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Written by KPMG and Bocconi University February 2018
Study on State asset
management in the EU
Final study report for Pillar 2 – EU28 Summary Report
Contract: ECFIN/187/2016/740792
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EUROPEAN COMMISSION
Directorate-General for Economic and Financial Affairs
Directorate Fiscal policy and policy mix and Directorate Investment, growth and structural reforms
European Commission
B-1049 Brussels
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EU28 Summary Report
This fiche summarizes and put in perspective at EU level the country-specific analysis
presented in each of the 28 Country Fiches of this report. It provides a tentative overview of Non-financial assets owned by the Public Sector across the EU28
Countries.
Caution is warranted for cross-country comparisons. The information presented here
should be viewed as a first step in drawing a fuller picture of governments’ portfolios
in comparative perspective. To allow for a more comprehensive analysis, further development of the statistics would be needed in order to achieve broader data
coverage and to address differences in accounting methods.
1. OVERVIEW OF OWNERSHIP MODEL BY CLUSTER OF ASSETS BY COUNTRY
As it has been previously stated in the relevant Methodological Notes, Pillar 2 aims at
mapping and assessing the economic value of Non-financial assets included in General Governments’ portfolios across the EU28. This has been done by selecting and
analysing eight specific clusters of Non-financial assets, namely,: Dwellings, Buildings other than Dwellings, Ports, Airports, Roads, Railways, Mineral and Energy Reserves,
and Other natural resources (Figure 1).
Figure 1 Non-financial assets mapped in Pillar 2
Source: KPMG elaborations.
(1) For more details on the choice of Non-financial assets mapped in Pillar 2, please see the Methodological
Notes.
The relative value of Non-financial assets to total assets (Equity and Non-financial
assets) strongly depends on the ownership/management model implemented by the
General government, as ownership models could have relevant public finance effects1.
In all EU28 countries, assets within the Roads cluster in the scope of this analysis
appear to be owned by the General Government, which could decide to entrust their
management to one or more private companies or PSHs, or, again, directly manage
them. Since in all EU28 Countries road networks are directly owned by the State, the
road networks fall always within the scope of Pillar 2.
1 Ownership models play an important role in the value of Non-financial assets, as if their ownership is
transferred to a PSH (or any other private entity), they will not appear directly in the Government’s balance
sheet as Non-financial asset, and therefore in Pillar 2.
However, when the asset is owned and managed by the General government (or one of its bodies), the
assets (and revenues and losses associated with it) are fully recognised in the government’s balance sheets,
following the IPSAS 17 principle – “Property, plant and equipment”. Furthermore, when the assets are
granted in concessions (and, to some degree, this applies also to PPPs), following the IPSAS 32 principle,
they are recognised on the government’s balance sheets, as assets are almost always returned to the
government at the end of the service contract. Therefore, all the revenues and losses related to those
assets are recognized in the government’s balance sheets, contributing to lowering or raising the overall
public debt, respectively.
For more detail about the rules of accounting for Non-financial assets in government’s balance sheets (and
national accounts) and the potential implications on Governments’ public finances, please refer to Section
3.1 of the Methodological Notes.
Non-financialassets
mapped in Pillar 2
DwellingsBuildings
other thandwellings
Airports
MotorwaysMain and
Secondaryroads
Maritime Ports
RailwaysMineral and
Energy Reserves
Othernatural
resources
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The same happens for Natural resources, namely: Mineral and Energy Reserves and
Other natural resources. They are directly owned by the State and always fall within
the scope of Pillar 2.
With regard to Dwellings and Buildings other than Dwellings, onlythe assets directly
owned by the government are considered in the scope of this Pillar.
In 14 of the EU28 Countries, the property of the railway network has been transferred
to one or more PSHs (e.g. in France, the property of the railway network has been
transferred to Réseau ferré de France (RFF)). Therefore railway networks, for half of
the countries, have already been mapped in Pillar 1, since they are owned by one or
more PSHs. For other countries, except for Malta and Cyprus that does not have this
asset, railway infrastructures are considered within the scope of this Pillar.
Regarding the airport networks, there is not a unique model across European
countries:
in 5 countries (i.e. Spain, Germany, Finland, Latvia and Estonia) the property
of the infrastructures has been transferred to one or more PSHs (e.g. in Spain,
the property of the most of the Spanish airports has been transferred to
Aeropuertos Españoles y Navegación Aérea (AENA) SA). Therefore, the airport
networks for these countries fall in the scope of Pillar 1;
in 3 countries (i.e. Denmark, France, and Sweden) there is no unique
ownership model for airports, since the propery of some airports have been
transferred to one or more PSHs, while the others are still owned by the State
(e.g. in France aerodromes within the Ile de France are owned and managed by
a PSH (i.e. the Groupe ADP) while other airports are owned bylocal authorities.
In all these cases, only airports directly owned by the State are considered in
Pillar 2 , since the remaining are already covered in Pillar 1;
in the United Kingdom, most airport networks are owned by the private sector,
and therefore are to be considered out of the scope of this Study;
in the other 19 European countries, the airport networks are directly owned by
the State and fall within the scope of Pillar 2.
With regard to maritime ports, in 5 countries (i.e. Belgium, Estonia, Finland, Ireland, and the Netherlands) the property of infrastructures has been transferred to one or
more PSHs (e.g. in Finland the property of maritime ports has been transferred to the port authorities, that operate as private companies). Therefore, maritime port
infrastructures, for these countries, have already been mapped in Pillar 1 (since they are owned by one or more PSHs); while in the remaining ones are accounted forin
this Pillar (with the exception of countries without any maritime ports and United
Kingdom, where the majority of ports is owned by the private sector).
