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

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!