Terror repair costs double

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Clean-up and repair costs following last summer’s terrorist attacks in Oslo have more than doubled from the initial estimates made last fall. As the government rolled out its revised state budget on Tuesday, officials were already facing billions worth of unwanted bills.

Damage like this inside the Justice Ministry is costing much more than expected to clean up, even before long-term repair and reconstruction costs set in. PHOTO: Justice Ministry

“This just shows what enormous damage resulted from the attacks, what consequences it has for the state and how much money it’s going to take to repair,” Rigmor Aasrud, the government minister in charge of renewal and administration, told newspaper Aftenposten.

The government initially thought the cost of clearing the rubble, immediate repairs, new temporary offices for all the ministries hit by the bombing of July 22 and increased security in the area around the government complex downtown would amount to around NOK 590 million.

Now that’s been increased by another NOK 770 million, to a current total of NOK 1.45 billion (around USD 26 million). “It’s a huge cost,” Aasrud said. “There are a lot of other things we could have used that much money for.” She also warned the costs can keep rising.

The increase is blamed on expensive clean-up measures that have taken much longer than expected. Discovery of asbestos inside the buildings, for example, meant that every single page of recovered documents needed to be carefully vacuumed of all dust, and safety measures have been expensive and extensive as well.

The need to move several ministries into new quarters has also been expensive, at least NOK 133 million in unexpected leasing costs so far. The need to more than double the budget comes even before plans are laid for reconstruction of the area. That will cost billions more.

Economy strong, budget restrained
Finance Sigbjørn Johnsen, meanwhile, could report that Norway’s economy remains strong as he unveiled the state’s revised budget through the rest of the year. The state has collected far more taxes and fees than expected, but Johnsen nonetheless claimed it was necessary to cut back on spending.

He delivered a revised state budget that calls for using NOK 16 billion less of the oil revenues Norway could use under generally accepted spending rules. That’s NOK 6 billion less than originally budgeted, because of the boost in tax and fee revenue, and the total will amount to 3.5 percent of the size of Norway’s oil fund. Johnsen could have used up to 4 percent of the fund under Norway’s so-called handlingsregelen, the rule that governs use of oil revenues.

“It’s naturally tempting to spend more money,” Johnsen told Norwegian Broadcasting (NRK). He said that other economic factors affecting inflation and the strength of the Norwegian currency meant that it was wisest to avoid the temptation.

The bottom line seems to be that Norway has so much money it literally can’t spend it all, even though demands continue for better roads, better schools and better health care. Government officials are allocating more funding in the transport sector and Health Minister Anne-Grethe Strøm-Erichsen could present funds for a few new projects that meet demands, for example, for reconstructive breast surgery after cancer operations and continued use of Aker Hospital.

Views and News from Norway/Nina Berglund

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