To conclude, it is useful to define the ownership model of non-financial assets for each
country to understand the breakdown between financial and non-financial assets. In this regard, Figure 2 provides a summary of the ownership models adopted by all
Member States.
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Figure 2 Ownership model of Non-financial assets by EU28 country, 2015
Source: KPMG elaborations.
(1) With regard to the railway network, the ownership models for Czech Republic, Latvia, the Netherland,
and Sweden pictured in the maps represent the prevalent model for the cluster of asset in the country.
(2) With regard to maritime ports, the ownership models for Belgium and Estonia pictured in the maps,
represent the prelevant model for the assets cluster in the country.
(3) With regard to the airport networks, the ownership models for Finland, Germany and Spain pictured in
the maps, represent the prevalent model for the cluster of asset in the country.
More details about the ownership models and their coverage by EU28 Member States
either in Pillar 1 or Pillar 2 are provided at the Appendix.
Directly owned by the State or not present in the Country
Owned by a PSH
Privately owned
Mixed
Legend
Maritime Ports
Directly owned by the State or not present in the Country
Owned by a PSHPrivately owned
Mixed
Legend
Railways
Directly owned by the State or not present in the Country
Owned by a PSH
Privately owned
Mixed
Legend
Airports
Directly owned by the State or not present in the Country
Owned by a PSH
Privately owned
Mixed
Legend
Dwellings, Buildings other thandwellings, Roads, Mineral and Energy
reserves, Other natural resources
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2. OVERVIEW OF NON FINANCIAL ASSETS
The value for each of these assets has been estimated through a “valuation
approach”2 (applying either the Perpetual Inventory Method (PIM) or market value). Dwellings, Buildings other than dwellings and Other natural resources are the only
assets whose values are usually mapped in national accounts. Therefore, for these assets, where available, data have been directly retrieved from publicly available
sources.
As shown by Figure 3, the estimated value of non-financial assets included in the EU’s
portfolios as a whole is equal to around 10,500 Eur Bn, accounting for about 63% of
the estimated value of all assets (including financial assets) owned by EU28 General
governments as a whole.
Among Non-financial assets Roads, Other natural resources and Buildings other than
dwellings are the three most valuable assets according to our study, accounting for
34%, 28%, and 24% of the total estimated value, respectively.
Figure 3 Total estimated value of Non-financial assets at an aggregate level for EU28
countries, 2015
Source: KPMG elaboration.
(1) Estimated values refer to 2015 as the latest available year for both financial assets and all clusters of
non-financial assets.
(2) In this chart, the “estimated value” of financial assets is reported in terms of Total Assets of the
country’s PSHs as weighted by the stake(s) owned by the Public sector into the PSHs themselves3.
(3) Since roads and railways are an illiquid asset we applied a Perpetual Inventory Method (PIM). However,
this valuation method tends to slightly overestimate the value of the asset. Therefore the chart shows
the lower bound figure of the range of road and railways valuation estimates only.
(4) The estimated value for Mineral and Energy reserves refers to the estimate computed on 2015 average
prices. Since the prices of Oil and Natural Gas can present many fluctuations over the year, the average
of all price points was used as an accurate representation of the annual value of this assets, in order to
better account for possible outliers.
In order to appropriately carry out a cross-country comparison, we compared the aggregated estimated value of Non-financial assets (i.e. those assets valuated in Pillar
2) and Financial assets (i.e. those assets mapped in Pillar 1) in General Governments’ portfolios as a whole.
As shown in Figure 4 below, the dimension of a country’s economy matters: countries such as Germany, France, United Kingdom and Italy occupy preeminent positions
2 For more detail please see the Methodological notes.
3 For more details on how Total Assets for Financial Assets are calculated, please see Pillar 1.
37%Total assets
16,553.4 Eur
Bn
Non-financial Financial
36.7%
63.3%
Illiquid assets
354.1
2,551.7 108.4
3,611.1410.5 54.3
407.3
2,977.8 10,475.3
0
2,000
4,000
6,000
8,000
10,000
12,000
Dwellings Buildingsother thandwellings
Ports Roads Railways Airports Mineraland
energyreserves
Othernatural
resources
Non-financialassets
Bn Eur
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when considering the absolute estimated values; however that’s not the case in
relation to the country’s GDP.
Figure 4 Total assets (Equity and Non-financial assets) in General Government’s
portfolios by EU28 country, 2015
Source: KPMG elaborations.
(1) The Non-financial assets includes: Dwellings, Buildings other than dwellings, Roads, Railways, Airports,
Ports, Mineral and Energy reserves, and Other natural resources.
(2) Total financial assets includes the total financial assets owned by the PSHs in the country, weighted by
stake(s) owned by Public sector into PSHs.
(3) As reported in Pillar 1, the mapping of Hungary and Lithuania’s financial assets is not reliable since there
are too many missing values to perform a reliable analysis.
However, as already shown above in Figure 2 for the EU28 as a whole, the portfolios of public assets show the same pattern across the EU28 Member States. The share of
Non-financial assets in General governments’ portfolios is higher than the share related to financial ones for most Member States. Figure 5 below shows the results of
the comparison between Financial assets and Non-financial assets across the EU28.
