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ENERGY

How a new energy tax could impact public spending in Oslo and Bergen 

A new energy tax proposed by the Norwegian government could significantly reduce the public spending powers of the city councils in Oslo and Bergen.

Published: 30 September 2022 11:29 CEST
Pictured is Bergen's famous UNESCO listed harbour.
public spending in Oslo and Bergen could be hampered by a new tax proposed by the governemnt. Pictured is Bergen's famous UNESCO listed harbour. Photo by Xiaoyang Ou on Unsplash

Earlier this week, the government unveiled plans for new taxes on fish farming and energy production. The basic interest tax on hydropower will be increased from 37 to 45 per cent if proposals are given the green light by parliament.

“The community needs greater income in the coming years so that we can together protect good welfare for all. After many years of increased inequality, it is absolutely necessary that those who have the most, and in many cases have received significantly more in recent years, contribute more,” Prime Minister Jonas Gahr Støre said at a press conference. 

Bergen and Oslo may lose out on income as a new energy tax will hit the bottom lines of electricity companies owned by local authorities in Oslo and Bergen. In turn, this may affect the municipal budgets of both cities. 

Power firm Eviny estimates that it will have to pay an extra 2.5 billion kroner in tax in 2022 due to the government’s proposal for a tax increase for farming companies and electricity companies, Bergensavisen reports. Bergen Municipality holds 37.75 percent stake in Eviny. 

“We have no idea the extent of these changes yet, but we must expect the yield to be reduced. The uncertainty is a disturbing element in our budget planning,” Per-Arne Larsen, finance councillor with Bergen Municipality, told Bergenavisen. 

In Oslo, the city council could feel the squeeze of the tax rule even more than in Bergen, as Oslo Municipality owns energy firm Hafslund in full. 

Oslo City Council depends on its energy firm’s income to fund public spending. Finance councillor Einar Wilhelmsen told newspaper Avisa Oslo that if the proposed tax increase goes through, the municipality would need to rip up its budget for 2023 and start over. 

Next week will see the state budget for 2023 announced. Municipalities will be waiting to see how much the government is willing to allocate to local authorities- as this may offset losses from the new energy tax. 

READ ALSO: How much money do I need to live in Bergen?

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OSLO

Potential bankruptcy threatens bus services in Oslo 

The strained finances of bus provider Unibuss could cause chaos for Oslo’s bus network if the company folds. 

Published: 24 April 2024 12:08 CEST
Potential bankruptcy threatens bus services in Oslo 

Unibuss, which is wholly owned by Oslo Municipality, is in danger of going bust due to large losses, unpaid bills, and fines from public transport firm Ruter for issues with its electric bus fleet this winter. 

Oslo City Council will hold an emergency meeting headed up by transport councilor Marit Vea on Wednesday, where she will be grilled on how the council will avert a collapse in the city’s public transport network should Unibuss go bankrupt. 

Unibuss is comprised of four smaller companies that operate bus routes in Oslo on behalf of Ruter. The company has just over 370 buses in operation and covers around 60 to 70 percent of the routes in Oslo and the neighboring municipality of Bærum. 

Oslo’s fleet of electric busses struggled especially with snow and cold temperatures this winter, which caused frequent chaos across the capital’s public transport network. 

Snow, ice, range and charging issues for the busses lead to vehicle shortages which caused mass delays and cancellations several times over the winter. 

Ruter, which is also part owned by Oslo municipality, believes that the financial problems facing Unibuss mean the company could be forced to file for bankruptcy or undergo a major restructuring, according to a memo obtained by publication Teknisk Ukeblad.  

It has previously told public broadcaster that it was working on a plan in case Unibuss goes bankrupt. 

“There is no doubt that the first days of such a scenario will be very demanding for the residents of Oslo and parts of Akershus,” Ruter’s communications director Elisabeth Skarsbø Moen told public broadcaster NRK.  

“First and foremost, we are working to find a solution together with Unibuss that does not affect Ruter’s customers,” she said. 

“But as those responsible for public transport, we have both a plan and an emergency organization ready to also handle a bankruptcy,” Skarsbø Moen added. 

Should Unibuss go bankrupt, its buses would become part of the bankruptcy estate and if such an event were to occur while passengers were in transit, all passengers would need to disembark at the next stop so the buses can be transported to the depot. 

Ruter said it had an eye on the market to try and see what could be available in terms of extra buses and equipment. 

It said that its priority would be to ensure that school transport, and that healthcare workers could get to work, in the event of a sudden lack of buses. 

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