Post on 14-May-2020
Written by KPMG and Bocconi University February 2018
Study on State asset management in the EU
Final study report for Pillar 3 – Belgium
Contract: ECFIN/187/2016/740792
2
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
3
Belgium
This country fiche presents a qualitative overview of the mix of governance models
and investment strategies implemented by the Belgian general government to manage
its assets portfolio.
1. MAPPING OF THE GOVERNANCE OF THE PORTFOLIO OF ASSETS
The Belgian general government includes the following public entities:
the federal state, the communities and the regions, all of three of which equal
from the legal viewpoint but have powers and responsibilities for different
fields.
the provinces, which are supervised by all the higher government authorities,
in the context of the federal, community or regional powers;
the communes, which are under the supervision of the higher authorities.
Depending on the powers exercised, they are supervised by the federal state,
the community or the region. In general, they are financed and audited by the
Regions.
Throughout this country fiche, we re-cluster these public bodies into two categories,
i.e. the “central government”, which include the federal government, and the “local
governments”, which include both the communities, the regions, the provinces, the
communes.
The central government shares the responsibility for the strategic and operational
decisions with the local governments. However, depending on the asset, the central
government might have a full or partial ownership and decision power. The decision
process depends on the asset. For the assets managed by the central government
(e.g. railways and central government-owned Public Sector Holdings (PSHs)), a
compulsory and formal co-decision process is not in place. On the other hand, there
are also assets where the central government has no formal decision power (e.g.
roads and energy distribution).
Currently, there is not a consolidated National public data source of general
government–owned assets. Since 2003, the Belgian central government is
implementing a reform of public accounting, in order to move towards an accrual
accounting system. The reform is expected to be finalised by January 2020. Then, the
year-end financial statement of the central government1 will include publiv assets and
liabilities, according to IPSAS’ principles2.
1.1. Financial assets
The PSHs owned by the Belgian general government operate in a broad spectrum of
the domestic economy. This variety is reflected in the patterns of ownership and
governance. For example, some financial assets are owned by the central
government; others by the local governments.
1 Compte général de l’État. 2 Organisation for Economic Co-operation and Development (OECD) (2017). Accrual Practices and Reform Experiences in OECD Countries. Available at: http://www.oecd-ilibrary.org/governance/accrual-practices-and-reform-experiences-in-oecd-countries_9789264270572-en [Accessed 10th November 2017]
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The Federal Holding and Investment Company (SFPI-FPIM) is the main body
responsible for the strategic and operational decisions related to the management of
Belgian central government PSHs. The competent sector ministers share part of the
responsibilities for the strategic and investment decisions with this company.
SFPI-FPIM is a holding company, fully owned by the central government. The core
business of the SFPI-FPIM (on one hand as an investment company and on the other
hand as a holding company) is as follows:
investing in companies with an attractive social value in one of the priority
sectors (i.e. aeronautical industry and airports, real estate, networks,
international investments, and innovations), which the SFPI-FPIM has set itself
as an objective;
acquiring equity in companies that are of strategic importance as far as central
government policy is concerned, either making use of their own funds or by
using funds that the state provides per project in which case the SFPI-FPIM
acts on a delegated assignment.
For the 2016 business year, the breakdown of SFPI-FPIM’s financial assets portfolio is
equivalent to 317 Mn Eur as investment companies; 1,090 Mn Eur as holding
company; 15.8 Mn Eur as delegated assignments3.
In terms of number of companies, SFPI-FPIM’s portfolio consists of:
76 companies on its own behalf (in 9 companies SFPI-FPIM retains a majority
stake);
9 companies on behalf of the central government.
Its portfolio, including companies owned on behalf of the central government,
accounts for more than 72% of the total assets owned by the PSHs within the Belgian
government’s portfolio4.
The SFPI-FPIM has the form of a public limited company to which corporate law is
applicable. The central government, as the only shareholder, has control over SFPI-
FPIM. It can influence the orientation of the company policy through its voting right in
the general meeting.
SFPI-FPIM is organized as a public entity by its own organic law (the SFPI-FPIM law).
On its grounds the directors, chairman, vice-chairman of the board of directors, and
the managing director are appointed by Royal decree. Two Ministers have the
responsibility to monitor SFPI-FPIM activities, the Minister of Finance and the Minister
of Economy.
With respect to financial assets in the government’s equity portfolio, the five most
important sectors in terms of Value Added (VA) generated by PSHs5 are:
1. J - Information and communication;
3 For more details, please see SFPI-FPIM. Available at: http://www.sfpi-fpim.be/en/profile [Accessed 10th December 2017]. 4 This share has been calculated taking into consideration the total weighted assets of shareholdings of SFPI-FPIM, and using data collected and elaborated in Pillar 1. 5 The five most important sectors in terms of VA generated by PSHs have been mapped in Pillar 1. For industry classification we rely on data provided by Bureau van Dijk (BvD) Orbis, which in turns gets its data from other service providers and bases industry classification on the NACE codes provided.