Figure 5 Comparison between Financial assets and Non-financial assets by EU28
country, 2015
Source: KPMG elaborations.
(1) Financial assets includes the assets owned by the PSHs in the country, weighted by stake(s) owned by
Public sector into PSHs.
(2) As reported in Pillar 1, the mapping of Cyprus, Hungary and Lithuania’s financial assets is not reliable
since there are too many missing values to perform a reliable analysis.
0%
50%
100%
150%
200%
250%
300%
350%
-
500
1,000
1,500
2,000
2,500
3,000
3,500
FR
DE
UK IT ES
SE
NL
BE
PL
AT
CZ
RO IE FI
DK
EL
PT
HU
HR
BG
SK SI
LU LT
LV
EE
CY
MT
% of GDPBn Eur
Total assets Non-financial assets as % of GDP
0
500
1,000
1,500
2,000
2,500
3,000
3,500
FR DEUK IT ES SE NL BE PL AT CZRO IE FI DK EL PT HUHRBGSK SI LU LT LV EE CY MT
Bn Eur
Financial assets Non-financial assets
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3. OVERVIEW BY CLUSTER OF NON-FINANCIAL ASSETS
3.1. The estimated value of Non-financial assets by cluster
Economic valuation of the assets in a comparative perspective are carried out using specific benchmarking methods. To do so, and to provide the policy maker with an
overall consistent assessment across the EU28 countries, Non-financial assets are compared considering both the absolute estimated value of clusters by Member State,
as well as the normalised values, adjusted by the country’s gross domestic product (GDP), (again, for a suitable benchmark at the European scale).
Figure 6 graphically shows the aggregate estimated value of the stock of non-financial assets by country, while breaking it down by their “components” (i.e. the clusters of
Non-financial assets). It illustrates how Buildings other than dwellings, Roads and
Other natural resources are the most valued assets in this Study.
Figure 6 Key “Components” of Reported Non-financial Assets by EU28 country, 2015
Source: KPMG elaborations.
As shown in Figure 6 above, the dimension of a country’s economy matters; countries such as Germany, France, the United Kingdom, Italy and Spain occupy preeminent
positions when considering the absolute estimated values; however, this is not the case if looking at countries’ GDP. Indeed, some relatively smaller countries (such as
the Baltic, Southeastern States, and Croatia) shows higher normalised estimated
values.
In this paragraph, as mentioned above, we compare Non-financial assets as described
throughout the different Country fiches in this Pillar, considering both the absolute estimated value of clusters by Member State, as well as the normalised values, using
GDP as adjustment factor.
Figure 7 below reports both the estimated absolute value and the normalised
estimated value of Dwellings for each EU28 country. A key insight can be seen by examining the map; those countries showing a high estimated absolute value for
Dwellings do not keep the same position after the estimated value is adjusted by GDP.
Rather, some relatively smaller countries (such as the Baltic states) show a higher normalised estimated value.
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
FR DE UK IT ES SE PL CZ AT RO NL DK EL BE FI IE PT HU BG HR SK LT LV SI EE LU CY MT
Eur Bn
Other natural resources Mineral and Energy reserves Railways
Roads Airports Ports
Buildings other than dwellings Dwellings
0%
50%
100%
150%
200%
250%
300%
350%
% of GDP
Non-financial assets as % of GDP
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Figure 7 Comparison of the estimated value of Dwellings across EU28 Member States,
absolute values and normalised values, 2015
Source: KPMG elaborations
(1) Estimated values for Dwellings have been adjusted by the country’s GDP. (2) Data coverage on Dwellings is not complete because data transmissions to Eurostat is subject to specific
derogations (for more details please refer to Table 11 in the Annex).
Figure 8 below reports both the estimated absolute value and the normalised
estimated value of Buildings other than dwellings for each EU28 country. As for Dwellings, those countries that present a high estimated absolute value for Dwellings
do not keep the same position after the estimated value has been normalised for the
GDP. Rather, some of the smaller countries (such as the Baltic States) show a higher normalised estimated value.
Figure 8 Comparison of the estimated value of Buildings other than dwellings across EU28 Member States, absolute values and normalised values, 2015
Source: KPMG elaborations
(1) Estimated values for Buildings other than dwellings have been adjusted by the country’s GDP. (2) Data coverage on Buildings other than dwellings is not complete because data transmissions to Eurostat
is subject to specific derogations (for more details please refer to Table 11 in the Annex).
Figure 9 below provides a comparison of the estimated value of airports across EU28 Member States. A key insight can be seen by examining the map; those countries
114 Eur Mn – 1,791 Eur Mn
1,791 Eur Mn – 3,212 Eur Mn
3,212 Eur Mn 16,193 Eur Mn
16,193 Eur Mn – 66,063 Eur Mn
Absolute value
Legend
Value as a % of GDP
0.2 – 1.2%
1.2% – 3.7%
3.7% - 6.3%
6.3% - 20.3%
Legend
Absolute value
3,005 Eur Mn – 14,442 Eur Mn
14,442 Eur Mn – 36,700 Eur Mn
36,700 Eur Mn – 94,313 Eur Mn94,313 Eur Mn – 624,018 Eur Mn
Legend10.3% – 13.3%
13.3% – 18.8%
18.8% - 29.3%
29.3% - 72.7%
Value as a % of GDP
Legend
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showing a high estimated absolute value for airports do not keep the same position
after the estimated value is adjusted by GDP. Rather, some relatively smaller countries (such as Luxembourg, Malta and Cyprus) show a higher normalised
estimated value.
