After the end of World War 2, American passenger railroads declined when they were unable to compete profitably with automobile and airline transport. In 1971, the federal government nationalized passenger service, and eliminated over half of existing passenger lines. Meanwhile, during this same period, many foreign countries were developing and building new high speed train lines: Japan, in 1964; France, in 1981; followed by other Asian, European, and Scandinavian countries. Thus, when rail promoters were planning new high speed lines in the U.S., starting in the 1980’s, they were obliged to rely on foreign technology, expertise, and to some extent, financial support.

In reviewing the existing literature, I find no studies specifically concerning foreign participation in American high speed rail projects. My preliminary interviews with representatives of foreign banks, train manufacturers, and rail operating companies reveals that they bring differing assumptions about, and organizational frameworks for financing construction and operation of high speed lines in the U.S. This leads me to hypothesize that foreign and American companies face difficulties working together, which could interfere with the desired outcome of implementing new lines.

I propose to study the issues, problems, and obstacles that foreign rail promoters confront when working with their American partners, particularly with regard to project finance. I focus on France as a representative foreign nation because the French rail industry has been closely involved with American high speed rail projects over many decades. The study objective is to develop policy recommendations for ameliorating the problems associated with foreign participation in American rail project finance.