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Belgium
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2. N - Administrative and support service activities;
3. H - Transportation and storage;
4. D - Electricity, gas, steam and air conditioning supply;
5. L - Real estate activities.
Table 1 Governance regimes: Financial assets, Belgium
Owners of the
asset
Both the central and the local governments participate
in the companies’ capital. However, many of the shares
are owned by the SFPI-FPIM.
C3
D1
Most important sectors in terms of VA:
1. Sector J – Information: the majority of the PSHs
are partially owned by local governments.
However, some PSHs (e.g. Belgian Mobile Wallet)
are directly owned by the central government
through SFPI-FPIM
2. Sector N – Administrative activities: the
majority of PSHs are owned by the local
governments
3. Sector H – Transportation: the majority of the
PSHs are owned by local governments. However,
some PSHs (e.g. Bpost, Infrabel, and SNCB) are
directly owned by the central government
4. Sector D – Electricity and gas: the majority of
the PSHs are owned by the relevant local
governments
5. Sector L – Real estate: the majority of the PSHs
are owned by the local governments, since the
central government’s buildings are managed by
the Belgian Buildings Agency6, which is a semi-
independent governmental organization
Bodies
responsible for
the strategic
and investment
decisions
The central government, through the SFPI-FPIM, is the
main body responsible for the strategic decisions
related to the management of the Belgian central
government’s PSHs. The ministers for the competent
sector share part of the responsibilities for the strategic
and investment decisions with the SFPI-FPIM.
C3
Most important sectors in terms of VA: the relevant
local governments and each relevant ministry are
responsible for the strategic decisions on PSHs
operating within their jurisdiction in compliance with
the strategic framework outlined by the central
government.
6 Regie der Gebouwen or Régie des Bâtiments
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Bodies
responsible for
the operational
decisions
Since operational decisions are taken by the owners of
the majority of stakes in the PSHs, the SFPI-FPIM is
mainly in charge of managing the majority of the
central government-owned financial assets.
In addition, local governments are responsible for the
decisions regarding the management of their own
financial assets.
C3
D1
Most important sectors in terms of VA: since the
majority of the PSHs operating in these sectors are
owned by local governments, the local governments
are responsible for operational decisions.
National public
data sources
The National Bank of Belgium and the SFPI-FPIM
publish information about the general government’s
financial assets.
C2
C3
Source: KPMG elaborations.
The network graphs in the table above highlight the main bodies involved for each role of the (a)responsibility chain (e.g. the bodies owning the assets, the bodies responsible for operational decisions), for each asset cluster in the government’s asset portfolio. These models may not apply to all the individual assets within the cluster.
For some clusters of assets the responsibility for some aspects of the governance regime is spread (b)between more bodies at different levels of centralisation. Therefore, we represent these cases using two
“network graphs” representing these bodies.
Legend
C3C1 C2= Central government
= Central public body
= Central company-typestructure
D1 = Local governments
D2 = Local public body
D3 = Local company-typestructure
= Private bodyPM
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1.2. Non-financial assets
Airports
Table 2 Governance regimes: Airports, Belgium
Owners of the
asset
The property of airport infrastructures belongs to the
local governments, except for Brussels National Airport,
which is owned by the central government.
D1
Bodies
responsible for
the strategic
and investment
decisions
The relevant local governments are responsible for the
strategic and investment decisions on airports and
aerodromes located on their territory7. The central
government kept the responsibility for Brussels
National Airport. In detail, the Federal Public Service
Mobility and Transport8,9 is responsible for preparing,
implementing and supporting the airport policy for
Brussel airport.
C1
D1
Bodies
responsible for
the operational
decisions
The owners of the airports grant their management in
concession to private companies or PSHs, which in turn
are responsible for operational decisions. Currently,
40% of the airport operators in Belgium are privately
owned, while the remaining 60% are owned jointly by
the public sector and private investors10 (e.g. Brussels
Airport Company11: 25% owned by the State and 75%
owned by private-investors Ontario Teachers' Pension
Plan and the Australian Macquarie group).
D3
National public
data sources
The Federal Public Service Mobility and Transport12
collects and reports for each airport the key
information about the traffic (e.g. the air passenger
transport by main airports). With regard to the airport
infrastructures, there is currently no single, definitive,
public source of information.
C1
Source: KPMG elaborations.
The network graphs in the table above highlight the main bodies involved for each role of the (a)responsibility chain (e.g. the bodies owning the assets, the bodies responsible for operational decisions), for each asset cluster in the government’s asset portfolio. These models may not apply to all the individual assets within the cluster.
7 Special Law on Institutional Reforms of 8 August 1980, and its subsequent modifications. 8 SPF Mobilité et Transports. 9 It is worth highlighting that as part of the most recent major reforms to Belgium’s federal administrative structure, called the “Copernic” reforms, which took place in 2000, what were formerly known as “ministries” were renamed “Federal Public Services”. 10 Airport Council International – ACI Europe (2016). The ownership of Europe’s Airports. Available at: http://newairportinsider.com/wp-
content/uploads/2016/04/ACIEUROPEReportTheOwnershipofEuropesAirports2016.pdf [Accessed 10th December 2017]. 11 For more details, please see Brussels airport. Available at: https://www.brusselsairport.be/en/corporate/our-company/ba [Accessed 10th December 2017]. 12 For more detail about the information reported by the SPF Mobilité et Transports, please see https://mobilit.belgium.be/fr/transport_aerien/aeroports_et_aerodromes/statistiques [Accessed 10th December 2017].
