Minister says capital region transport deal is not in crisis

Icelandic Finance Minister Daði Már Kristófersson says funding for the capital region’s transport agreement has fallen behind plan, but insists the deal is not in jeopardy and the state will meet its commitments. He spoke to Morgunblaðið.

Kristófersson said he shared concerns raised by Reykjavík Mayor Hildur Björnsdóttir. A funding proposal approved by the municipalities, but made subject to reservations by the state, has not progressed as planned. Nor has the proposed sale of state-owned Keldnaland, which was expected to raise about 50 billion kronur.

Björnsdóttir told Morgunblaðið that the agreement was in jeopardy because of the uncertainty over funding. She called on the government to clarify how it would cover the state’s share and rejected tolls on existing main roads into the capital region.

Kristófersson said a steering group made up of ministers and capital-region mayors had met and work was under way to find a funding solution. He acknowledged that preparations for the Keldnaland sale were taking longer than expected and said the parties needed to discuss how to address the delay.

The agreement allows borrowing, he said, but future revenues would need to be secured. Its original financing plan included so-called delay and traffic charges. Kristófersson said those charges remained part of the discussion, along with how any gains from Keldnaland would be shared.

The minister also said charges for new transport infrastructure, such as tunnels or bridges, could be considered. He said no analysis had yet established whether that approach was feasible.

Björnsdóttir has also criticised a proposed 25 percent reduction in funding for the agreement in next year’s budget proposal, saying the uncertainty made it difficult to see how construction could proceed as planned.