Harstad City, infrastructure in Northern Norway

With the aim of expanding infrastructure in Harstad, a tunnel is to be built to reduce traffic through the city center, public transport will be improved, roads will be upgraded, and measures will be put in place for pedestrians and cyclists. Several major business actors indicated early on that if they were to strengthen their presence in Harstad, they would expect a decision to improve infrastructure.

At the same time, there is ongoing city center planning, restructuring of kindergartens and schools, and an influx of asylum seekers fleeing war. Altogether, the political decision-makers in Harstad are faced with so many different challenges that, in the road package case, they ultimately do what is often done when control is lost: nothing.

The history

Various factors led to modules of the Harstad Package needing upgrades, parts of the package being deprioritized, and costs increasing from 2011 to a full 2.6 billion NOK in 2016 for completing the entire project.

The Harstad Package saw a cost increase of nearly 50% before construction even began, with those expected to cover 74% of the cost—the residents—being informed only after construction had started.

The population naturally became angry and questioned the processes that led to this preliminary outcome. Questions were raised about whether the package should be completed, or whether only ongoing projects should be finished while the remaining modules are abandoned.

In this article, we will attempt to shed light on the various aspects based on available information.

The public sector’s inability to stay within budget is not an unfamiliar phenomenon. The financial management of this project brings to mind the diving tower in Hamar, which cost taxpayers nearly 23 million NOK.

The political game

The first question when developing a project is whether the end user actually wants and needs the product. The red-green government approved a road package in autumn 2011 that was later halted as a direct result of the municipal election outcome in Harstad. The Progress Party became the clear winner with “No to toll rings” as its main issue.

Bård Hoksrud and Per-Willy Amundsen from the Progress Party stood in Harstad’s town square during the 2013 parliamentary election campaign, promising that if their party entered government, the Harstad Package would not be funded by tolls.

A petition with 9,000 signatures against toll financing, along with a clear drop in support for the package’s initiators, gave a strong indication of public opinion.

Nevertheless, the local political environment in Harstad, aided by a reversal from centrist parties, managed to approve the development.

The political process behind the Harstad Package has turned residents into spectators of a project they do not support, yet are expected to pay 74% of.

The current situation

At the time of writing, the package’s main supporters, the Conservative Party, have reversed their position and now want to stop development after ongoing modules are completed. Centrist parties and the Labour Party still support completing the entire package, while the Progress Party maintains local opposition to tolls despite being unable to act on it nationally.

Without going into detail about changes to kindergarten and school structures, we can conclude that elected officials have chosen not to listen to voters.

Public trust in political representatives in Harstad is likely at a record low.

Needs assessment and process

The KS2 report from Dovre Group, commissioned by the Ministries of Transport and Finance, was intended to ensure quality assurance of project management and cost estimates.

From autumn 2013, it set the project framework at 1.45 billion NOK (2013 value):

• Tunnel: 345 million
• Measures for drivers: 401 million
• Public transport: 104 million
• Pedestrians and cyclists: 350 million
• Toll stations: 32 million
• Uncertainty: 217 million
• Total: 1,449 million

Funding was shared between the state, county, and municipality:

• State: 350 million
• County: 24 million
• Municipality (tolls): 1,500 million

74% was to be funded by tolls.

These figures covered construction only, excluding interest and collection costs.

The report estimated total financing needs at 2.1 billion NOK:

• 1,450 million base cost
• 300 million collection costs
• 240 million interest
• 80 million real cost increases

This added 600 million NOK in non-construction costs, meaning that already by 2013 the total was 900 million above the original 2011 estimate.

The report also noted modest population and traffic growth projections and identified limited need in some areas, with certain arguments both supporting and opposing the project.

It highlighted the tunnel as the greatest uncertainty and noted it would be difficult to scale down if costs increased.

Financial concerns

A 2014 parliamentary decision showed that a significant portion of toll revenue would not go to construction. Around 47.6% of toll income would instead cover financing and collection costs.

This raises questions about who is actually responsible for the project and its management.

The governing group consists of representatives from the municipality, county, and the Norwegian Public Roads Administration. However, it does not have formal decision-making authority, requiring consensus among members.

Media coverage and reactions

Estimated costs have now reached 2.6 billion NOK, potentially rising to 3.1 billion when including additional costs.

Officials claim the project is within framework, though statements suggest uncertainty about unfinished modules.

Local leadership insists on completing the project, while financial solutions such as reducing interest costs appear limited due to already low rates.

There have been suggestions to extend toll collection periods or increase contributions from all parties.

Statements from local politicians indicate that cost overruns were discovered relatively late, raising concerns about planning and oversight.

The way forward

The budget has effectively exploded, and achieving satisfactory outcomes appears increasingly unlikely. Public confidence in governing bodies has been severely weakened.

Despite strong opposition, the project has moved forward and is now too far along to stop without major consequences.

The tunnel remains a central issue, with costs rising significantly but still relatively stable compared to other project components.

Recent proposals suggest that up to 67% of additional costs may fall on motorists through increased tolls over a longer period.

Final considerations

The project was clearly needed to improve infrastructure, particularly public transport and pedestrian facilities.

However, the financial burden raises concerns about affordability and fairness, especially if residents must pay around 12,000 NOK per year in tolls.

While many believe the project should be halted, doing so would likely prevent further state funding and leave incomplete infrastructure with limited impact.

We believe the project should be completed despite increased costs, as stopping now would be the worst possible outcome.

Politicians must now take responsibility and reach compromises to fairly distribute costs.

Suggestions include:

• Keeping tolls at current levels
• Introducing fuel taxes
• Charging tolls for electric vehicles
• Delaying remaining projects to reduce interest costs

The total cost may exceed 4 billion NOK. Expecting a small city to cover two-thirds of this through tolls could negatively impact population and business growth.

This project will affect residents financially, but completing it is necessary for meaningful long-term development in Harstad.