Why can’t Britain build a high-speed rail network? Perhaps risk appetite is to blame

Reporting from Asia often highlights the prominence of rail as a cornerstone of infrastructure development.

In Korea, the journey between the country’s two largest cities — my home city of Seoul and southern city Busan — covers 400 kilometers (250 miles), or virtually the entire country, in just 2 hours and 15 minutes by the nation’s state-owned KTX. 

The story is much the same in Korea’s neighboring countries. Japan’s Shinkansen, an icon of rail innovation and a tourist attraction in its own right, connects Tokyo and Osaka in 2 hours and 30 minutes over nearly 500 kilometers (310 miles).

China, meanwhile, operates the world’s largest high-speed rail network, spanning more than 40,000 kilometers (25,000 miles) and reaching nearly every province. Its trains, running at speeds of up to 350 kilometers per hour (220 mph), have redefined long-distance travel.

Across the globe, countries like France have also invested in extensive high-speed rail systems, proving that such networks are not just possible but essential.

“HS2, once envisioned as the backbone of modern rail connectivity, has instead become a case study in how poor risk allocation can derail ambition.”

Britain’s HS2 was billed as the country’s answer to Asia’s high-speed rail dominance. The country’s struggle to develop high-speed rail is often blamed on political indecision, public opposition, and spiraling costs. High land acquisition, labour, and material costs all drive cost overruns.

While these factors are undeniable, another issue may lie beneath: a flawed approach to risk management, or more specially risk appetite. Rather than mitigating risk to enable large-scale infrastructure, the UK’s process often amplifies it — through excessive caution, misplaced financial planning, and bureaucratic paralysis.

HS2, once envisioned as the backbone of modern rail connectivity, has instead become a case study in how poor risk allocation can derail ambition.

Over-mitigating risk at the planning stage

Every major infrastructure project faces risks: environmental, financial, legal, and social. The goal of risk management should be to navigate these challenges efficiently — not to become so entangled in avoidance strategies that progress grinds to a halt. Yet, Britain’s approach to high-speed rail suggests the latter.

Take regulatory risk. HS2 has been subjected to one of the most exhaustive planning and approval processes in infrastructure history.

Environmental and community impact assessments, while very much important, have been layered to the point of obstruction. Public inquiries stretch for years, with the cost of delays often outweighing the risks they aim to prevent. 

Then there’s legal risk. The UK has a well-established system for public objections, but the sheer volume of legal challenges lodged against HS2 — ranging from compulsory purchase disputes to environmental concerns — has slowed the project to a crawl.

While other countries resolve such disputes within set timeframes, Britain’s legal framework enables hefty delays. The result? A risk mitigation approach that paradoxically increases uncertainty and cost.

Procurement risk has also played a role. Unlike France’s Société nationale des chemins de fer français (SNCF) or China’s China Railway Construction Corporation (CRCC) — both of which employ centralised models for high-speed rail — Britain has relied on a fragmented tendering process.

Multiple contracts, each with different risk profiles, have led to cost inflation and inefficiencies. Instead of streamlined decision-making, the UK rail sector suffers from a complex web of accountability gaps.

Managing the wrong risks

One of the most striking failures of HS2 is its financial mismanagement — not in terms of unexpected costs, but in the way risk has been allocated. A fundamental principle of infrastructure financing is that long-term projects require a flexible and realistic risk appetite. The UK’s approach has been the opposite.

HS2’s initial budgets were optimistic to the point of fantasy, often failing to account for inflation, material shortages and labour price shifts.

When costs inevitably escalated, the government responded by scaling back the project rather than addressing systemic funding flaws.

The decision to cancel the Birmingham-to-Manchester leg in 2023 highlighted a risk-averse mindset: instead of absorbing cost overruns as part of a long-term investment, the government cut losses — leaving Britain with an expensive half-finished railway. 

“One of the most striking failures of HS2 is its financial mismanagement”

Risk transfer has also been handled poorly. Contractors and suppliers have been asked to absorb substantial risk, leading to inflated bids and, in some cases, companies pulling out altogether.

In contrast, France’s TGV network and Japan’s Shinkansen benefited from state-backed contracts that provided financial certainty, ensuring that private-sector partners remained engaged. Britain’s reluctance to assume responsibility for project risk has instead created a vicious cycle of escalating costs and reduced investor confidence.

Funding models have further compounded the problem. Countries with successful high-speed rail networks have often relied on a mix of public and private investment, with long-term revenue projections justifying upfront costs.

Japan’s Shinkansen was financed through a combination of government bonds and private-sector partnerships, spreading risk effectively. China, meanwhile, leveraged state-owned banks to provide low-cost loans, ensuring financial stability.

The UK, however, has relied on politically fragile public funding, making the project vulnerable to shifting government priorities. 

Risk transfer failures and political uncertainty

One of the biggest risks in any infrastructure project isn’t financial — it’s political. Unlike France, Japan, or China, where high-speed rail was backed by long-term national strategies, Britain’s approach has been marked by hesitation and reversal.

A major problem is the lack of a stable risk appetite at the government level.

HS2 was originally sold as a transformational project for the North. Successive governments, however, have chipped away at its vision, reducing its scope to the point where its benefits are questionable.

This uncertainty makes it nearly impossible to manage risk effectively. Investors, contractors, and even local authorities hesitate to commit when the project’s future is in perpetual doubt. 

This contrasts sharply with France and China, where state-backed infrastructure is treated as a strategic priority. The French government’s willingness to assume long-term risk allowed the TGV network to flourish, while China’s decisive infrastructure strategy ensured that its high-speed rail network became the world’s largest in just over a decade.

Britain, by contrast, has been paralysed by short-term political calculations.

Is risk management killing high-speed rail?

Britain’s failure to build high-speed rail is not just a story of politics or cost — it’s a failure of risk management.

Rather than treating risk as something to be understood and managed, decision-makers have sought to avoid it entirely. The result has been endless delays, escalating costs, and a network that falls short of its original promise.

The irony is that true risk management isn’t about eliminating uncertainty — it’s about making informed decisions despite it. Countries that have successfully built high-speed rail have done so by taking calculated risks, whether through state-backed investment, streamlined planning, or a long-term commitment to infrastructure.

Until Britain recognises that avoiding risk is itself a risk, it will continue to fall behind.