Figure 9 Comparison of the estimated value of airports across EU28 Member States,
absolute values and normalised values, 2015
Source: KPMG elaborations.
(1) Estimated values for Airports have been adjusted by the country’s GDP.
(2) Airports in United Kingdom are not in the scope of Pillar 2 since they are fully private.
(3) Airports in Spain, Germany and Finland are considered out of the scope since they have been already
mapped in Pillar 1
(4) Airports in France, Denmark and Sweden are valuated both in Pillar 1 and 2 as some of them are owned
by PSHs.
The scenario became even clearer for Maritime ports. In this case, as Figure 10 shows, top ranked countries in terms of (absolute) estimated values for ports are among the
least valuable if the estimated value of the infrastructure is adjusted by GDP.
Figure 10 Comparison of the estimated value of maritime ports across EU28 Member States, absolute values and normalised values, 2015
Absolute value
129 Eur Mn – 497 Eur Mn
497 Eur Mn – 1,024 Eur Mn1,024 Eur Mn – 3,200 Eur Mn
3,200 Eur Mn – 14,044 Eur Mn
Not in the scope of Pillar 2 since airports are private
Airports have been already evaluated in Pillar 1 since they are owned by a PSH
Legend Legend0.1% – 0.6%
0.6% – 0.9%
0.9% - 1.5%
1.5% - 4.3%
Not in the scope of Pillar 2 since airports are private
Airports have been already evaluated in Pillar 1 since they are owned by a PSH
Value as a % of GDP
Absolute value
216 Eur Mn – 1,251 Eur Mn
1,251 Eur Mn – 3,212 Eur Mn3,212 Eur Mn – 7,993 Eur Mn
7,993 Eur Mn – 21,411 Eur Mn
Not in the scope of Pillar 2 since Maritime ports are private
Legend
There are no Maritime ports in the country
Maritime ports have been already evaluated in Pillar 1 since theyare owned by a PSH
Legend0.5% – 1.3%
1.3% – 2.2%
2.2% - 2.7%
2.7% - 12.8%Not in the scope of Pillar 2 since Maritime ports are private
There are no Maritime ports in the country
Maritime ports have been already evaluated in Pillar 1 since theyare owned by a PSH
Value as a % of GDP
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Source: KPMG elaborations.
(1) Estimated values for Ports have been adjusted by the country’s GDP.
(2) Ports in United Kingdom are not in the scope of Pillar 2 since they are fully private.
(3) Ports in Finland, Ireland and in the Netherlands are considered out of the scope since they have been
already mapped in Pillar 1.
(4) Austria, Czech Republic, Hungary, Luxembourg and Slovakia do not have Maritime ports.
The following two figures show the comparison between the estimated values of roads
and the estimated values of railways. For both assets, those countries that present a high estimated absolute value do not keep the same position after the estimated value
has been normalised for the GDP. Rather, some of the smaller countries (such as the Baltic States) show a higher normalised estimated value.
It is worth highlighting that, in line with the valuation approach implemented, the results in the normalised graphs for road/rail are not driven by country size but by a
combination of (i) population density (less densely-populated country tend to have more kilometers of road/rail length per capita); (ii) GDP per capita (the lower it is, the
higher the estimated value of road/rail as a percentage of GDP, for a given road/rail
length per capita); (iii) the legacy of a large rail network in the new Member States. Note, however, that the correction factor slightly mitigates this effect.
Figure 11 Comparison of the estimated value of railways across EU28 Member States, absolute values and normalised values, 2015
Source: KPMG elaborations.
(1) Estimated values for Railways have been adjusted by the country’s GDP.
(2) Railways are out of the scope of Pillar 2 because, given their ownership model, they have already been
mapped in Pillar 1.
(3) Cyprus and Malta do not have railways in their countries.
Absolute Value
3,646 Eur Mn – 13,188 Eur Mn
13,188 Eur Mn – 25,802 Eur Mn25,802 Eur Mn – 46,043 Eur Mn
46,043 Eur Mn – 89,008 Eur Mn
There are no Railways in the country
Railways have been already evaluated in Pillar 1 since they are owned by a PSH
Legend
Value as a % of GDP
7.1% – 19.4%
19.4% – 34.3%
34.3% - 44.0%
44.0% - 60.3%
There are no Railways in the country
Railways have been already evaluated in Pillar 1 since they are owned by a PSH
Legend
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Figure 12 Comparison of the estimated value of roads across EU28 Member States,
absolute values and normalised values, 2015
Source: KPMG elaborations
(1) Estimated values for roads have been adjusted by the country’s GDP.
Figures 13 and 14 show the comparison between the estimated values of Mineral and Energy reserves in the scope of the study and the estimated values of Other natural
resources. Both assets show the same trends whn normalised for GDP. In fact, the great disparity among the size of Mineral and Energy reserves and Land, respectively,
among countries translates in a great heterogeneity in the economic values of proven
reserves even when they are normalised for GDP. In fact, countries with the highest estimated values in absolute terms are approximately still the most valued in relative
terms.
Figure 13 Comparison of the estimated value of Mineral and Energy reserves across
EU28 Member States, absolute values and normalised values, 2015
Source: KPMG calculations on Orbis (BvD) database.
(1) Estimated values for Mineral and Energy reserves have been weighted by the country’s GDP.
