The matter in summary In three years, it has become almost half a billion more expensive to run transport in Nordland due to cost growth. Nordland County Council reports a deficit of NOK 16.8 million due to underfunding of free ferry connections. Nordland County Council will not reintroduce payment on the ferries for fear of losing state income. The Ministry of Transport is aware of the increase in prices in the ferry sector and believes they have compensated the county authorities for increased costs. The summary is made by an AI service from OpenAI. The content is quality assured by news’s journalists before publication. – As long as free ferries are underfunded, it means that the measures we want to take in the summer, such as increased frequency and more ferries, will be more difficult to do. This is what the county councilor for transport in Nordland, Marianne Dobak Kvensjø (H), says. With 23 ferry connections, Nordland is one of the largest ferry counties. But the many ferries have led to regular chaos for several summers. Overcrowded ferries, endless queues and crew shortages have been regular occurrences. The fact that the ferries became free has not reduced the number of travelers either, quite the opposite. The county has tried to compensate for the large increase in traffic with larger ferries and more departures. But that could come to an end as early as next summer. Losing tens of millions every year It was in July 2022 that the government began to introduce free ferries on connections with less than 100,000 travellers. The following year they followed up with even more connections. Instead of the counties taking ticket money from the travelers, the lost revenue should come from the government. Two years after the introduction of the scheme, Nordland county council sounds the alarm. Aina Johanne Nilsen (Sp) is county councilor for finance in Nordland. Photo: Marius Guttormsen / news – When we look at what we get from the state and what we have lost in ticket revenue, the difference is minus NOK 16.8 million, says county councilor for finance, Aina Johanne Nilsen (Sp). This has consequences for measures which were supposed to reduce ferry chaos along the coast. For the deficit on the free ferries adds another stone to the burden in an already stressed county economy. Don’t want to charge again – fears “punishment” – We see that within bus, ferry and fast boat the cost growth has been enormous in recent years, says Nilsen. Since 2021 alone, growth has been NOK 422 million for ferries, fast boats and buses in Nordland. – If we are to maintain the current level, and preferably increase it in line with the business world and the citizens’ needs, there is a need for the state to step in and help with the growth that has been – and will continue to affect – Nordland, says Nilsen. Nordland county council had to drag the tender process across the Alstenfjord, from Sandnessjøen (pictured) and over to the municipalities of Herøy and Dønna. Photo: Synnøve Sundby Fallmyr Recently, the county has withdrawn the tender competition on Alstenfjorden for two of the busiest connections in the county. The reason? The offers that came in were twice as expensive as the county had budgeted for. – When we have tenders out, we see that the offers we receive are twice as expensive as we have the financial framework for. Then we have to constantly make adjustments, such as having different types of vessel than what we want or cutting the route offers, says Dobak Kvensjø. – Can’t you just charge for the ferries again? – It is a political decision. Now the government has punished those who have chosen to charge, that is to say they are taking away part of the income we get from the state. They do that so that we can keep the free ferries. So we do not intend to introduce payment as of now, says Dobak Kvensjø. Marianne Dobak Kvensjø (H) is county councilor for transport in Nordland. Photo: Sofie Retterstøl Olaisen / news Rogaland: Introduced payment – reversed after six months The county council points to Rogaland county council, where the politicians decided in December 2023 to again charge for the ferries. But then the government threatened to withdraw NOK 9.2 million in transfers, and suddenly the county turned around again in June 2023. At the same time, it has been calculated that it costs NOK 22 million a year to run the ferries for free. – The government put us in a predicament. So we concluded that if the government is taking so many millions from us, then we had to bow out. This could have led to ferry prices becoming disproportionately high. That’s what the head of the transport committee in Rogaland, Lasse Anfinsen Fredheim (H), says. Lasse Anfinsen Fredheim (H) is head of the transport committee in Rogaland county municipality. Photo: ASTRID HAGLAND GJERDE – We thought it was more appropriate to charge than to shut down the ferries. – Were those the alternatives? – We are struggling to get the budgets to go up. So either we have to close ferry and speedboat offers, or charge for the ferries. Now Rogaland has announced a major review of the transport services in the county as a result of too little money. Møre and Romsdal: – Not possible to maintain the offer – In the current budget for 2024, a decision was made on a total reduction of NOK 30 million in the public transport area. The forecast for 2024 shows a total net additional consumption of NOK 102.8 million. That’s what transport director Jesper Wiig says in Møre and Romsdal county municipality. He says that the main reason for the extra spending is reduced ticket revenue, with the budget running at a loss of NOK 68 million. Jesper Wiig is transport manager in Møre og Romsdal. Photo: Roar Strøm / news The economic situation also leads to consequences for the offer, where in the future it will struggle to deliver what it does today. – The proposed savings measures are at a level that will make it impossible to maintain current service production without a significant increase in income. Read the full answer from transport director Wiig – How do you summarize the financial situation of the county council when it comes to transport? – In the current budget (2024), a decision was made on a total reduction of NOK 30 million in the public transport area. The forecast for 2024 shows a total net additional consumption of NOK 102.8 million. The forecast takes into account the ceiling increase that was made earlier in 2024. The main reason for the additional spending is reduced ticket revenue compared to the budget of a total of around NOK 68 million. In