Extension of the high speed rail network in France: Facing the curse that affects PPPs in the rail sector

Yves Crozet ()
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Yves Crozet: LET - Laboratoire d'économie des transports - UL2 - Université Lumière - Lyon 2 - ENTPE - École Nationale des Travaux Publics de l'État - CNRS - Centre National de la Recherche Scientifique

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Abstract: A large number of public-private partnerships (PPPs) have been awarded in the rail sector during recent decades. A review of rail PPPs over the last 30 years shows that some of them have failed, almost as though there was a curse on railway PPPs. Despite the evidence of risks associated with PPPs in the rail sector, the publicly owned French rail infrastructure manager (RFF) launched two major PPPs and a very large concession between 2010 and 2012. This decision was taken at the request of the government which made extending the network of High Speed Lines (HSLs) the cornerstone of its rail policy. After a description of the curse affecting some rail sector PPPs, the paper proposes a detailed presentation of the main on-going HSR projects in France. The aim of the paper is to explain how RFF and the French public authorities have tried to face the risks that affects rail sector PPPs. Why the government did recommend a concession for the biggest project and PPPs (in the strict sense of the term) for the other two? What are the main risks that remain for the public authorities when large projects face difficulties? The state is very often the lender of last resort but also the operator of last resort because it is usually highly unacceptable to simply close the service down. The paper also considers another major source of risk – the fact that public decision-makers behave like "risk lovers". In this way they provide their private sector partners with margins for manoeuvre that encourage opportunistic behaviours. In order to protect itself from the principal risk the state must first protect itself from itself!

Keywords: Appraisal methodologies; Cost benefit analysis; Infrastructure; Investment; Public-private partnership; Railways; Risk; Transport (search for similar items in EconPapers)
Date: 2014-12
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Citations: View citations in EconPapers (3)

Published in Research in Transportation Economics, 2014, Competition and Ownership in Land Passenger Transport (selected papers from the Thredbo 13 conference). Edited by John Preston, David A. Hensher and Ruth Steel, 48, pp.401-409. ⟨10.1016/j.retrec.2014.09.065⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01372609

DOI: 10.1016/j.retrec.2014.09.065

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