(2) Belgium, Estonia, Finland, Latvia, Luxembourg, Malta, Portugal, Slovenia and Sweden have no Mineral
and Energy reserves in the scope of the study.
1,074 Eur Mn – 28,437 Eur Mn
28,437 Eur Mn – 48,253 eur Mn
48,253 Eur Mn – 128,213 Eur Mn128,213 Eur Mn – 724,434 Eur Mn
Absolute Value
Legend7.8% – 19.0%
19.0% – 35.4%
35.4.7% - 50.8%
50.8% - 128.3%
Value as a % of GDP
Legend
Absolute value
564 Eur Mn – 1,384 Eur Mn
1,384 Eur Mn – 5,452 Eur Mn5,452 Eur Mn – 24,361 Eur Mn
24,361 Eur Mn – 152,002 Eur Mn
Legend
There are no Mineral and Energy reserve in the country
Legend
Value as a % of GDP
0.2% – 0.7%
0.7% – 1.9%
1.9% - 8.8%
8.8% - 65.1%There are no Mineral and Energy reserve in the country
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Figure 14 Comparison of the estimated value of Other natural resources across EU28
Member States, absolute estimated values and normalised estimated values, 2015
Source: KPMG calculations on Orbis (BvD) database.
(1) Estimated values for Other natural resources have been weighted by the country’s GDP.
(2) In order to ensure comparability across EU28 Countries, only the estimated value of lands have been
considered as a proxy of Other natural resources.
3.2. Competitive features for the economic sectors related to Non-financial
assets
The economic sectors related to Non-financial assets are often characterized by a non-
competitive structure with a strong public sector presence – this is typically the case
of infrastructure networks. For this reason, the EU Commission has designed specific “packages” to promote competition in these sectors with the aim of stimulating
economic performance across all sectors of the economy and offering a broader choice of better-quality products and services and at more competitive prices.The competitive
features of these economic sectors have been analysed at EU28 level mainly across the following relevant dimensions:
concentration of the market;
sector profitability and relevance of the public sector presence.
Competitive features are analysed for those sectors mainly linked to the management
of the infrastructure networks.
However, the EU Commission “packages” are mainly directed to the users of
infrastructures (e.g. companies operating rail transport services) rather than to managers of infrastructures.
3.2.1. Market concentration
The concentration of the market related to Non-financial assets, as shown in Figure
15, has been analysed based on the cumulative market share in terms of Operating revenues of:
the top 1 company of the sector;
the top 5 companies of the sector;
the top 20 companies of the sector.
572 Eur Mn – 4,976 Eur Mn
4,976 Eur Mn – 30,722 Eur Mn
30,722 Eur Mn – 100,090 Eur Mn
100,090 Eur Mn – 726,103 Eur Mn
Absolute Value
Legend3.1% – 10.8%
10.8% – 17.5%
17.5% - 26.5%
26.5% - 55.3%
Value as a % of GDP
Legend
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The following paragraphs will provide a brief description of “packages” adopted by the
EU Commission, checking the actual market concentration of the sectors at EU28 level4.
Railways and roads
EU legislative intervention
Regarding railways, four legislative packages were adopted between 2001 and 2016 with the main aim to gradually open up rail transport service markets for competition.
With regard to the railway infrastructures, the entities in charge of the management of
the rail infrastructure (i.e. infrastructure managers) are now separate, at least in accounting terms, from the companies operating rail transport services; this is one of
the imperative applications of Dir 91/440, relating to the development of the Community’s railways, adopted on 29.07.91.
The legislation regulating the competition within the road transportation sector roughly
corresponds to the laws which apply to the railway network.
Market concentration
As shown by Figure 15, the sector “services activities incidental to land transportation”, which includes rail and road “infrastructure managers”, is still
characterised by an high cumulated market share of the top 20 companies across Europe (i.e. around 56%).
Market concentration is particularly high when railways only are considered, since in
almost all EU28 countries there is only one infrastructure manager for railways.
Airports
EU legislative intervention
Also in the case of airports the legislation has been mainly directed to the users of
infrastructures (e.g. companies operating in transportation services) rather than to managers of infrastructures.
In the 1990s, a single market for aviation was created.
The Regulation 1008/2008 November 1st 2008 set the common rules for the economic operation of air services in the European Community (i.e. the “Air Service
Regulation”). The Commission also drafted the Aviation package for improving the competitiveness of the EU Aviation Sector5. Market concentration
The sector “service activities incidental to air transportation” is still characterised by a
high market share of the top 20 companies (i.e. around 65%).
Ports
EU legislative intervention
4 For more information about the sector analysed please see Table C in Appendix EU28. Due to the
hetherogeneity of other sectors related to Non-financial assets, it is not possible to estimate the specific
competitive features for the other assets mapped in Pillar 2 (Dwellings, Buildings other than Dwellings,
Mineral and Energy reserves and Other natural resources).
Please note that to carry out a reliable analysis, NACE sectors (Rev.2) are taken into account, since they
represent the best proxies of markets we are concerned with. However, these NACE secors do not refer only
to our specific markets and therefore could include a wider selection of operators. 5 For more information about the Aviation package for improving the competitiveness of the EU Aviation
Sector please see: https://ec.europa.eu/transport/modes/air/consultations/2015-aviation-package_en
[Accessed 21st July 2017].
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In 1986, the European Commission adopted the first piece of legislation which
regulated the competition for international maritime ports and insured that competition was not distorted by abusive agreements: Regulation (EEC) No 4056/86.
