Future Trends - The Baltic Sea Region INTERREG III B
Future Trends - The Baltic Sea Region INTERREG III B
Future Trends - The Baltic Sea Region INTERREG III B
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STBR publications 15/2005<br />
Road Transport Corridors Study:<br />
<strong>Future</strong> <strong>Trends</strong><br />
Project part-financed by the European Union
STBR – Sustainable Transport in the Barents <strong>Region</strong><br />
Road Corridors,<br />
<strong>Future</strong> trends of the Barents region<br />
Project part-financed by the European Union 14/10/2005
2<br />
Table of Contents:<br />
1. Introduction .................................................................................................................... 5<br />
PART I: GEOGRAPHICAL PERSPECTIVE................................................................ 7<br />
2. Focal areas of the business sector in the Barents <strong>Region</strong>............................................ 8<br />
2.1 Northern Norway – Finnmark, Troms and Nordland................................................. 8<br />
2.1.1 Business sector trends in northern Norway......................................................... 8<br />
2.1.2 <strong>The</strong> impact of trends in the business sector in northern Norway on transport<br />
in the Barents <strong>Region</strong> ................................................................................................. 10<br />
2.2 Northern Sweden - Norrbotten and Västerbotten..................................................... 10<br />
2.2.1 Business sector trends in northern Sweden ....................................................... 10<br />
2.2.2 <strong>The</strong> impact of business trends in northern Sweden on transportation in the<br />
Barents region............................................................................................................. 13<br />
2.3 North-western Russia – Murmansk, Arkhangelsk and Karelia................................ 13<br />
2.3.1 Business trends in north-western Russia ........................................................... 13<br />
2.3.2 <strong>The</strong> impact of business trends in north-western Russia on transportation in<br />
the Barents <strong>Region</strong> ..................................................................................................... 15<br />
2.4 Northern Finland – Lapland, Northern Ostrobothnia and Kainuu ........................... 16<br />
2.4.1 Business trends in northern Finland .................................................................. 16<br />
2.4.2 <strong>The</strong> impact of business trends in northern Finland on transportation in the<br />
Barents <strong>Region</strong> ........................................................................................................... 19<br />
3. <strong>Region</strong>al transport subsidies in Finland, Sweden and Norway as a factor<br />
influencing traffic streams in the region.................................................................... 19<br />
3.1 General ..................................................................................................................... 19<br />
3.2 Current situation ....................................................................................................... 20<br />
3.2.1 Finland............................................................................................................... 20<br />
3.2.2 Sweden .............................................................................................................. 20<br />
3.2.3 Norway .............................................................................................................. 21<br />
3.3 <strong>Future</strong> prospects and possibilities............................................................................. 22<br />
3.3.1 Finland............................................................................................................... 22<br />
3.3.2 Sweden .............................................................................................................. 22<br />
3.3.3 Norway .............................................................................................................. 23<br />
3.4 <strong>The</strong> impact of possible changes in transportation subsidies on traffic streams<br />
within the entire Barents <strong>Region</strong> .................................................................................... 23<br />
4. <strong>The</strong> current situation and future of goods transport fees in Finland, Sweden and<br />
Norway - the impact on traffic streams in the Barents <strong>Region</strong>? ............................. 24<br />
4.1 General ..................................................................................................................... 24<br />
4.2 Current situation ....................................................................................................... 24<br />
4.2.1 Road transport ................................................................................................... 24<br />
4.2.2 Rail transport ..................................................................................................... 25<br />
4.2.3 Transport by water............................................................................................. 26<br />
4.3 <strong>Future</strong> prospects........................................................................................................ 26<br />
4.3.1 EU’s general transportation policy lines ........................................................... 26<br />
4.3.2 Road transport ................................................................................................... 27<br />
4.3.3 Rail transport ..................................................................................................... 28<br />
4.3.4 Transport by water............................................................................................. 28<br />
4.3.5 <strong>The</strong> impact of infrastructure fees on goods traffic ............................................ 29
3<br />
4.4 <strong>The</strong> impact of possible changes in goods traffic fees on traffic streams within<br />
the entire Barents <strong>Region</strong> ............................................................................................... 29<br />
5. Population structure and development prospects ..................................................... 30<br />
5.1. Population structure in the future ............................................................................ 30<br />
5.2. Population growth calls for jobs.............................................................................. 31<br />
5.3. Business prospects................................................................................................... 32<br />
PART II: THE CLUSTER PERSPECTIVE ................................................................. 33<br />
6. Development of the Barents <strong>Region</strong> from the Cluster Perspective.......................... 34<br />
6.1 Oil and gas industry.................................................................................................. 34<br />
6.1.1 <strong>The</strong> oil and gas cluster within the regional perspective .................................... 34<br />
6.1.2 Current situation and prospects in the Barents <strong>Region</strong> ..................................... 34<br />
6.1.3 Potential............................................................................................................. 35<br />
6.1.4 Impacts on traffic in the Barents <strong>Region</strong>........................................................... 36<br />
6.2 Fish industry ............................................................................................................. 37<br />
6.2.1 Global trends ..................................................................................................... 37<br />
6.2.2 Current situation and prospects in the Barents <strong>Region</strong> ..................................... 37<br />
6.2.3 Potential............................................................................................................. 37<br />
6.2.4 Impacts on traffic in the Barents <strong>Region</strong>........................................................... 38<br />
6.3 Testing – a growing branch of industry in the Barents <strong>Region</strong>................................ 39<br />
6.3.1 Global trends ..................................................................................................... 39<br />
6.3.2 Current situation in the Barents <strong>Region</strong> ............................................................ 39<br />
6.3.3 <strong>Future</strong> prospects................................................................................................. 40<br />
6.3.4 Potential............................................................................................................. 41<br />
6.3.5 Impacts on traffic in the Barents <strong>Region</strong>........................................................... 41<br />
6.4 Major sports events .................................................................................................. 42<br />
6.4.1 Global trends ..................................................................................................... 42<br />
6.4.2 Current situation ................................................................................................ 42<br />
6.4.3 <strong>Future</strong> prospects................................................................................................. 43<br />
6.4.4 Possibilities........................................................................................................ 43<br />
6.4.5 Impacts on traffic............................................................................................... 43<br />
Case 1 Arctic Ocean Race 2008................................................................................. 44<br />
6.5 Competence centres – strengthening and maintaining regional structure................ 44<br />
6.5.1 Global trends ..................................................................................................... 44<br />
6.5.2 Current situation in the Barents <strong>Region</strong> ............................................................ 45<br />
6.5.3 <strong>Future</strong> prospects................................................................................................. 45<br />
6.5.4 Potential............................................................................................................. 46<br />
6.5.5 Impacts on traffic in the Barents <strong>Region</strong>........................................................... 46<br />
6.6 Large retail units....................................................................................................... 47<br />
6.6.1 Global trends..................................................................................................... 47<br />
6.6.2 Current situation in the Barents region ............................................................ 48<br />
6.6.3 <strong>Future</strong> prospects................................................................................................ 48<br />
6.6.4 Impacts on traffic in the Barents <strong>Region</strong>........................................................... 49<br />
6.7 Tourism .................................................................................................................... 49<br />
6.7.1 Global trends ..................................................................................................... 49<br />
6.7.2 Current situation in the Barents region.............................................................. 50<br />
6.7.3 Potential............................................................................................................. 50<br />
6.7.3 Impacts on traffic in the Barents <strong>Region</strong>........................................................... 51<br />
Case 1 Touring bus travel system (Adventure bus travel).......................................... 51<br />
6.8 Mining industry ........................................................................................................ 51
4<br />
6.8.1 General trends.................................................................................................... 51<br />
6.8.2 Current situation in the Barents region.............................................................. 52<br />
6.8.3 Prospects............................................................................................................ 53<br />
6.8.4 Potential............................................................................................................. 53<br />
6.8.5 <strong>The</strong> effect on the traffic of Barents region ........................................................ 53<br />
Case 1 Talvivaara´s nickel mine in Sotkamo (Kaleva 2005-08-19)........................... 54<br />
6.9 Forest and wood industry ......................................................................................... 55<br />
6.9.1 Global trends ..................................................................................................... 55<br />
6.9.2 Current situation and future prospects in Barents region .................................. 55<br />
6.9.3 Potential............................................................................................................. 56<br />
6.9.3 Impacts on traffic in the Barents <strong>Region</strong>........................................................... 57<br />
