15 Administrative and economic consequences

15.1 Introduction

The purpose of the present report is to give an overall assessment of the Svalbard community, and in this connection to view the environment, mining and other economic activities, foreign policy, and other relevant factors as a coherent whole. The report also prepares the way for the introduction of local democracy in Longyearbyen.

In the present report, the Government has stated that transfers to Svalbard ought not to increase beyond their present level, and that it is an objective to reduce them in the longer term, cf. section 2.3.4 Public finances. This accords with the targets laid down in Report No. 50 (1990-91) to the Storting on economic measures for Svalbard. The Government nevertheless wishes to point out that subsequent decisions, among other things to start an exploration drift in Svea Nord, will require increased grants to Svalbard during a transitional phase. Future appropriation needs will be assessed in connection with the annual budget deliberations.

15.2 The introduction of local democracy in Longyearbyen

The introduction of local democracy in Longyearbyen will have both administrative and economic consequences - at both central and local government level.

Administratively, the introduction of local democracy will entail a considerable extension of the powers and duties of the Svalbard Council, which at the same time will change its name to the Longyearbyen Community Council.

For the Svalbard Council/the Longyearbyen Community Council, the immediate consequence will be that the Community Council takes over ownership of and responsibility for Svalbard Samfunnsdrift AS. The details of the future organization of the corporation still need to be clarified. The Community Council will also have other tasks transferred to it, among other things from the Governor of Svalbard.

Although in all essentials this is a question of taking over responsibilities and duties, it will entail a need for increased grants during a transitional and introductory phase.

One result of the introduction of local government in Longyearbyen is that two administrative bodies will have competence and authority in a number of fields. Although certain "municipal tasks" are being transferred from the Governor of Svalbard to the Community Council in Longyearbyen as far as affairs in Longyearbyen are concerned, the Governor will have to retain competence and authority in the same fields in respect of the other areas and settlements on Svalbard. There will be some economies in these fields for the Governor's office, since the number of matters to be dealt with will be reduced, but a linear reduction cannot be expected. The Governor of Svalbard will also have to undertake certain new tasks in connection with supervision of Longyearbyen Community Council.

15.3 Norwegian coal mining

According to Store Norske Spitsbergen Kulkompani AS (Store Norske) the total costs of coal mining operations, including exploration and the extension of Svea Nord, will amount to about NOK 415 million in the period 1999-2002. In the revised national budget for 1999, NOK 30 million was allocated for an exploration drift. For 2000, a total appropriation of NOK 126 million has been proposed for Store Norske, of which NOK 60 million is for the operation of the coal mines at Longyearbyen and Svea, and NOK 66 million is for the Svea Nord project. The total costs of the Svea Nord project have been estimated at some NOK 290 million for the period 1998-2002. The Government will return to the question of appropriations for subsequent years in connection with the annual government budgets; see also section 7.4.1 Norwegian coal mining operations. The Government has not yet taken any decision on operations at Svea Nord after 2002. Regular operations at Svea Nord will be considered when the results of the exploration drift have become available. The Government will in this connection attach considerable importance to the environmental consequences, the economic foundations (assuming no grant from 2003 on), any changes in settlements, and the possibilities of alternative activities.

If coal mining operations are closed down at any time, this will give rise to an immediate need for transfers. As mentioned in Proposition No. 67 (1998-99) to the Storting concerning changed priorities and supplementary appropriations in the government budget for 1999, Store Norske has estimated the total costs of winding up at NOK 286 million. The estimate is a rough one, and depends among other things on which environmental measures will be required.

15.4 Other measures

In so far as the other measures envisaged by the Government in the present report require financial expenditure, they will be included in the regular budgetary processes.

This will apply, for instance, to the proposal to regard postal and telecom services for Svalbard as vital community services. The proposal entails meeting the extra expenses incurred by Telenor AS and Norway Post BA by treating them as state purchases of services.

The Ministry of Justice and the Police

t i l r å r :

the Recommendation from the Ministry of Justice concerning Svalbard dated 29 October 1999 be submitted to the Storting.