Then in 2003 the Commission adopted a new policy package in order to liberalize port services.
Market concentration
Among the markets analysed, the port sector seems to be characterised by a
relatively lower market concentration. In particular, “service activities incidental to
water transportation” is denoted by a relatively lower market share of the top 20 companies (i.e. around 52%).
Figure 15 Cumulative market share in terms of Operating revenues of top companies in economic sectors related to Non-financial assets, 2015
Source: KPMG elaboration on Orbis (BvD) database, 2015 [downloaded in September 2017].
3.2.2. Market profitability and relevance of the public sector presence
Sector profitability and relevance of the public sector presence in markets related to Non-financial assets, as shown in Figure 16, has been analysed based on the following
three KPIs:
the average EBITDA margin of the industry, used to explore the average
profitability of the firms within the sector;
the share of PSHs’ operating revenues, used to investigate the relevance of
public sector in the market;
the relevance of the sector within total economy by measuring its value added.
The following paragraphs will provide a brief analysis of the sectors at EU28 level6.
6 For more information about the sector analysed please see Table C in Appendix EU28. Due to the
hetherogeneity of other sectors related to Non-financial assets, it is not possible to estimate the specific
competitive features for other assets mapped in Pillar 2 (Dwellings, Buildings other than Dwellings, Mineral
and Energy reserves and Other natural resources).
Please note that to carry out a reliable analysis, NACE sectors (Rev.2) are taken into account, since they
represent the best proxies of markets we are concerned with. However, these NACE secors do not refer only
to our specific markets and therefore could include a wider selection of operators.
12
8
12
29
31
38
52
56
65
0 10 20 30 40 50 60 70 80 90 100
Market share in terms of operating revenues (%)
Top 1 Top 5 Top 20
5223Service activities incidental to air transportation
5221Service activities incidental to land
transportation
5222 Service activities
incidental to water transportation
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Railways and roads
As shown in Figure 16, the sector “services activities incidental to land transportation” is characterised by a high profitability and by a significant public sector presence (i.e.
around 30% of the market share).
It is also worth highlighting that all railways infrastructure managers across the EU28
countries are public sector entities.
Airports
The sector “services activities incidental to air transportation” is characterised by a
high profitability and by a strong public sector presence (i.e. around 45% of the market share).
Ports
The sector “services activities incidental to water transportation” seems to be the least
profitable sector among the sectors analysed. However, it is characterised by a relatively lower public sector presence (i.e. around 20% of the market share).
Figure 16 European market attractiveness of Non-financial assets, 2015
Source: KPMG elaboration on Orbis (BvD) database, 2015 [downloaded in July 2017].
4. DATA COMPARABILITY AND DATA COVERAGE: LIMITATIONS OF NON-FINANCIAL ASSETS
In this section, we discuss the two main issues affecting comparison of Non-financial
assets among countries.
It is not always possible to reliably compare some clusters of assets among some
countries. This is particularly true, as was previously mentioned, for assets like Dwellings, Buildings other than dwellings and Other natural resources. This is mainly
due to the fact that, although EU Member States have a obligation to provide data on
the value of assets according to ESA2010 standards, some items are voluntary and some derogations are granted to EU28 countries regarding compulsory items. This, of
course, generates many data gaps. These gaps have been filled first by looking other sources, then if other sources were not available we estimated the missing values
-10
-5
0
5
10
15
20
25
30
35
40
70.065.060.055.050.045.040.035.030.025.020.015.010.05.00.0
EBITDA margin Industry (%)
Share of PSH total revenues (%)
Service activities incidental to air transportation
Service activities incidental to water transportation
Service activities incidental to land transportation
High profitabilityLow public sector market share
The size of the bubbles shows value added of the total industry scaled by GDP High profitabilityHigh public sector market share
Low profitabilityHigh public sector market share
Low profitabilityLow public sector market share
Study on State asset management in the EU – Pillar 2 EU28 Summary Report
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using a market approach, as shown in Table 1 above. More details on this issue are
provided in the Methodological Notes of Pillar 2 and at the Annex.
Table 1 Data coverage for Dwellings, Buildings other than dwellings and Other natural
resources
Source: KPMG elaborations
(1) Since the value for Buildings other than dwellings for Italy was not available from Eurostat, then it has
been retrieved from ISTAT.
(2) Only France and Czech Republic report both Land and Non cultivated biological resources.
Therefore, data comparability across countries for some clusters of assets is not
always ensured, mainly due either to lack of data, and the fact that our estimates are
not fully comparable with Eurostat data.
5. SUMMARY
This “consolidated” EU28 Fiche provides a cross-country comparison of the Non-financial assets owned by the Public Sector across the EU28 Countries, taking into
account the different ownership models.
Countries with the highest estimated value of total assets in absolute terms (Financial and Non-financial) tend to be the biggest European Countries, both for population and
GDP. However, when adjusting the estimated value for GDP we are presented with a different picture.
