7 Economic and administrative consequences
The Government will continue to actively use policy instruments in its Svalbard policy and strengthen central government management and national control in Svalbard in line with the development trends described in this report. In the report, the Government has presented various measures which will be considered in connection with the Government’s continued efforts related to Svalbard. Some of the measures represent a continuation and clarification of current principles and practices. Such measures can be covered within the current budget framework. Other measures require budget allocation in order to be implemented. Measures requiring budget allocation will be assessed and, if necessary, proposed in the ordinary budget process, and subsequently discussed in the annual budget propositions. Where measures require legislative or regulatory amendments, these will be investigated and presented for consultation.
7.1 Substantial infrastructure in Svalbard
There are significant national interests related to Svalbard, resulting in a strong national commitment to and involvement in its infrastructure. As discussed in this report, critical infrastructure is a fundamental prerequisite for both activity and residence in Svalbard. The physical infrastructure of Longyearbyen thereby contributes to maintaining Norwegian communities on the archipelago.
Longyearbyen Community Council is responsible for infrastructure in Longyearbyen that is not assigned to the State or other actors. In many cases, major investments in Svalbard can be more costly than similar investments on the mainland, as different conditions apply to infrastructure in an arctic archipelago involving vast distances. Furthermore, the population of Longyearbyen is relatively small, meaning that there are fewer users to share the investment cost in cases where all or part of the costs are to be charged to the users.
Much of the infrastructure in Longyearbyen was built in the 1950s, ‘60s and ‘70s, intended for a different era, a different community and different use and utilisation than is currently the case. Parts of the infrastructure are beginning to show signs of wear and tear or maintenance backlog as a result of their relatively long service life, which is exacerbated by climate change, including permafrost thaw. In many cases, rehabilitating buildings and infrastructure can be nearly as costly as new construction.
The Government does not want to facilitate growth in Longyearbyen that would trigger new needs for major infrastructure investments. In the short and medium term, however, it is likely that investments will be required in order to maintain the level of current infrastructure. This may, for example, apply to the energy supply, drinking water supply, roads, water supply and sewerage, housing stock and the fibre-optic cable connection to the mainland. Investment needs for various infrastructure components may overlap in time, partly due to the fact that much of the existing infrastructure was established around the same time.
The cost of energy production has increased as a result of the transition from coal to diesel. In the updated 2023 budget, the Storting increased its allocation to Longyearbyen Community Council by NOK 50 million, based on a proposal from the Government, to contribute to reducing energy prices in Longyearbyen. In the Revised National Budget for 2024, the Government proposed allocating an additional NOK 125 million in order to contribute to reduced energy prices in Longyearbyen, as well as NOK 42 million for investments in infrastructure that strengthen redundancy and security of supply for energy in Longyearbyen. At the same time, the Government proposed allocating NOK 3 million for state co-financing of a preliminary project to establish a reserve drinking water source in Longyearbyen.
The Government will continue to assess the need for investments in critical infrastructure in Longyearbyen, including matters of financing.
7.2 Measures with limited or no budgetary consequences
In order to support the objectives of Svalbard policy, the Government is proposing measures to contribute to maintaining Norwegian communities on the archipelago. The housing policy principles outlined in this report will bolster housing policy as an instrument to steer development in Longyearbyen in the desired direction.
The strong national commitment to, among other things, state ownership of important infrastructure in Svalbard facilitates long-term planning and development of the archipelago in line with the objectives of Svalbard policy. This report provides instructions for the use of publicly owned infrastructure such as airports and ports, to ensure that their use supports the objectives of Svalbard policy.
The Government will establish a separate Svalbard Research Office to provide clearer Norwegian research leadership in Svalbard within the current budget framework and facilitate UNIS’ role as the sole provider of higher education in Svalbard. Research in Svalbard will continue to be based on Svalbard’s natural advantages and established communities. The established strategies for research and higher education in Svalbard and the research strategy for Ny-Ålesund Research Station will be maintained.
The Government will ensure that decisions concerning education, welfare and services are in line with the Svalbard policy framework, and will investigate proposals for regulatory amendments.
7.3 Substantial measures already initiated
The Government will prioritise completing the commenced avalanche protection of Longyearbyen centre.
Identity control and control of movement of goods were introduced in Svalbard in 2022. The Government will continue to implement and develop identity control and control of movement of goods in Svalbard, based on acquired experience since the introduction.
The Government has commissioned Store Norske Spitsbergen Kulkompani AS (SNSK) to carry out a concept selection study of various alternatives for power supply in Longyearbyen and a condition assessment of existing infrastructure, including finance requirements. The Government’s intention is for the State to take greater responsibility for power supply in Longyearbyen, e.g., through SNSK, and that responsibility for power supply be clarified as soon as possible.
7.4 Other measures
In this report, the Government proposes that measures in various domains be investigated further, including in the form of legislative or regulatory proposals. The economic and administrative consequences of the proposals for the central government and local authorities, the business sector and private individuals will be assessed in greater detail as part of this investigation. The economic consequences of the proposals will have to be managed within the existing budget framework, or in the ordinary budget process.
The proportion of Norwegian citizens in Longyearbyen has declined since the last report to the Storting on Svalbard was presented. To support the objective of maintaining Norwegian communities on the archipelago, the Government will introduce incentives that make it more attractive for Norwegians to move to and reside in Svalbard. At the same time, the Government will consider measures to reduce the pressure on the provision of social- and other services in Longyearbyen. Any measures will be managed in the ordinary budget process.
The Government will present a bill to make the General Application Act applicable to Svalbard. The Government will continue its work on assessing whether there is a need for further regulation of salary- and working conditions in Svalbard, and will investigate the regulation of public contractors’ requirements for salary- and working conditions.
The Government recognises the need for tourists in Svalbard to provide a greater contribution to funding infrastructure and other public services that are a prerequisite for tourism in Longyearbyen, and it will prepare a proposal for regulations on visitor fees for Svalbard. The economic and administrative consequences will be investigated as part of this proposal. Part of the revenue from visitor fees will be allocated to Longyearbyen Community Council.
The increase in maritime activity around Svalbard presents challenges for public safety and emergency preparedness. The Government will introduce a limit on the number of passengers on board cruise ships in the territorial sea around Svalbard and consider limiting the number of cruise ships sailing in those waters. The economic and administrative consequences will be investigated as part of this proposal.
Longyearbyen is not connected to larger systems for power and water supply, and robust local supply systems are therefore particularly important. The Government will consider measures to follow up the recommendations of the Total Preparedness Commission, including measures related to security of supply in Svalbard. This includes assessments of the future organisation of power and water supply with the possible establishment of a reserve drinking water source.
The capacity of port infrastructure in Longyearbyen is limited. The Norwegian Coastal Administration will assess current needs before conducting a new assessment of the scope, approach and timeline for a possible government-led port project in Longyearbyen. If it emerges that there is a basis for proceeding with the project, the Norwegian Coastal Administration will be able to propose specific measures as comments for the next report to the Storting on a National Transport Plan.
The Government will work towards ensuring a new, robust, high-capacity fibre-optic cable connection between Svalbard and the mainland to replace the current cable.
The Government aims to transfer the dwellings of Longyearbyen Community Council to the Norwegian Directorate of Public Construction and Property.
All of these proposed measures will have to be managed within the existing budget framework, or in the ordinary budget process.