Legend
C3C1 C2= Central government
= Central public body
= Central company-typestructure
D1 = Local governments
D2 = Local public body
D3 = Local company-typestructure
= Private bodyPM
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For some clusters of assets the responsibility for some aspects of the governance regime is spread (b)between more bodies at different levels of centralisation. Therefore, we represent these cases using two “network graphs” representing these bodies.
Ports
Table 3 Governance regimes: Ports, Belgium
Owners of the
asset
The prevalent ownership/management model is the so-
called landlord model. Specifically, the port authority
owns and manages the sites in the port areas, and
makes them available to port companies for their
activities on the basis of concession agreements. In
Belgium, the Port Authorities are organised as
decentralised company-type structures (i.e. local
government-owned PSHs)13.
D3
Bodies
responsible for
the strategic
and investment
decisions
The Federal Public Service Mobility and Transport (SFP)
is responsible for preparing, implementing and
supporting the port policy in consultation with its
partners at local, central and international levels. C1
D1
Bodies
responsible for
the operational
decisions
As managers of the infrastructure, different Port
Authorities are responsible for operational decisions
regarding seaport infrastructures in Belgium.
D3
National public
data sources
Consolidated information about maritime port
infrastructure and traffic in Belgium is made publicly
available by River Information Services (RIS).
C2
Source: KPMG elaborations. (a) The network graphs in the table above highlight the main bodies involved for each role of the
responsibility chain (e.g. the bodies owning the assets, the bodies responsible for operational decisions), for each asset mcluster in the government’s asset portfolio. These models may not apply to all the individual assets within the cluster.
For some clusters of assets the responsibility for some aspects of the governance regime is spread (c)between more bodies at different levels of centralisation. Therefore, we represent these cases using two “network graphs” representing these bodies.
13 The legal framework concerning seaports is covered by the law of 2nd March 1999 and its subsequent modifications.
Legend
C3C1 C2= Central government
= Central public body
= Central company-typestructure
D1 = Local governments
D2 = Local public body
D3 = Local company-typestructure
= Private bodyPM
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Roads
Table 4 Governance regimes: Roads, Belgium
Owners of the
asset
The Belgian road network is owned and managed by
the different local governments.
D1
Bodies
responsible for
the strategic
and investment
decisions
Each local government is responsible for the strategic
and investment decisions regarding the road network
under its jurisdiction.
D1
Bodies
responsible for
the operational
decisions
The relevant local public bodies are responsible for
operational decisions regarding the roads network
under their juridisction (e.g. the department Agency of
Roads and Traffic (AWV – Agentschap voor wegen en
verkeer) is responsible for the management and
maintenance of the roads in Flanders, Sofico is
responsible for the management and the maintenance
of the roads in Wallonia).
D2
National public
data sources
There is currently no single, definitive, centralised
public source of information about the Belgian road
infrastructures. Statistics Belgium14 (i.e. the Belgian
statistical office) collects and reports key information
about the road traffic in Belgium
C2
Source: KPMG elaborations.
The network graphs in the table above highlight the main bodies involved for each role of the (a)responsibility chain (e.g. the bodies owning the assets, the bodies responsible for operational decisions), for each asset cluster in the government’s asset portfolio. These models may not apply to all the individual assets within the cluster.
For some clusters of assets the responsibility for some aspects of the governance regime is spread (b)between more bodies at different levels of centralisation. Therefore, we represent these cases using two “network graphs” representing these bodies.
14 For more details, please see: https://www.statistik.at/web_de/statistiken/energie_umwelt_innovation_mobilitaet/verkehr/index.html [Accessed: 14th December 2017]
Legend
C3C1 C2= Central government
= Central public body
= Central company-typestructure
D1 = Local governments
D2 = Local public body
D3 = Local company-typestructure
= Private bodyPM
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Railways
Table 5 Governance regimes: Railways, Belgium
Owners of the
asset
Railways infrastructures are owned by Infrabel15.
Infrabel is a PSH that owns, develops, maintains and
exploits the Belgian railway infrastructure.
C3
Bodies
responsible for
the strategic
and investment
decisions
The Federal Public Service Mobility and Transport is
responsible for preparing, implementing and supporting
the railway policy in consultation with its partners at
regional, central and international levels. C1
Bodies
responsible for
the operational
decisions
Infrabel acts as infrastructure manager; it is therefore
responsible for operational decisions related to the
Belgian railway network.
C3
National public
data sources
Infrabel annually publishes the “Network Statement”16,
which outlines the characteristics of the infrastructure
and contains information on the conditions of access to
it. Moreover, since Infrabel is a listed joint-stock
company, it therefore compiles its annual report based
on the IFRS. It follows that its balance sheet maps the
value of its railways in compliance with the accounting
principle of IFRS 12 (“Property, plants and
equipment”).