Country DwellingsBuildings other
than dwellings
Other natural
resources
Austria
Belgium
Bulgaria
Croatia
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia
Lithuania
Luxembourg
Malta
Netherlands
Poland
Portugal
Romania
Slovakia
Slovenia
Spain
Sweden
United Kingdom
The value of the asset is directlyavailable from public sources
Legend
The value of the asset has beenestimated
+
+
Study on State asset management in the EU – Pillar 2 EU28 Summary Report
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Furthermore, when looking at the estimated value of Non-financial assets, the
Ownership models adopted by the Member States take on a key role. Those countries which report the highest GDP adjusted estimated value of Non-financial assets are, in
fact, those which adopt ownership models in which the asset is directly owned by the Government. As a matter of example, the Southeastern countries (such as Romania
and Bulgaria) show relatively higher normalised estimated value compared to other EU countries; this is mainly related to the fact that the Non-financial assets analysed in
this report are directly owned by the Government, and fall within the scope of Pillar 2.
The same happens for some Baltic States (such as Lithuania) and for Croatia; in fact, they do report the highest normalised estimated values for Non-financial assets.
It is worth highlighting that in 14 countries, including the biggest European countries (such as Germany, France, Italy, United Kingdom and Spain), the property of railway
infrastructures has been transferred to one or more PSHs. Therefore, the railway networks for these countries fall within the scope of Pillar 1.
Therefore, we can conclude that ownership models play an important role in the value of Non-financial assets, as if their ownership is not transferred to a PSH (or any other
private entity), they will appear directly in the Government’s balance sheet as Non-
financial asset, and will therefore impact Pillar 2 results.
In general, the analysis shows that, at the European level, Non-financial assets
represent the majority of the General government’s total holdings (63.3% of total assets). This trend is also usually present when looking at the country specific
breakdown of the share of total assets.
To conclude, a disclaimer must be added with regard to the comparison of clusters of
Non-financial assets across countries. Indeed, a key challenge is related to data coverage, as transmission of data by Member States to Eurostat is still scattered, and
a comprehensive datasets across sectors and countries is still to be released. In fact,
general and country-specific exemptions regarding data transmission obligations are still applied (affecting, in particular, the following clusters: Dwellings, Buildings other
than dwellings, and Other natural resources).
Study on State asset management in the EU – Pillar 2 EU28 Summary Report
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Appendix I EU28
Table A Mapping Non-financial assets across Pillars, 2015
Source: KPMG elaboration
(a) This table includes only the assets whose value has not always been mapped in Pillar 2 of this Study.
(1) Airports are valuated both in Pillar 1 and 2 as some of them are owned by PSHs.
(2) This country does not have this particular type of asset covered by the study.
(3) In United Kingdom, since this asset has been privatised, then this asset is considered out of the scope of
this Study.
Country Maritime ports Roads Airports RailwaysMineral and
Energy reserves
Austria Not present(2) Pillar 2 Pillar 2 Pillar 1 Pillar 2
Belgium Pillar 1 Pillar 2 Pillar 2 Pillar 1 Not present(2)
Bulgaria Pillar 2 Pillar 2 Pillar 2 Pillar 2 Pillar 2
Croatia Pillar 2 Pillar 2 Pillar 2 Pillar 2 Pillar 2
Cyprus Pillar 2 Pillar 2 Pillar 2 Not present(2) Pillar 2
Czech Republic Not present(2) Pillar 2 Pillar 2 Pillar 2 Pillar 2
Denmark Pillar 2 Pillar 2- Pillar 1
- Pillar 2(1) Pillar 1 Pillar 2
Estonia Pillar 1 Pillar 2 Pillar 1 Pillar 1 Not present(2)
Finland Pillar 2 Pillar 2 Pillar 1 Pillar 2 Not present(2)
France Pillar 2 Pillar 2- Pillar 1
- Pillar 2(1) Pillar 1 Pillar 2
Germany Pillar 2 Pillar 2 Pillar 1 Pillar 1 Pillar 2
Greece Pillar 2 Pillar 2 Pillar 2 Pillar 1 Pillar 2
Hungary Not present(2) Pillar 2 Pillar 2 Pillar 1 Pillar 2
Ireland Pillar 1 Pillar 2 Pillar 2 Pillar 1 Pillar 2
Italy Pillar 2 Pillar 2 Pillar 2 Pillar 1 Pillar 2
Latvia Pillar 2 Pillar 2 Pillar 1 Pillar 2 Not present(2)
Lithuania Pillar 2 Pillar 2 Pillar 2 Pillar 2 Pillar 2
Luxembourg Not present(2) Pillar 2 Pillar 2 Pillar 2 Not present(2)
Malta Pillar 2 Pillar 2 Pillar 2 Not present(2) Not present(2)
Netherlands Pillar 1 Pillar 2 Pillar 2 Pillar 1 Pillar 2
Poland Pillar 2 Pillar 2 Pillar 2 Pillar 1 Pillar 2
Portugal Pillar 2 Pillar 2 Pillar 2 Pillar 2 Not present(2)
Romania Pillar 2 Pillar 2 Pillar 2 Pillar 2 Pillar 2
Slovakia Not present(2) Pillar 2 Pillar 2 Pillar 2 Pillar 2
Slovenia Pillar 2 Pillar 2 Pillar 2 Pillar 2 Not present(2)
Spain Pillar 2 Pillar 2 Pillar 1 Pillar 1 Pillar 2
Sweden Pillar 2 Pillar 2- Pillar 1
- Pillar 2(1) Pillar 2 Not present(2)
United KingdomOut of the
scope(3) Pillar 2Out of the
scope(3) Pillar 1 Pillar 2
20
Table B Estimated value of Non-financial assets by EU28 country, 2015
Source: KPMG elaboration
(a) The values written in italics were estimated through our own models as explained in the Methodological Notes.
