UK: OFT Publishes Final Report on Infrastructure Ownership

Last Updated: 15 December 2010
Article by Susan Hankey, Siobhan Costello and Caroline Hobson

The OFT has published its final report on infrastructure ownership and control stock take.   Prompted by significant changes in the ownership structures of infrastructure assets the OFT decided to map core infrastructure owners in the UK and assess how ownership structures impacted on consumers.  The OFT announced its intention to conduct a stock take of ownership and control across the UK economic infrastructure in May of last year.  See our previous  law-now for further information.

Type of ownership

The OFT has found that there is a greater use of private unlisted ownership with around 31% of infrastructure assets now being held in private companies and direct investment from investment funds, banks, pension funds and so on.  Around 42% of infrastructure assets are held in public listed companies either listed in the UK or as part of a larger foreign listed group. Public ownership makes up around 18% of infrastructure assets and 9% are various forms of not-for-profit structures (trusts or companies limited by guarantee).


The OFT found that there is widespread global investment in UK infrastructure, although the majority of owners remained based in the UK.  The ownership map also suggests cross-ownership both within the same sector (covering potentially competing assets) and unrelated assets across different sectors.   The OFT reported that of the 30% owners who had stakes in more than one asset, almost half had cross-ownership within a single sector.  11% of owners had stakes across two sectors and 6% had stakes in three or more sectors.

Impact of ownership

The OFT examined whether the type of ownership of UK infrastructure had any impact on consumers.  The OFT found some evidence that infrastructure asset prices have been rising over time which led to some concern that infrastructure funds might have an incentive to overpay for assets and pass these acquisition costs to customers in the form of higher prices. However, the OFT concluded that it had seen no evidence of systematic overpayment of assets by investment funds. 

The biggest impact of ownership type came from the distinction between normal commercial providers and "not-for-profit" or non-conventional companies.  There was some concern expressed that non-commercial entities are able to operate more cheaply because of implicit cross-subsidy from the owner, which distorts competition with private operators but does not accurately reflect underlying costs.  Further, due to the lack of shareholder pressure, non-commercial entities are likely to have weaker incentives to make efficiency savings. There may also be difficulties in regulating unconventional companies because they do not respond to commercial incentives in the same way as private firms. In a monopoly context, regulators argued that they do not typically regulate companies differently based on ownership structure but they do have regard to what the ownership structure implies for incentives.

Overall the OFT does not believe that type of ownership is the primary driver of outcomes for consumers.  Where there is competition in the market, the overall objective of owners may be of less concern.  But where there is market power and the infrastructure assets are not regulated there can be concerns around the absence of incentives to outperform and make efficiency investments.  Although the OFT found some evidence of rising asset prices resulted from repeated changes of ownership, its view was that this was more likely to reflect the underlying market power of the asset than the impact of the ownership type.

Market power

Ownership of infrastructure assets often confers a degree of market power due to the lack of competitive constraints.  Where there are sector regulators, the risk of exploitation of that market power is typically managed through price regulation, output incentives, regulated standards of service and restrictions on vertical integration to prevent exclusion at the wholesale level.  

Outside of the regulated sectors, the very existence of market power does not mean that a competition authority should necessarily intervene. The OFT indicated that it is likely to intervene where there is likely to be harm as a result of market power.  In determining whether to intervene the OFT will consider whether: (i) the problem could be solved by the market (eg where the emergence of market power is short-lived because entrants are able to undercut the monopoly pricing of an incumbent); (ii) the source of market power might be the result of innovation or competition for the market (intervening to address market power that has been the result of innovation or competition could risk deterring future innovation and/or investment); and (iii) there is likely to be a big impact (the OFT will consider the magnitude of any harm, such as the level of exploitative prices, number of consumers affected and likely duration of harm).  The OFT will further consider whether it was likely that a proportionate and effective remedy might be available. 

The OFT carried out case studies in four infrastructure sectors – ports, waste, toll roads and car parks, chosen primarily because they are not subject to independent regulation.  For more information on the outcome of the case studies conducted by the OFT please click here.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 10/12/2010.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.