A major hotel chain backed by the slimmest possible majority of local politicians won last week’s battle over control of the North Cape. The war is far from over, however, after heated debate over land rights has polarized the local community.
“The people are split,” declared Kjell Walter Sivertsen of the Labour Party after the local governing council (Nordkapp kommunestyre) voted 10-9 against postponing action on a new area plan for the North Cape. That clears the way for implementation of the plan that would allow Scandic Hotels and real estate investing firm Rica Eiendom to retain an exclusive and highly controversial right to operate the infrastructure that’s mostly geared towards tourists.
The battle lines were drawn when Rica Eiendom leased the North Cape’s large mountain plateau 25 years ago, first from the state and then from the public landownership agency Finnmarkseiendommen and its administrator FeFo. Both were established when land rights were transferred in accordance with a new law governing land in Norway’s northern county of Finnmark.
‘Cheap’ lease rate
Rica’s annual lease rate amounted to just NOK 80,000 (USD 9,400) last year, which Rica and Scandic officials conceded to newspaper Dagens Næringsliv (DN) is “cheap.” The lease was up for renegotiation last December but FeFo extended it for another year, pending debate over the area plan for the North Cape that’s under local jurisdiction.
After Rica sold its former Rica Hotels chain to Scandic, it has subleased the North Cape to Scandic as operator. That has entitled Scandic to charge entry fees to the entire North Cape (currently NOK 285 per adult) and operate both the visitor center and all catering and parking facilities. The North Cape is Norway’s third-most-visited tourist attraction, with around 300,000 visitors every year thus generating around NOK 50 million for Scandic.
That’s what has long angered other players in the visitor industry, most recently the Hurtigruten coastal voyage line, hotel investors Olav Thon and Petter Stordalen, and the national tourism employers’ organization Virke. They claim Scandic has secured itself a monopoly that hinders competition, defies open market principles and amounts to privatization of public land. Stordalen told DN that local leaders “are giving away a money machine.”
Scandic prepared to pay more
FeFo announced late last year that it had warned “a large increase” in what up to now has been a “modest” lease rate. Svein Arild Steen-Mevold, who heads Scandic in Norway, told DN earlier this month that Scandic expects a “considerably more expensive” leasing agreement than it has now. That means it may not remain quite the “money machine” Stordalen has criticized.
Local leaders of the Nordkapp community also want more revenues from North Cape operations. Nordkapp municipality currently doesn’t receive any set portion of the roughly NOK 50 million in admission ticket revenue that Scandic collects from tourists. Scandic has proposed setting up a fund and donating NOK 5 million a year to it “for measures that will strengthen the North Cape and preserve the unique tourist attraction that it is.” Stordalen dismisses that as “small change.”
Nordkapp politicians led by the Labour Party have defended the arrangement with Rica and Scandic, even though Labour usually opposes privatization of public assets or operations. While acknowledging that the issue had deeply split the local population, Labour’s group leader Sivertsen noted at last week’s boisterous council meeting on the issue that “we must live together” and that the community “owes predictability” to the businesses operating the North Cape. He also points to the jobs Rica and Scandic have created over the years, which Scandic also notes provide tax revenue to Nordkapp.
Applause for the opposition
Local politicians from the Conservative Party, which often supports privatization, voted against the area plan and its proposal to rezone the North Cape for private operations. “The Conservatives listen to folks,” claimed the party’s representative on the council, Tarald Nikolaisen. DN reported that he was met by applause when he argued that postponing action on the plan would allow more “listening” and reunify the community.
The applause seemed to upset Mayor Kristina Hansen of Labour who threatened to send spectators out of the room after calling for order. Her vote secured the 10-9 majority that won the battle at hand: “We think this is the best solution for the Nordkapp community,” she told news bureau NTB.
The vote has by no means halted legal challenges to the plan. Hurtigruten has already complained to the European Fair Trade Association’s Surveillance Authority (ESA), with which Norway must comply through its trade agreement with the EU. Any expropriation of the land is also subject to legal challenges, and this week, the national organization Virke requested a meeting with both the trade- and environment ministers in Norway’s conservative state government coalition.
“The monopolization of the North Cape, where a single commercial player is given exclusive rights to operate one of the country’s most important natural attractions illustrates the need for an overriding national plan that secures good management and ensures our national values,” Virke wrote in its letter to Trade Minister Torbjørn Røe Isaksen of the Conservative Party and Environment Minister Ola Elvestuen of the Liberal Party. The state doesn’t seem to have much if any say over the North Cape itself, however, since it was turned over to Finnmark.