(1) For some countries the value of Mineral and Energy reserves is zero because it reflects the estimated value of proven Oil and Natural gas reserves, as reported by the CIA's
World Factbook Database.
(2) The value of Other natural resources includes only the value of land. Please not that Czech Republic and France transmit also the value of other “components” included in this
clusters, namely Non cultivated biological resources and Water resources. For more detail, please see Czech Republic and France’s Country fiches.
(3) This country does not have this particular type of asset.
(4) In United Kingdom, since this asset has been privatised, then this asset is considered out of the scope of this Study.
(5) Since for this cluster of assets the ownership model is the Indirect Ownership & Indirect Management model, then this asset has been already valuated in Pillar 1 through the
equity method
Data in Eur Bn
Country Dwellings
Buildings other
than dwellings Maritime Ports Airports Roads Railways
Mineral and
energy reserves(1)
Other natural
resources(2)
Total Non-financial
assets
Austria 0.6 49.0 Not present(3) 2.5 90.5 Pillar 1(5) 2.9 159.3 304.9
Belgium 17.6 55.0 Pillar 1(5) 3.6 42.5 Pillar 1(5) <0.5Bn 53.7 172.3
Bulgaria 8.9 27.4 1.3 0.7 18.0 27.3 1.2 25.1 109.7
Croatia 3.1 13.8 1.0 0.6 47.4 18.8 5.5 17.7 107.9
Cyprus 1.2 3.0 <0.5Bn 0.7 10.5 Not present(3) 11.5 0.6 28.0
Czech Republic 9.9 118.6 Not present(3) 1.1 86.7 73.0 1.0 16.5 306.7
Denmark 14.2 55.7 4.6 <0.5Bn 29.3 Pillar 1(5) 32.0 69.5 205.7
Estonia <0.5Bn 5.3 Pillar 1(5) Pillar 1(5) 26.0 Pillar 1(5) <0.5Bn 5.2 36.9
Finland 1.5 43.9 Pillar 1(5) Pillar 1(5) 63.3 37.4 <0.5Bn 36.4 182.5
France 59.4 328.2 13.8 6.5 724.4 Pillar 1(5) 4.8 726.1 1,863.2
Germany 27.6 624.0 13.8 Pillar 1(5) 565.4 Pillar 1(5) 18.0 454.1 1,702.9
Greece 2.2 18.6 8.0 4.2 110.9 Pillar 1(5) 0.6 44.5 188.9
Hungary 3.1 42.3 Not present(3) 0.9 44.8 Pillar 1(5) 2.0 17.7 110.8
Ireland 12.0 31.1 Pillar 1(5) 2.6 49.1 Pillar 1(5) 0.8 74.2 169.8
Italy 54.4 254.7 21.4 14.0 350.9 Pillar 1(5) 30.7 324.0 1,050.1
Latvia 2.4 8.7 3.1 Pillar 1(5) 12.3 13.6 <0.5Bn 4.3 44.4
Lithuania 0.8 4.2 2.0 <0.5Bn 30.5 11.8 0.6 4.2 54.4
Luxembourg <0.5Bn 14.7 Not present(3) 0.8 7.7 3.6 <0.5Bn 3.2 30.2
Malta 1.9 6.7 <0.5Bn <0.5Bn 1.1 Not present(3) <0.5Bn 2.1 12.4
Netherlands 3.3 86.2 Pillar 1(5) 6.9 53.0 Pillar 1(5) 85.8 36.8 272.0
Poland 7.4 44.3 3.2 2.7 130.4 Pillar 1(5) 11.5 156.1 355.4
Portugal 16.9 18.8 4.0 3.4 46.7 24.3 <0.5Bn 5.5 119.6
Romania 16.1 25.4 2.1 1.1 127.5 72.0 37.6 19.5 301.2
Slovakia 3.2 16.4 Not present(3) <0.5Bn 38.7 29.0 1.6 4.0 93.0
Slovenia 2.1 10.2 0.9 <0.5Bn 18.5 10.7 <0.5Bn 1.3 43.7
Spain 66.1 150.0 20.7 Pillar 1(5) 404.0 Pillar 1(5) 7.5 336.0 984.2
Sweden 1.4 158.7 7.9 <0.5Bn 184.4 89.0 <0.5Bn 81.4 523.1
United Kingdom 16.6 337.0 Out of the scope(4) Out of the scope(4) 296.8 Pillar 1(5) 152.0 298.9 1,101.2
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Table C NACE sectors analysed for competitive features
Sector NACE code Definition
Service activities
incidental to air
transportation
52.23
This class includes:activities related to air
transport of passengers, animals or freight (operation of terminal facilities such as airway
terminals etc, airport and air-traffic-control
activities,ground service activities on airfields etc.); firefighting and fire-prevention services at
airports.
Service activities
incidental to land transportation
52.21
This class includes: activities related to land transport of passengers, animals or freight
(operation of terminal facilities such as railway stations, bus stations, stations for the handling of
goods,operation of railroad infrastructure, operation of roads, bridges, tunnels, car parks or
garages, bicycle parkings, winter storage of caravans); switching and shunting; towing and
road side assistance.
Service activities incidental to
water transportation
52.22
This class includes: activities related to water transport of passengers, animals or freight
(operation of terminal facilities such as harbours
and piers; operation of waterway locks etc.; navigation, pilotage and berthing activities;
lighterage, salvage activities; lighthouse activities).
Source: KPMG elaboration