HS2: £102.7bn — and up to 13 years late.
HS2 (“High Speed 2”) is Britain’s flagship high-speed rail line, meant to link London, Birmingham and the North. It has become the reference case for how public megaprojects go wrong.
The Public Accounts Committee called it “a casebook example of how not to run a major project.” A third of the overrun is pure inflation — estimates that were simply not refreshed as the project ran.
Your fiscal framework is a flow statement.
Almost every fiscal rule watches flows — the deficit, the primary balance, debt-to-GDP. But a government’s biggest risks are stocks: guarantees, PPP commitments and state-owned-enterprise exposures that sit off the balance sheet and stay invisible until they fire.
A deferred subsidy or an implicit guarantee behaves like debt — but is reported, if at all, only in a footnote. Investors already price it; the framework does not.
Recalibrating the toll-road guarantee.
Indonesia funds much of its motorway network through PPPs backed by a minimum-revenue guarantee (MRG) — the State promises to top up the concessionaire’s income if traffic falls short. It unlocks private capital, but it also hands the government a demand-risk liability that can balloon quietly.
Its new rules — Public Works Regulation No. 2 of 2026 — tighten unsolicited proposals and the MRG framework. A rare case of fixing the tool before the crisis, not after a bailout.
SOE losses, post-IMF, threaten the debt path.
Ghana exited an IMF programme, but its state-owned enterprises — power, utilities — keep running losses. Because everyone assumes the State will stand behind them, those losses are an implicit guarantee: unpriced, off-budget, and quietly compounding onto the sovereign balance sheet.
It is the classic pattern: the exposure is discovered too late, when a bailout is already unavoidable and the fiscal cost is large.
The risk is on a balance sheet nobody keeps.
Overruns, guarantees, SOEs, deferred commitments — four faces of one gap: frameworks built for flows, blind to the stock of risk. The tools to see it exist: