New Report Provides a More Nuanced View of Hordfast’s Socio-Economic Impacts

The proposed Hordfast development project between Bergen and Stord shows only slightly negative net benefits in the Norwegian Public Roads Administration’s revised cost-benefit analysis. Previous assessments of the project have produced highly varying estimates of net benefits. Nevertheless, Hordfast lobbyists have claimed that the project will deliver enormous gains.

In a new project, Vista Analyse, represented by Rasmus Bøgh Holmen and Tor Homleid, shows that the benefits included in the impact analysis are overestimated, and that those not included are insufficient to make the project socio-economically profitable.

– For many years, the Hordfast lobby has spent millions of kroner promoting one-sided claims about the project’s benefits, based on shaky professional foundations. Furthermore, the Norwegian Public Roads Administration has published assessments with diverging results about the project over time. We are pleased to have had the opportunity to scrutinize some of the professional claims made about the project and, in doing so, nuance parts of the picture that have been painted, says Holmen.

At the same time, he takes the opportunity to thank the Norwegian Society for the Conservation of Nature and the Norwegian Environmental Protection Association for a professionally interesting assignment.

Traffic Forecasts and User Benefits are Likely Overstated

There is a high probability that the traffic basis for Hordfast is overestimated in the calculations of the Norwegian Public Roads Administration. Regarding overall traffic growth, the agency assumes that freight transport will increase more than GDP, and that relatively lower per-kilometer costs for electric cars will contribute to substantial traffic growth.

If one instead relies more heavily on the agency’s own traffic forecasts, user benefits are reduced by 25 to 35 percent. After we correct for a number of unrealistic assumptions about Hordfast’s traffic basis and somewhat optimistic travel-time savings, user benefits are roughly halved. It then becomes clear that the project is a socio-economic loss.

It is also unrealistic to expect a toll contribution of 15 billion kroner, as claimed by the project’s lobbying organization – Stavanger2Bergen. Toll collection on the stretch contributes positively to the project’s socio-economic profitability if the average toll rate for light vehicles is below NOK 230 per passage. This corresponds to NOK 6 billion in our own calculations and NOK 10 billion based on our interpretation of the Norwegian Public Roads Administration’s calculations.

Claims about Wider Economic Impacts Lack Empirical Support

The road project may lead to some increase in commuting, but long travel times, tolls, and the regional industrial structure limit the potential for commuting specifically and for labor market integration more generally. There is no professional basis for claiming that the project will lead to substantial regional population growth or major non-monetized benefits that would render the project socio-economically profitable. On the contrary, existing research literature and available regional evidence point to modest to moderate effects.

The lobby’s portrayal of the project as decisive for Western Norway’s future competitiveness lacks a professional foundation, given the relatively limited empirical evidence for substantial benefits beyond direct transport utility. Wider impacts in the form of productivity gains have shown weak empirical support in a Norwegian context.

The research literature on the effects of freight transport does not indicate major gains beyond direct transport utility, and points instead to unclear geographical distributional effects. Trucking industry associations are not pushing for the project, and Western Norway already has well-established alternative transport routes by sea and air. Business travelers already enjoy good connections between Bergen and Stavanger, while two fjord crossings by ferry in scenic surroundings are hardly what hampers tourism in Western Norway.

The most likely outcome is some regional redistribution effects, with modest centralization of economic activity, possibly some population growth in the northern parts of Sunnhordland, and otherwise unpredictable consequences for surrounding areas. Whichever way one looks at it, there is no professional basis for claiming that Hordfast will bring more than small to moderate local spillover effects for the economy of Sunnhordland and Western Norway more broadly.

For Further Information

The report is available here (in Norwegian only). Inquiries regarding Hordfast’s traffic basis, user benefits, and tolls may be directed to Homleid, while inquiries regarding the project’s wider impacts may be directed to Holmen.