters, standardized identification symbols and display techniques used by all modes and services, etc. Efficiency, comfort and safety at transfer points are of vital importance for consideration. | Issues in physical integration |
| Operational integration of services can be considered as the second higher level of integration. It allows matching of modes according to service requirements and rationalization/reorganization of existing services. Faster and high-capacity long-haul modes such as rail transport can be used for high-density travel corridors, while lower capacity road-based modes such as buses and trucks can be used as feeder to these high-capacity modes. Operational integration can also help eliminate wasteful duplication of service by competing modes and resources can be redeployed where they are better utilized. Another important feature of operational integration is unification of the tariff structure. A single tariff structure can be established to permit users pay at the beginning of the trip and transfer freely between all modes or lines of service covered by the system. | Issues in operational integration |
| Institutional integration refers to the creation of an organizational framework within which joint planning and operation of transport services can be carried out by a number of independent transport operators. Such organizational framework, however, can take different forms. There can be an organizational arrangement for setting a joint tariff and collection and distribution of jointly collected revenues. This type of arrangement works well where partners provide complementary services, do not compete but rather make end-to-end connections. The partners can go beyond this revenue collection and distribution by setting up a framework to coordinate routes and schedules. They can also establish a federated agency and delegate to it powers related to planning, joint facilities, tariffs, charges for the use of common infrastructure, revenue distribution and any other matter they consider appropriate. However, when multiple operators are to share common infrastructure facilities to run their services, such as a dedicated railway track or transport route, a much stronger form of institutional integration is necessary. | Issues in institutional integration |
| Another major issue that also involve integration is intermodal freight transport. Intermodal transportation utilizes the inherent advantages of each mode involved, creating synergies and efficiencies not otherwise attainable. The service provided is different from and superior to that available from either mode alone. Carriers joined in intermodal combinations seek to provide a complete service from origin to destination. Carriers whose services have historically been restricted to one mode of transportation are transforming into large multi-modal companies through joint ownership or contractual agreement. Whether used to create new types of service, to lower rates to attract more traffic, or to lower costs to increase profitability, these arrangements are reshaping transport development of the present time. | Integration in intermodal freight transport |
b) Power/Energy
The availability of reliable and quality power/energy at competitive prices to industrial, commercial and domestic consumers is the main challenge of this sector. A comfortable level of spinning reserve is also needed to ensure grid security and quality and reliability of power/energy supply. In this respect, it is important to impose mandatory reliability standards on the bulk transmission system.
Open access in energy transmission to promote competition amongst the generating/producing companies who can sell energy to different distribution licensees is a major sectoral issue. When open access to distribution networks is introduced for enabling bulk consumers to buy directly from competing power generators or energy producers, competition in the market should increase the availability of cheaper and reliable energy supply. The transmission line infrastructure provider/regulator needs to provide facilitative framework for non-discriminatory open access. This requires load dispatch facilities with state-of-the art communication and data acquisition capability on a real time basis. These general conditions, among others, are important to consider in a PPP project.
The major issues in this sector are:
• Market structure
• Unbundling of the sector (generation, transmission, distribution and sales)
• Imposition of security, and quality and reliability standards on the common energy/power transmission lines
• Access to common energy power/energy transmission lines
• Facilitative framework for non-discriminating open access to common infrastructure facilities . Source of energy, method of exploration, extraction, etc.
• Choice of technology
• Waste heat recovery and cogeneration
• Waste and waste water treatment and disposal
• Safety and environmental issues
c) Communication
The sector and market structures are two major issues in this sector. The other major issues relevant to PPPs in this sector include:
• Interconnection with other operators (technology, fee, management of interconnection facility, monitoring of call and data transfer between operators)
• Internet, Voice over Internet Protocol, IP telephony, Asymmetric Digital Subscriber Line (ADSL) and other data transmission technology
• Upgradation of technology (for example, from 2G to 3G in mobile telephony)
• Radiofrequency allocation and utilization
• Reallocation of radio frequency after the expiry of contract period
• Revenue sharing between operators as well as between the government and the operator (in lieu of any licence fee or in addition to such fees)
• Sharing of communication infrastructure facilities between operators
• International gateway (telephone, Internet, VOIP)
• Value-added service provided by telephone service operators
• PSO
Radiofrequency spectrum management is the major issue related to utilization of this scarce natural endowment. The major concern is the efficient utilization of the limited band of spectrum available for all radio communication services. Following the guidelines of ITU and other international/multi-lateral bodies, countries have their own national frequency tables. Within the permitted band of frequencies, national regulators have flexibility to vary allocations for competing communication services according to local circumstances.
The two issues concerning spectrum allocation that needs to be considered in a PPP project are ensuring technical efficiency and economic efficiency of resource utilization. Technical efficiency refers to the requirement that different users and uses of radiofrequencies should not interfere with each other. Economic efficiency on the other hand refers to a rationale regarding the allocation of limited frequencies among alternative uses to provide various types of communication services. To ensure economic efficiency of utilization, some form of pricing will be required. Therefore, economic value of spectrum needs to be considered in the allocation decision. Since the economic valuation of the spectrum may change over time, a mechanism may be considered to allow reallocation of the spectrum as market valuations change. The reallocation mechanism can be a part of the sectoral policy framework, which may then be translated into regulatory guidelines by the sector regulator and included in the concession contract accordingly.
d) Water
Water is the most basic of all resources that humans need. The type and level of activities in an area much depends on its availability. Water may be obtained from surface sources such as lakes, rivers and seas or from the underground. Whatever may be the source, in most cases only a limited amount of water may be available/exploited on a sustainable basis. In order to ensure the optimum utilization of this vital resource, a decision may be required on how much water may be exploited from available sources, particularly when the available water may have other alternative as well as competing uses. This decision on the limits of exploitation should be based on true cost. The main issues in this sector include:
• Sector structure
• Sources of water and the limits of their use for a particular purpose
• Creation of reservoir and other means of storage
• Treatment, disposal and recycling, and use of waste water
• Service area
• Storm water management (including harvesting of rain water)
• PSO (fire service) and other service obligations