Icelandic Minister anticipates updated transport agreement for capital region by month-end

Icelandic Minister of Infrastructure Svandís Svavarsdóttir anticipates that an updated transport agreement will be signed by the end of the month, following a government meeting. The revision was originally slated for completion last summer. “We are just tying up loose ends,” she noted, highlighting that the summer was used to refine specific aspects of the agreement.

The updated transport agreement for the capital region has been awaited for approximately a year. This agreement is a collaborative effort between the government and six municipalities within the capital area and was first signed in 2019. An announcement in mid-March of the previous year indicated plans for an update.

Cost assessments were a significant focus of the revision, as many projections were underestimated, compounded by inflationary pressures. Initially, the cost was estimated at around 120 billion Icelandic krónur, but this did not fully account for the expenses related to the Sæbrautar tunnel.

Current Prime Minister Bjarni Benediktsson stated last autumn that the overall cost of the agreement has now surged to around 300 billion krónur, reflecting extensive underestimations across nearly all components of the agreement.

For the upcoming fiscal year, it is projected that funding for transportation will increase by approximately 6 billion krónur, primarily due to augmented contributions toward the transport agreement. Discussions continue about whether certain projects, such as the Miklabraut, will be developed as tunnels or overpasses.