Scandinavian Economics

The Norwegian government and mining company LKAB disagree on the usefulness of an upgrade of the Ofoten railway in the north

LKAB is the main "tenant" of the ore railway Malmbanan, which runs from Narvik on the Atlantic coast of Norway to Luleå on the Baltic coast of Sweden. LKAB wants to cut its costs, and one of the ways to do that is to use bigger ore cars and longer trains for the shipment to the harbour in Narvik. This entails upgrading the railway from the mines to Narvik, and LKAB has told the Norwegian government why Jernbaneverket, the government-owned railway administration, should foot the bill of 180 million Norwegian crowns.

Without an upgrade, there will be no room for any more Arctic Rail Express freights to Oslo, Europe, Finland or Russia, LKAB threatens. "Important investments for the entire region will be cancelled" and "an upgraded railway is a precondition of the vision of Narvik being a logistics centre", LKAB writes to the government.

But the government is unimpressed. Jernbaneverket, the government authority in charge of railways, says it is misleading to say that axle loads of 30 metric tonnes are needed to achieve the economies LKAB needs. Malmbanan (the Ore Railway) is not used to its full capacity as LKAB says.

Embarassingly for Jernbaneverket, they were part of the task force which came up with the recommendations LKAB is basing its claims on. Jernbaneverket says its about-face comes from not having access to information on actual logistics and costs.

Jernbaneverket says it wants to co-operate with LKAB and upgrade the railway. But it is essential that the railway's flexibility is maintained. The freights must stop at sidings and let passenger trains pass.