Reykjavik mayor says transport pact funding remains unclear

Reykjavik Mayor Hildur Björnsdóttir says the government has yet to explain how it will finance its share of the capital region’s transport agreement, according to an interview with Morgunblaðið. She also says planned proceeds from the sale of state-owned Keldna land will not be available as soon as the agreement assumes.

The land sale was expected to raise 50 billion Icelandic krónur to help fund the agreement. But Reykjavik’s governing majority is unhappy with the proposed development plan, which is now being reviewed. Björnsdóttir said the review and negotiations over unresolved issues will take longer than expected, making it impossible for the proceeds to arrive in 2028 as planned. The city hopes to present the review’s findings shortly after the turn of the year.

Björnsdóttir said the city objects to the proposed transport plan for the Keldna development, including plans to place residents’ cars in central parking garages rather than provide parking beside homes. She said the city wants a plan that residents will want to live in and developers will want to build.

She said nearly 90 per cent of the transport agreement’s costs fall to the state, with just over 10 per cent covered by the capital region’s municipalities. Rejecting the agreement outright would not be a cost-saving measure for Reykjavik, she said, and could leave the region facing greater uncertainty over transport. The city wants to continue discussions with the government.

The mayor said Reykjavik opposes tolls on general traffic using existing trunk roads, including Ártúnsbrekka, and called on the government to propose other, more realistic ways to fund its share. The cost of the agreement’s projects was estimated at 311 billion krónur in the last review and is expected to rise further with inflation.