Norway Is Inviting Competition for Hurtigruten’s Coastal Service

The Norwegian Ministry of Transportation and Communication is inviting companies to compete for the transportation service and subsidy currently enjoyed by Hurtigruten.

Providing 24/7 cargo and passenger service to 34 ports between Bergen and Kirkenes, Hurtigruten operates 11 vessels along the Norwegian coast.

Operating the service since 1893, Hurtigruten receives a Norwegian subsidy to operate the service. However, the European Free Trade Association’s (EFTA) Surveillance Authority (ESA), has allegedly challenged the subsidy arrangement as preventing competition, according to Norwegian press reports. Some interests in Norway also argue that Hurtigruten benefits from a monopoly situation along the coast and that users would be better served with a more competitive offering.

The ESA has previously approved a $600 million subsidy amount for the period from 2012 through 2019. EFTA permits government compensation for public services not otherwise provided – such as the Bergen-Kirkenes coastal route also including communities that have no road or air access.

Hurtigruten is contracted until Dec. 31, 2019 with a one-year extension option under the current contract.

The Norwegian government has outlined a scenario whereby three different companies would operate the coastal service. But it is unclear how the government envisions the operation and coordination of three companies and their ships, or how they can build or acquire ships for the service in the next two to three years.

The deadline for bids is Jan. 3, 2018.

Hurtigruten is expected to be among the companies submitting bids for the new contract which will run from Jan. 1 2021 through December 31, 2031.

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