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Management of public utilities progress

Public utilities refer to the business that is responsible for maintaining public service infrastructure. Maybe it will be under the control of natural monopoly or the government. However, privately-owned utilities will be supervised by administration regulation. Generally, public utilities include electricity, water supply, waste treatment, sewage treatment, gas supply, transportation, and communication, etc. From the point of the trend of reform in some countries, departments like social security, urban transportation, cultural education and others play an important role in the development of society respectively with different ownership form and organization. However, an obvious trend of public utilities tends to weaken the monopoly of the state, minimize the purpose of profit and strengthen the socialization degree. The social and public overall interests are the main trend of public utilities, which is also the most essential characteristics. These overall interests have irreplaceable functions because they are linked with national economic development. Therefore, the public utilities can be also expressed as the organization, departments or public enterprises that directly provide public products and services or coordinate interest relationship in all respects with the purpose of realizing public’s overall interests and premised on social development and progress.

Generally, public utilities are different from ordinary enterprise, and they’re mainly manifested in the following aspects: firstly, public utilities mainly provide labor services and it has few or no production of tangible products; secondly, the public utilities have a wide range of service, nearly providing service to all residents and organizations in the whole city, including free services; finally, it will bring economic benefits, social benefits, and environmental benefits to the whole city.


Urban public utilities refer to the construction and administration that engaged in urban water supply, heat supply, gas supply, and public transportation, etc, and it belongs to the infrastructure industry. Besides, urban public utilities tend to be essential for urban line operation and residents’ daily life because they are the basic conditions for urban survival and development. The advancement and development of public utilities can promote the cities’ labor and work efficiency and create a beautiful environment as well as good condition. It also reflects the cities’ appearance, cultural standard, living level and the overall appearance of the economic level. The production of public utilities can be divided into two aspects, namely public production and non-public production. Public production refers to the production organized completely by government agencies and then sell them to the public with a lower price standard than market price. While non-public production is produced by private investment and certain allowance should be given from government. Besides, the quantity and price of the product should be regulated by the government and the supply should also be guaranteed.



From the point of development trend, public production puts a lot of pressure on government finance, and the quality of its service tend to be not good because of the lack of necessary competitiveness. Therefore, the non-public production of public utilities has been popular since the 1970s, which stands for the development trend of service production field. With regard to the financing aspect, simple government investment cannot satisfy the financing requirements for cause construction. Therefore, the government must expand new financing channels, set up pluralism investment subject, and allow multiple economic components to participate and operate. Therefore, it seems that intervene the price by government and guarantee the supply is especially important. In terms of public service pricing, the government should not only consider the supply and demand relationship but also consider the basic requirement of public and social interests. In the process of price-fixing, the government should attach much importance to the public’s right to know and restrict. One of the basic ways to protect the public’s right to know is the price hearing system. Generally, the price hearing system is composed of government departments, producing enterprises of public utilities and a relevant consumer representative. The hearing has no decision on the final price, but it has a certain restrictive effect. The core of the utility price hearing is the disclosure of the company’s product cost accounting.


One of the subjects that play a special role in the field of public utility construction is the special corporate group. The implementation of government public affairs is still done by special legal persons in addition to the direct organization and management of the government. Therefore, the activities of special legal persons can be regarded as an integral part of the government’s public affairs. It is only because the public affairs that are responsible by the special legal person implementing have certain business management characteristics, so special legal persons form can be not restricted by the government budget, administrative fees, civil servant management, etc.. It is more efficient compared with the direct production and supply of public services by government departments. However, the special legal person is a quasi-government department. Although it adopts independent accounting and has certain operational autonomy and management flexibility, it is still placed under the strict “special” supervision of the government. Special legal persons are generally divided into public corporations, business groups, public libraries, and communes.

Author: Ashley from ftm machinery, Source From:  https://www.ftmsino.com/

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