C3
Source: KPMG elaborations.
The network graphs in the table above highlight the main bodies involved for each role of the (a)responsibility chain (e.g. the bodies owning the assets, the bodies responsible for operational decisions), for each asset cluster in the government’s asset portfolio. These models may not apply to all the individual assets within the cluster.
For some clusters of assets the responsibility for some aspects of the governance regime is spread (b)between more bodies at different levels of centralisation. Therefore, we represent these cases using two “network graphs” representing these bodies.
15 In compliance with Arrêté Royal du 28 septembre 2008 publié le 02 octobre 2008 Art. 115 (Royal Decree of 28 September 2008 published on 02 October 2008 Art. 1). 16 For more detail about the information reported by the Network Statement, please see https://www.infrabel.be/en/professionals/rail-operators/network-statement [Accessed 9th November 2017].
Legend
C3C1 C2= Central government
= Central public body
= Central company-typestructure
D1 = Local governments
D2 = Local public body
D3 = Local company-typestructure
= Private bodyPM
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Mineral and Energy reserves
Table 6 Governance regimes: Mineral and Energy reserves, Belgium
Owners of the
asset
The property of Mineral and Energy reserves in Belgium
belongs to the central government.
C1
Bodies
responsible for
the strategic
and investment
decisions
The authority of the mining policy and management
has been transferred to the local government (i.e. the
regions)17.
D1
Bodies
responsible for
the operational
decisions
Many companies are given the rights to exploit Belgian
mineral and energy resources in concession. Those
companies are responsible for the operational decisions
related to Mineral and Energy reserves.
C3
D3
National public
data sources
There is no information sources on Mineral and Energy
resources in the country
n.a.
Source: KPMG elaborations.
The network graphs in the table above highlight the main bodies involved for each role of the (a)responsibility chain (e.g. the bodies owning the assets, the bodies responsible for operational decisions), for each asset cluster in the government’s asset portfolio. These models may not apply to all the individual assets within the cluster.
For some clusters of assets the responsibility for some aspects of the governance regime is spread (b)between more bodies at different levels of centralisation. Therefore, we represent these cases using two “network graphs” representing these bodies.
17 Following the art. 6, §1, VI, 5° of the law of the reform of 1980.
Legend
C3C1 C2= Central government
= Central public body
= Central company-typestructure
D1 = Local governments
D2 = Local public body
D3 = Local company-typestructure
= Private bodyPM
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Other natural resources
Table 7 Governance regimes: Other natural resources, Belgium
Owners of the
asset
Other natural resources in Belgium are owned by both
the central government and the local governments.
C1
D1
Bodies
responsible for
the strategic
and investment
decisions
The central government and the relevant local
governments are responsible for the strategic and
investment decisions on Other natural resources. More
in detail, through the Directorate-General for the
Environment, the central government works on matters
within its sole jurisdiction or coordinates the
preparation and some aspects of implementing matters
under shared jurisdiction in collaboration with the local
governments.
C1
D1
Bodies
responsible for
the operational
decisions
Through the Directorate-General for the Environment,
the central government has the operational
responsabilities on matters within the central
government’s sole jurisdiction, while the local
governments and authorities have the responsibility for
other operational decisions.
C2
D2
National public
data sources
Statistics Belgium annually publishes some information
about Other Natural resources (e.g. the public
expenditure on environmental protection).
C2
Source: KPMG elaborations.
The network graphs in the table above highlight the main bodies involved for each role of the (a)responsibility chain (e.g. the bodies owning the assets, the bodies responsible for operational decisions), for each asset cluster in the government’s asset portfolio. These models may not apply to all the individual assets within the cluster.
For some clusters of assets the responsibility for some aspects of the governance regime is spread (b)between more bodies at different levels of centralisation. Therefore, we represent these cases using two “network graphs” representing these bodies.
Legend
C3C1 C2= Central government
= Central public body
= Central company-typestructure
D1 = Local governments
D2 = Local public body
D3 = Local company-typestructure
= Private bodyPM
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Dwellings, Buildings other than dwellings
Table 8 Governance regimes for Buildings cluster, Belgium
Owners of the
asset
Assets falling into this cluster can be owned either by
the central government or the local governments.
C1
D1
Bodies
responsible for
the strategic
and investment
decisions
The Belgian central government is the body responsible
for strategic and investment decisions regarding its
own real estate properties.
The local governments are responsible for the decisions
related to the management and disposal of real estate
properties within their jurisdiction.
C1
D1
Bodies
responsible for
the operational
decisions
The Belgian Buildings Agency is the real estate
manager of the central government’s assets. It is
responsible for purchasing the real estate of the public
authorities at their request; selling the real estate of
the public authorities at their request; managing the
central government real estate, either by renting it out
or by granting it as a concession or by selling it; and
selling the movable property out of service from the
government.
It is a semi-independent governmental organization,
and currently manages about 7.3 million m² in real
estate.
The local governments are responsible for the
operational decisions regarding the real estate
properties within their jurisdiction.
