Infrastructure is the set of basic facilities and networks intended to provide households and companies. These facilities must guarantee the proper functioning of society and the economy. Infrastructure is therefore the backbone of a society. The concept of infrastructure therefore includes both public and private facilities that are necessary for the functioning of a society. In addition to the distinction between public and private infrastructural facilities, a distinction is also made between technical and social infrastructure.
Public and commercial infrastructure
A prerequisite for growth and prosperity of a region and society is a well-developed and functioning infrastructure.
In general, infrastructure can be divided into:
- public infrastructure;
- commercial infrastructure.
Infrastructure broken down by sector
In addition, infrastructure can also be broken down by sector:
- transport: for example (toll) roads, bridges and tunnels, ports and ferries, airports and airport-related services, railways, public transport (bus and train);
- the service economy: for example oil and gas supply, energy generation, storage and distribution (including renewable energy), water supply and sanitation, waste management, communications networks;
- the social infrastructure: for example public and private partnerships, healthcare facilities and public administration, educational facilities, the defense system.
Investments in infrastructure
Investments in infrastructure facilities exhibit certain typical characteristics:
- infrastructure systems require very high investment contributions and are therefore very capital intensive and therefore have high entry barriers;
- as a rule, they have a very long life and useful life;
- infrastructure projects are usually heavily influenced by national and regional governments and are often regulated by legislation or regulations;
- the cash flows of infrastructure works often correlate very strongly with inflation on both the revenue and expenditure sides;
- Due to their essential importance for the provision of the population and industry, they exhibit relatively stable use and therefore generate relatively stable cash flows.
Ongoing globalization as a driving force
Both emerging economies and industrialized countries will invest billions of dollars or euros in the coming years in the development and expansion, as well as the maintenance of roads, railways, energy and supply networks, ports and airports and social infrastructure such as schools or hospitals.
The biggest driving force is ongoing globalization, the resulting mobility of people and goods, as well as ever-changing living conditions such as:
- capacity limitations;
- personal mobility,
- migration movements;
- the aging of society.
The public infrastructure
Western industrialized countries, and the Netherlands in particular, are characterized by an established and well-developed infrastructure, which is often provided by the public sector. Major public infrastructure facilities include:
- the public road network;
- the highway network;
- airports;
- port facilities;
- healthcare;
- educational facilities.
However, the prevailing problem in the United States, Europe and the Netherlands is that the existing public infrastructure is partly outdated and urgently needs to be adapted to our changing lifestyles and capacity needs. At the same time, government financial resources are limited and will remain scarce in the medium and long term as a result of the current economic and financial crisis and collapsing tax revenues.
The commercial infrastructure
The name commercial infrastructure encompasses numerous industrial infrastructure projects and investments, such as:
- utilities, for example electricity or gas;
- installations for the generation of sustainable energy;
- waste and incineration plants;
- fuel depots owned by companies.
Companies make this infrastructure available to society directly or indirectly by providing the population with certain services or by providing other companies with the help of this infrastructure.
Such infrastructure is often highly regulated and subject to certain legal (minimum) requirements, which are determined by the government. Such regulations should enable secure and sustainable use for citizens and businesses as well as non-discriminatory access to monopolistic infrastructure facilities.