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PPPs in the rail sector - A review of 27 projects

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  • Dehornoy, Julien

Abstract

PPPs in the rail sector have become increasingly common in the last two decades. They have been praised and criticized for a variety of reasons. This paper provides a comprehensive study of all rail PPPs to date, in order to observe long term trends and to quantify to potential of failure or success of such PPPs. Our key finding is that optimization of risk management explains two major trends : (i) projects are moving from integrated, stand-alone systems toward sub-systems with complex interfaces with other networks or sub-systems, (ii) moral hazard, incomplete contracts and strategic bahaviors create an incentive for concessionaires to make over-optimistic ridership forecasts and explain why most traffic-based concessions failed.

Suggested Citation

  • Dehornoy, Julien, 2012. "PPPs in the rail sector - A review of 27 projects," MPRA Paper 38415, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:38415
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    File URL: https://mpra.ub.uni-muenchen.de/38415/1/MPRA_paper_38415.pdf
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    References listed on IDEAS

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    1. Nilsson Jan-Eric & Hultkrantz Lars & Karlström Urban, 2008. "The Arlanda Airport Rail Link: Lessons Learned from a Swedish Construction Project," Review of Network Economics, De Gruyter, vol. 7(1), pages 1-18, March.
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    Cited by:

    1. George Bogdan DRAGAN, 2014. "Optimal Industrial Organization As Knowledge Management Challenge On The Railway Sector," Risk in Contemporary Economy, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, pages 199-206.
    2. Crozet, Yves, 2014. "Extension of the high speed rail network in France: Facing the curse that affects PPPs in the rail sector," Research in Transportation Economics, Elsevier, vol. 48(C), pages 401-409.
    3. Bugalia, Nikhil & Maemura, Yu & Dasari, Rohit & Patidar, Manoj, 2023. "A system dynamics model for effective management strategies of High-Speed Railway (HSR) projects involving private sector participation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 175(C).
    4. Huang, Yuxia & Jiang, Chenxin & Wang, Kun & Xiao, Yibin & Zhang, Anming, 2021. "Public-private partnership in high-speed rail financing: Case of uncertain regional economic spillovers in China," Transport Policy, Elsevier, vol. 106(C), pages 64-75.

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    More about this item

    Keywords

    railways ; public-private partnerships ; ridership forecasts;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation

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