C2
D1
National public
data sources
The Statistics Belgium has to collect annually some
information about Dwellings and Buildings other than
dwellings18 (e.g. the building stock).
The Federal Public Service Finance is responsible for
updating the information about the location, boundaries
and extent of immovable property in the country.
C1
C2
Source: KPMG elaborations. The network graphs in the table above highlight the main bodies involved for each role of the (a)responsibility chain (e.g. the bodies owning the assets, the bodies responsible for operational decisions), for each asset cluster in the government’s asset portfolio. These models may not apply to all the individual assets within the cluster.
18 For more detail about the information on Buildings reported by the Statistics Belgium, please see http://statbel.fgov.be/en/statistics/figures/ [Accessed 13th September 2017].
Legend
C3C1 C2= Central government
= Central public body
= Central company-typestructure
D1 = Local governments
D2 = Local public body
D3 = Local company-typestructure
= Private bodyPM
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For some clusters of assets the responsibility for some aspects of the governance regime is spread (b)between more bodies at different levels of centralisation. Therefore, we represent these cases using two “network graphs” representing these bodies.
Figure 1 Asset-responsibility chain and ownership matrix for the cluster of assets in
government’s portfolio, Belgium
Source: KPMG elaborations. n.a. = not available Central gov. = Central government; Local gov. = Local government; Local PB = Local public body; Central & Local PB = Central & Local public bodies
For more detail about the clusters of governance regimes, please see Methodological Notes. (a) The network graphs in the table above highlight the main bodies involved for each role of the (b)responsibility chain (e.g. the bodies owning the assets, the bodies responsible for operational decisions), for each asset cluster in the government’s asset portfolio. These models may not apply to all the individual assets within the cluster.
For some clusters of assets the responsibility for some aspects of the governance regime is spread (c)between more bodies at different levels of centralisation. Therefore, we represent these cases using two “network graphs” representing these bodies.
In light of the analysis presented earlier and summarised in Figure 1, the Belgian
government has a “federal” structure where the central and the local governments
share the decisions related to the assets.
Regarding non-financial assets, in general terms, the local government are responsible
for all assets regarding Airports - except for Brussels Airport - and Ports, Roads and
Mineral and energy reserves. Railways and PSHs are under the responsibility of the
central government.
Asset cluster
Role of the body
Responsible for the operational
decisions
Responsible for the strategic
decisions
Owner of the asset
Financial assets
Airports
Ports
Roads
Railways
Mineral and Energy
reserves
Other naturalresources
Dwellings, Buildings otherthan dwellings
Infrabel
C3
SFPI-FPIM
C3
Local gov.
D1
SFPI-FPIM
C3
Local gov.
D1
Central gov.
C1
Central Gov.
C1
Local Gov.
D1
ConcessionairePSHs
C3 D3
Central & Local PB
C2 D2
No
n –
finan
cia
lassets
Airport operators
C3 D3
SPF
C2
D2
Loc. PB
Local gov.
D1
National Bank
C2
SFPI-FPIM
C3
RIS
C2
Port Authorities
D3
Port Authorities
D3
Local gov.
D1
Local gov.
D1
Statistical Institute
C2
Infrabel
C3
Infrabel
C3
Central Gov.
C1
Local Gov.
D1
Statistical Institute
C2
Central Gov.
C1
Local Gov.
D1
Central Gov.
C1
Local Gov.
D1
Building Agency
C2
SFPI-FPIM
C3
SFP
C1
Local gov.
D1
SFP
C1
Local gov.
D1
SFP
C1
Legend
C3C1 C2= Central government
= Central public body
= Central company-typestructure
D1 = Local governments
D2 = Local public body
D3 = Local company-typestructure
= Private bodyPM
n.a.Local gov.
D1
FPS Finance
C1
Statistical Institute
C2
Central Gov.
C1
Local Gov.
D1
National public data sources
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2. MAPPING OF THE INVESTMENT STRATEGY OF THE PORTFOLIO OF ASSETS
The Belgian government does not have a unique document outlining the investment
strategy for all the assets. In fact, the investment strategies are mainly defined at
regional level.
As it will be described in the following two sections, Belgium has not been promoting
many strategic initiatives regarding its public assets management in recent years.
Important reforms which gave more powers and responsibility to the regions were
carried out in the 1980s (e.g. the transfer of the responsibility for airports to the
regions, the constitutional reform which extended the powers of regions and
communities regarding Mineral and Energy reserves). Regarding the management of
the central assets, important reforms were implemented during the 2000s (e.g.
establishment of the SFPI-FPIM and of the railway infrastructure manager – Infrabel).
2.1. Financial assets
In 2006 the Belgian government established the SFPI-FPIM through the merger
between the Federal Participation Company19 and the Federal Investment company20.
The main aims were as follows: to boost the economic government initiative, to
support private companies, and to establish a company that could be an instrument
for the implementation of the state’s industrial policy.