addition, there is additional consumption linked to the index, estimated at NOK 31.7 million. According to the county council’s financial regulations, it is likely that this additional consumption will have to be covered in its entirety over the next four years. – What consequences can the economic situation have for the offer to people? – Also in the years ahead, the county council must make significant savings in the area of transport. In the work on the upcoming financial plan (2025-2028), the proposed savings measures are at a level that will mean that it will not be possible to maintain current service production without a significant increase in income. – Specifically free ferries – is this underfunded? – The introduction of free ferries has led to a loss of income, which means that net operating expenses in the county road ferry operation have increased. Møre og Romsdal county council has shown in many cases that given the route offer that is given today, the county road ferry operation is underfunded. The compensation that comes from the ministry is in line with the national standards, and not the actual offer that the county council has in route production. – In the model that calculates ferry revenue in the revenue system today, it is not possible to split what comes from free ferries and what comes from reduced ferry fares. This was confirmed by the Minister of Local Government and Districts in written questions and answers (document no. 15:2287): “This means that it is not possible to calculate how the ferry criterion would be without a tariff reduction and free ferries, and thus it is also not possible to calculate how the compensation of NOK 1,046 million is distributed in the proposal for the state budget for 2024. – Does the financial situation exceed future tenders, and is it feared that people may receive a worse offer in future contracts? – Møre og Romsdal county council must reduce greenhouse gas emissions in line with the national target of 55 per cent by 2030. The county council has previously decided that county purchasing power should be used in the work for greenhouse gas cuts and environmentally friendly solutions, by emphasizing environmental and climate requirements when tendering. Several of the strategies within climate and environment will involve increased operating and investment costs for the county council.However, with a strained economy in the county council, it is possible that there will be further savings, and a requirement to stay within the existing financial framework, which could affect future contracts. Troms: Shares the concerns – We recognize ourselves in the picture from Nordland, both on free ferries but also general price growth, both on electrification but also general operation. That’s what Bjørn Kavli, who is head of transport in Troms County Municipality, says. Bjørn Kavli is transport manager in Troms county municipality, and shares the concerns from Nordland. Photo: Erik Waagbø / news – The problem is that use is increasing, and there is a demand for larger ferries. On some sections, we see that the number of users is clearly increasing. And free offers lead to increased use of the services, he says. At the same time, price growth has far exceeded what has been received from transfers from the state, says Kavli. Growth has been between 16 and 20 per cent in recent years, so it represents a significant leap forward, he says. KS: – The foundations are shaking According to a recent survey by KS, 13 out of 14 county municipalities report an additional expenditure of NOK 900 million. There are likely to be major cuts and budget overruns in public transport around the country. – The foundations are now shaking in Norwegian municipalities and county municipalities. It doesn’t add up anymore. Welfare services for people across the country are at stake. The seriousness is greater than ever, says KS leader Gunn Marit Helgesen. Gunn Marit Helgesen is head of KS. “The challenge in the public transport sector is greater than the excess consumption indicates. Several county councils have made cuts in route offers and increased fares,” KS writes about the findings of the survey. The Ministry: – Well aware of the price increase, news has sent a number of questions to the Ministry of Transport. State Secretary Tom Kalsås (Ap) does not answer these specifically, but writes the following in an e-mail: – The government is well aware of the rise in prices in the ferry sector. In the revised national budget for 2023, the municipal sector was compensated for the increased cost growth. Tom Kalsås is state secretary in the Ministry of Transport for the Labor Party. Photo: Henning Rønhovde / news – The county municipalities then received a more than proportionate distribution between the municipalities and the county municipalities due to the extraordinary increase in costs, including in the ferry operation, Kalsås continues. He also writes that the government has repeatedly increased the discretionary income of the county councils, and compensated for the costs associated with reducing ferry tickets and free ferries. – We understand that increased interest costs and price growth create a need for new priorities. The county municipality must make its own assessments of how the free funds are to be used and how the offer is to be set up. This is what news has asked the ministry about Nordland county claiming they lose close to NOK 17 million annually due to sheer underfunding of the free ferry – is this true and why does the government not compensate the scheme in full? While the ferries have become free, it is the county that has to bear the cost when there have been more travelers – How will the government ensure that the counties have enough money to actually operate the ferries in a satisfactory manner? The increase in costs also affects the counties, and in Nordland it has become 422 million more expensive in Nordland over the past three years with buses, ferries and fast boats. Is the government doing anything to compensate for this increase in costs? Nordland has several ferry connections where the contracts expire in February next year. But several tenders have been withdrawn because the offers that came in were more than twice as large as the budget framework allows. What does the government think about this situation, and is it feared that the supply may deteriorate in the next tenders? Published 08.10.2024, at 05.37
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Several counties warn of financial consequences of free ferries – news Nordland
