When ppp projects become too big to failor when it is

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Unformatted text preview: the government greater control over how the high-speed rail line will operate. The public faces dangers that a PPP may create a publicly subsidized piece of infrastructure that is primarily used to serve the profit-maximizing purposes of a private entity in ways that conflict with the public interest. The most obvious example of this tension arises in the setting of ticket prices. A private concession operator will tend to want higher-priced tickets as a way to maximize their revenue for shareholders, even if higher ticket prices depress total ridership and therefore diminish the positive public impact of the route. The concessionaire for construction of England’s High Speed 1 line was forced to charge abovemarket access fees to recoup its investment. The British government later took over the company, a move intended to expand the use of the line. Credit: Darnell Ibraham A similar example occurred in the development of Great Britain’s first highspeed rail line, High Speed 1, which was built by London & Continental Railways (LCR) under a concession agreement with the British government.31 In an effort to maximize revenue and pay back its debts, LCR assessed track access charges to companies providing rail service on the line that were higher than commercial rates and were thought to be high enough to make it unprofitabl...
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