The SFPI-FPIM was established with three relevant roles:
investment company: SFPI-FPIM invests in private companies with strategic
importance for the economy. SFPI-FPIM is willing to accept a lower financial
return on investment if it is in favour of certain social benefits;
public holding: SFPI-FPIM holds and manages shares in companies which
operate in sectors that are important as far as the central government’s policy
is concerned (i.e. aeronautical industry and airports, real estate, networks,
international investments, and innovation);
operational instrument: through Royal decree the government delegates
specific tasks to SFPI-FPIM. The majority of those tasks concerns the
management of the participations in financial institutions, following the
financial crisis in 2008.
However, in the last decades the presence of the Belgian government in the economy
has decreased. The privatisation process in Belgium properly began in the early
1990s, with the first operation being a private placement (40%) of Sabena Airlines
back in 1990. The privatisation process accelerated two years later when, in the
context of the privatisation program launched by the the central government in 1993,
the Belgian-Dutch insurance and banking group Fortis acquired a large stake in the
PSHs CGER Bank and CGER Insurance.
Looking at the past three decades, two periods can be considered as the most
important ones in terms of value of the deals:
1996–2000, when the privatisation process reached its first peak, mainly
thanks to the significant privatisations carried out in the telecommunications
sector (e.g. Belgacom, Distrigaz);
19 Federale Participatiemaatschappij (FPM). 20 Federale Investeringsmaatschappij (FIM).
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2011–2014, with the privatisation process driven by the dismissal of
government stakes in “Finance & Real Estate industry”, which were previously
bought by the Belgian government as a result of the financial crisis of 2008.
Regarding the actual investment strategy, the government remains committed to
complete the restructuring and privatisation of the state-owned banks, which were
nationalised as a consequence of the financial crisis of 2008, with the aim of further
strengthening the stability of the banking sector21.
Figure 2 Privatisations across markets by value and by number, 1980–2014,
Belgium
Sources: KPMG elaborations on data from the Fondazione Eni Enrico Mattei (FEEM) database, 1980-2014.
The value of privatisations refers to the sum of the values of the transactions agreed between a public (a)body (seller) and a private entity (bidder) for that period.
The number of privatisations refers to the total number of transactions for that period. (b) Sectors that are below the 5% threshold in terms of both total value of the transactions and number of (c)deals have been included in the aggregate cluster “Other”.
21 Please note that, as already outlined in Section 3.2 of Methodological Notes, public investments into the banking sector following the financial crisis of 2008 were always temporary and the government intentionally did not take any operational control over the “nationalised” banks.
50.5%
2.4%0.1%
22.6%
16.9%
7.2%0.3%
Manufacturing
Finance & Real Estate Industry
Services Industry
Telecommunications
Transportation Industry
Utilities
Other
7.1%
32.1%
10.7%
3.6%
10.7%
25.0%
10.7%
By value By number
11.5Eur Bn
28Deals
17
Figure 3 Privatisations across markets by value over time, 1980 – 2014, Belgium
Sources: KPMG elaborations on data from the Fondazione Eni Enrico Mattei (FEEM) database, 1980-2014.
The value of privatisations refers to the sum of the values of the transactions agreed between a public body (seller) and a private entity (bidder) for that period. (a) According to data retrieved from the FEEM database, there were no privatisations during the years 1980 – 1985.(b)
600
0
2,200
1,800
2,800
3,200
3,800
3,600
4,000
2,600
4,200
2,000
2,400
3,400
200
400
1,400
800
1,600
3,000
1,000
1,200
0.0%
0.0%
0.0%
1.5%
26.4%
98.5%
1986 - 1990
72.6%
1.2%
0.0%
3.2%
26.9%
19.0%
4.4%
1991 - 1995
0.0% 21.2%
2001 - 20051996 - 2000
71.7%
16.4%
2006 - 2010
33.0%
76.7%
18.5%
2011 - 2014
7.2%
0.0%
70.2%
24.6%
1.6%
0.0%
0.3%
1980 - 1985
2.9%
Eur Mn
Construction
Finance & Real Estate Industry
Manufacturing
Public Administration
Natural Resources
Agriculture Industry
Petroleum Industry
Services Industry
Telecommunications
Trade Industry
Transportation Industry
Utilities
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2.2. Non-financial assets
The Belgian central government has not adopted a plan which can establish a long-
term framework for strategic decisions related to non-financial assets or a broader
category of them.
In fact, related to the non-financial assets, investment strategies are mainly adopted
by the local governments.
Airports
The Special Law on Institutional Reforms of 8th August 1980, and its subsequent
modifications, gave the local governments the responsibility for airports and
aerodromes located in their territory. The central government kept the responsibility
for Brussels National Airport.
Therefore, there is not an overall investment strategy for airports in Belgium, but each
relevant local government defines the investment strategy regarding airports in its
jurisdiction. The Federal Public Service Mobility and Transport22 is responsible for
preparing, implementing and supporting the airport policy for Brussel airport.
The Walloon Government has established in 2001 the Walloon Airports Company
(Sowaer)23 to perform the following tasks:
the management, on behalf of the Walloon Government, of holdings held in the
management companies of airports and aerodromes;
investments in airport infrastructures development in Liège and Charleroi;
the assumption of expenses related to security and safety missions entrusted
to airport management companies.
