The politics of high-speed rail can be bizarre. Few people actually oppose connecting our cities with fast intercity trains. Most of the industrialized world has already shown that the idea is popular and works well. The politicians that do the most to prevent high-speed rail generally claim to be fans of bullet trains who just want the task to be left to the private sector.

In Congress, chair of the House Transportation and Infrastructure Committee John Mica (R-FL) last week released a six-year blueprint for America's transportation system that failed to allocate a dime for high-speed rail. Yet Mica calls himself "the best cheerleader" for high-speed rail. He insists additional public money shouldn't be spent on it or that each public dollar must leverage many times more private dollars.

A new report released today shows why leaving high-speed rail chiefly to the private sector is a dangerous pipe dream. The study, High-Speed Rail: Public Private or Both? Assessing the Prospects, Promise and Pitfalls of Public-Private Partnerships by U.S. PIRG shows that private financing and operations can be a supplement to public commitments, but not a substitute. Moreover, without tough public rules and steady government oversight, private partnerships will yield costly problems.

The issue isn't whether public-private partnerships (PPPs) can play a major role in developing high-speed rail. They can. Foreign and domestic firms have capital and expertise that can be cultivated. Infrastructure projects entail major risks that can be shared with private investors.

But high-speed rail simply won't get built without the public taking the lead. No modern high-speed rail line has ever been built with only private capital. Advocates for private-only investment ignore this fact. In several recent and current European high-speed rail PPPs, the public sector has been responsible for more than half the capital cost of the high-speed rail line. And often the "private" partners have actually been state-owned companies or highly-regulated entities with government representatives on the board, much like Amtrak.

Moreover, the experience with high-speed rail PPPs has been mixed. While PPP arrangements have brought private capital and expertise to the task of building high-speed rail, PPPs have also sometimes resulted in cost overruns, government bailouts, and other serious problems for the public. Private investment entails a number of additional risks and costs. For instance, private companies must offset their higher costs for capital, as well as costs related to the profits they pay to private shareholders. Private-sector actors can hold projects hostage and demand increased subsidies or other concessions from the government. In negotiating and enforcing PPP agreements, government must count on additional costs of hiring and retaining the lawyers, financial experts and engineers.

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