The Flemish government established the public airport development companies
(Luchthaven Ontwikkelings Maatschappij - LOM) for development and maintenance of
its airport infrastructures.
In more detail, private operators (Airport Exploitation Company – LEM) are responsible
for the day-to-day management and operation of the platforms and for the upkeep of
part of their facilities. The maintenance and development of the so-called “basic”
infrastructures (runways, taxiways, airport access roads, etc.) is carried out by the
region via public airport development companies24.
In conclusion, the bulk of investment regarding airport infrastructures are still in the
hands of public bodies.
Ports
The prevalent ownership/management model is the so-called landlord model.
Specifically, the Port Authority owns and manages the sites in the port areas, and
makes them available to port companies for their activities on the basis of concession
agreements.
22 SPF Mobilité et Transports
23 For more details about the Walloon Airports Company please see: http://www.sowaer.be/ [Accessed 10th December 2017]. 24 For more details, please see: http://www.vlaamseluchthavencommissie.be/vlc/thema/regionale-luchthavens [Accessed 10th December 2017].
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The local governments have the responsibility for ports located on their territory.
Belgium has 4 seaports, all located in the Flemish region.
The Flemish government, according to its port policy, supports the ports:
via Flanders Port Area, which stimulates cooperation between the four Flemish
ports;
through investments in maritime access and locks;
by financial support to port authorities for harbor master services that are
directly related to traffic flow, safety and environmental protection.
Roads
Each local government is responsible for the strategic and investment decisions
regarding the road network under its jurisdiction. Therefore, there is no overall
investment strategy for roads in Belgium.
All three regions reformed the method for financing road infrastructures and facilities
by introducing a charge based on distance covered, aimed more at the use than the
ownership of a lorry. In details, on 1st April 2016, the Kilometer Charge for heavy
goods vehicles (HGV) of over 3.5 tonnes entered into force in the three Belgian
regions. The reform aimed at enhancing investments in the road network.
The bulk of investments regarding the road network are still in the hands of public
bodies, despite the use of Public-Private Partnerships (PPPs) in recent years.
Railways
The current governance regime adopted by the Belgian government was established in
2005 incorporating the principles established at European level in the directives of the
first and second railway packages:
the separation of the management of the railway infrastructures, within the
PSH Infrabel – i.e. the manager of railway infrastructures - and of the
operation of the services, carried out by the Société Nationale des Chemins de
fer Belges (SNCB);
the progressive opening of rail transportation to competition.
Rail investments are planned and budgeted through a multi-annual investment plan25.
The multi-annual investment plan is proposed by Infrabel and SNCB and has to be
approved by the central government. The current plan was adopted in 2013 and
defines the investments (type, amount and maturity) and budget requirements until
2025.
Investments concern the acquisition and renovation of rolling stock, the reception of
passengers, the extension and maintenance of the rail network capacity, and the
network security system. According to the estimates included in the multi-annual
investment plan, the Federal Planning Bureau26 has estimated a total investment of 30
25 Plan pluriannuel d’investissements (PPI). 26 Bureau federal du plan.
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Eur Bn by 2030, based on an average annual investment of 1.5 Eur Bn for Infrabel
and SNCB.
The guidelines for investment policy in the railway sector are the efficient use of
resources and the consistency of choices between infrastructure projects and those
aimed at the use of infrastructure.
The central government is currently reducing its subsidies to the railway
infrastructures. The Royal Decree of 25 December 2016 implied a 33% cut on the
total amount of subsidies intended for Infrabel, compared to the 2014 management
contract and the 2013-2025 multi-annual investment plan27.
Dwellings, Buildings other than dwellings
In 1971 the central government established a real estate manager of the central
state’s assets (i.e. the Belgian Buildings Agency), with the aim of improving efficiency
and transparency of the management of central government’s buildings.
The local governments are responsible for the decisions, management and disposal of
real estate properties within their jurisdiction. Therefore, there is no overall
investment strategy for buildings in Belgium; by contrast, each local government
defines the investment strategies regarding buildings in its jurisdiction.
Regarding the Belgian Buildings Agency, the current, main pipeline projects are as
follows:
establishment of interfederal satellite offices (i.e. federal office buildings where
work stations are available for employees of all central government);
construction and renovation of the central government’s buildings (e.g.
construction of an extension to the State Archives building in Arlon, renovation
of the Royal Institute of Artistic Heritage, replacement of the current Antwerp
prison).
Mineral and Energy reserves
In 1980, a constitutional reform extended the powers of the local governments. Some
powers over energy now belong to the local governments and others to the central
government28. This division of competences on energy matters necessitates
cooperation between the local government and the central government, as well as
consultation on the investment strategy.
This consultation has been formalised in the cooperation agreement on the
coordination of energy-related activities between the central government, the Walloon
region, the Flemish region and the Brussels-Capital region, resulting in the creation of
Enover/Concere. It is a consultative group that strengthens energy cooperation
between central and regional governments and brings together delegates from the
four energy administrations and the four cabinets responsible for energy, the
27 Infrabel Group (2017). Consolidated Annual Report 2016. Available at: https://www.infrabel.be/sites/default/files/documents/annual_report_2016_en_def.pdf [Accessed 10th December 2017]. 28 For more details about the cooperation between federal and regional government on energy http://economie.fgov.be/nl/consument/Energie/Politique_energetique/Contexte_Belge [Accessed 22th December 2017].
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Permanent Representation of Belgium to the European Union and the Directorate-
General for European Affairs and Coordination of the FPS Foreign Affairs.
In April 2017, the relevant energy ministers in Belgium (at central and local level)
decided to draw up an Inter-federal Energy Pact for 2030 and 2050. According to the
Paris climate agreement and the European objectives, the policy drawn up mainly
aims to develop the renewable energy production.
Other natural resources
The current legislative framework on the Belgian government’s Other natural
resources makes very difficult to infer the general investment strategy for Other
natural resources within government’s portfolio.
3. PERSPECTIVE ON THE EXECUTION OF THE INVESTMENT STRATEGY
From the mapping of the governance regime (Section 1) and the investment
strategies (Section 2) for the state-owned asset portfolio, some key insights about the
perspectives on the execution of the investment strategies can be drawn as follows:
the Belgian government has a “federal” structure where the central and the
local governments share the decisions related to the assets. In more detail,
with regard to non-financial assets many strategic decisions are under the
responsibility of the relevant regional governments;
currently there is no adopted overall strategy for all non-financial assets; by
contrast, the policy responsibility is mainly transferred to the relevant local
governments;
non-financial assets investments are mainly in the hands of the public sector;
the central government, through the significant portfolio of PSHs owned by the
SFPI-FPIM, mantains a strong presence in almost all sectors that are important
as far as the central government’s policy is concerned (i.e. aeronautical
industry and airports, real estate, networks, international investments, and
innovation).
Currently, there is no publicly available document that defines the destination of the
proceeds from forecasted privatisations.
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Figure 4 Matrix of Governance regimes vs Investment strategy by clusters of assets,
broad features, Belgium
Source: KPMG elaborations, based on governance regimes and recent observed strategies.
The position of each asset cluster with respect to the “investment strategy” dimension (x-axis) reflects (a)the general investment strategy adopted by the government for the cluster. The general investment strategy might not apply to every single asset within the cluster (e.g. the position of the cluster indicates that the government currently plans to invest/divest, and this does not imply that this applies to all assets within the cluster).
As Figure 4 shows the governance regime is mainly “de-centralised” for nodal
infrastructures (i.e. airports and ports). On the other hand, the central government
has mainly “centralised” those assets for which the government is responsible for the
bulk of the investment (e.g. the railway network through Infrabel and the buildings
through the Belgian Building Agency) (first two quadrants on the left of Figure 4).
Figure 4 also shows that overall investments in non-financial assets are mainly
realised by the public sector. However, the de-centralised model adopted for airport
and nodal infrastructures have allowed private operators to have a role in managing
the infrastructures.
4. SYNTHESIS OF STRENGTHS, WEAKNESSES, OPPORTUNITIES AND RISKS
Financial assets
Strengths/Opportunities:
o the central government has transferred the ownership and the
responsibility for operational decisions on a significant portion of its
PSHs in the hands of a unique PSH fully owned by the central
government, i.e. SFPI-FPIM. It is seen as an instrument to boost the
economic government initiative and to support private companies;
Weaknesses/Risks:
Decentralised
InvestmentInvestment with private investors
involvement
Divestment/Fullyprivate investment
Governanceregime
Investmentstrategy
Centralised
Legend
= Financial assets = Airports
Not clearinvestment
strategy pattern
= Ports = Roads = Railways= Mineral and Energy reserves
= Other naturalresources
= Buildings
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o lack of an explicit asset management plan on Financial assets in the
Belgian general government’s portfolio;
o as mapped in Section 1, SFPI-FPIM is a fully state-owned company that
constitutes a strategic tool for applying the policy designed by the
government for its portfolio of Financial assets. The mandate of SFPI-
FPIM and its objectives are set by the central government and therefore
are strictly depending on political discretionary decisions.
Non-Financial assets
Strengths/Opportunities:
o the central government transferred the responsibility for many strategic
and investment decisions for non-financial assets to the local
governments which could be better placed to serve people’s real
interests;
o for some Non-financial assets in the central government’s portfolio, the
government has transferred the ownership and the responsibility for the
operational decisions in the hands of a few public bodies that are
organised as PSHs or agencies (i.e. the railway network is owned and
operated by Infrabel, the majority of the central government’s buildings
are managed by the Belgian Buildings Agency);
Weaknesses/Risks:
o the local governments have many responsibilities regarding the decision
making for non-financial assets. This model could have significant
advantages but requires a clear overall strategy and well pre-defined
program of roles and responsibilities to ensure that all parties are
handling their responsibilities through the correct entity. In light of the
efforts made to improve transparency and accountability, the roles and
responsibilities regarding strategic or investment decisions should be
further redefined to ensure consistent transparency;
o there is no unique, specific document defining the state asset
management strategy for non-financial assets within the general
government’s portfolio;