6.10 Summary of impacts on transport sector................................................................ 58<br />
7. Research and development projects in the Barents <strong>Region</strong> ..................................... 60<br />
7.1. Organisations taking part......................................................................................... 60<br />
7.1.1 EU programme work ......................................................................................... 60<br />
7.1.2 Organisations taking part in project coordination ............................................. 62<br />
7.2. Completed and ongoing surveys and projects related to road traffic development 63<br />
7.2.1 General .............................................................................................................. 63<br />
7.2.2 Corridor and leg surveys ................................................................................... 64<br />
7.2.3 Surveys aimed at supporting tourism development .......................................... 66<br />
7.2.4 Traffic safety projects........................................................................................ 67<br />
7.2.5 Logistics surveys ............................................................................................... 68<br />
7.2.6 Administrative and road technology cooperation.............................................. 69<br />
8. New project ideas.......................................................................................................... 71<br />
References ......................................................................................................................... 74
5<br />
1. Introduction<br />
<strong>The</strong> Barents <strong>Region</strong> consists of twelve regions located in four different countries. Each<br />
country and region has its own plans and visions for the future. However, the regions are<br />
in close interaction with each other, and changes taking place in one region may have an<br />
impact of development trends in all neighbouring areas.<br />
In this report, the future of the Barents <strong>Region</strong> is approached from two different perspectives:<br />
1. <strong>The</strong> geographical perspective<br />
2. <strong>The</strong> cluster perspective<br />
<strong>The</strong> geographical perspective emphasises country- and region-specific plans and trends.<br />
<strong>The</strong> cluster perspective, on the other hand, views operation within the entire Barents <strong>Region</strong><br />
from the viewpoint of a specific branch of industry. Of these two, the geographical<br />
perspective is probably the more realistic one, while the cluster perspective takes better<br />
into account the Barents <strong>Region</strong> as a single area to be developed. It is hoped that the use<br />
of different perspectives will give rise to different ideas on development targets in the region.<br />
Developments and trends in a variety of areas have an impact on the development of the<br />
Barents <strong>Region</strong>. It is in the best interest of all countries in the Barents <strong>Region</strong> to keep the<br />
northern areas inhabited. Political decisions play a major role in the development of business<br />
and viability in these remote areas. Political decisions may again be affected by geopolitical<br />
events and the economic state of the countries, global economic trends, prevailing<br />
attitudes and values etc. It is of course possible for business in the Barents <strong>Region</strong> to go<br />
ahead at full speed even without a positive political climate, but that calls for more economic<br />
investments and risk-taking on the part of the private sector.<br />
<strong>The</strong> geographical perspective focuses on trends in the following areas, their impact on the<br />
transport sector and development in other areas:<br />
1. <strong>The</strong> business sector<br />
2. Legislation and regional subsidies<br />
3. <strong>Region</strong>al structure and planning<br />
Within the cluster perspective, the following entities and their development prospects are<br />
studied:<br />
1. Oil and gas industry<br />
2. Fish industry<br />
3. Tourism<br />
4. Forest and wood industry<br />
5. Mining industry<br />
6. Service sector/large retail units<br />
7. Testing<br />
8. Sports events<br />
9. Culture
6<br />
<strong>The</strong> report is based on existing literature and combination of data from available sources.
7<br />
PART I: GEOGRAPHICAL PERSPECTIVE
8<br />
2. Focal areas of the business sector in the Barents <strong>Region</strong><br />
2.1 Northern Norway – Finnmark, Troms and Nordland<br />
Natural resources make up the foundation of the business sector in northern Norway.<br />
However, major changes within the regional, national and international framework pose a<br />
great challenge for traditional industries based on natural resources, such as fishing, in<br />
terms of job security and growth. A global economy, increased competition etc. are the<br />
force behind these changes.<br />
2.1.1 Business sector trends in northern Norway<br />
Fishing is, and will continue to be a major industry in northern Norway, despite the fact<br />
that its significance has steadily declined. Three quarters of the total value of fishing production<br />
in Norway comes from the north. Only 10 per cent of Norway’s inhabitants live in<br />
the north, but half of the country’s registered fishermen are based there. Between 1990<br />
and 2002, the number of fishermen in the north declined from 13,500 to about 9,000.<br />
(Utenriksdepartementet, 2003). Most of the fish caught in Norway is exported to the EU,<br />
and the globalisation of trade has increased competition in these areas significantly. In<br />
addition, the high exchange rate of the Norwegian krone and high wage costs compared to<br />
other countries have created obstacles for Norwegian fish in the international market.<br />
Norwegian fish products are also subject to trade restrictions, particularly in EU member<br />
states.<br />
At the moment, the fastest growing market for Norwegian fish products is Russia; measured<br />
in tons, the volume of exports increased by nearly 60% between 1999 and 2003.<br />
However, as a whole, statistics from 2000-2003 show a declining trend; the value of total<br />
exports shrank by nearly one tenth during the period in question. (SSB, 2004) Fish farming<br />
was expected to provide a boost for employment and production in coastal regions in<br />
the north, but so far the expectations have only been fulfilled to a certain point. <strong>The</strong> reasons<br />
for this include overproduction, diseases and accusations of price dumping. Fish<br />
farming is however an area that is heavily invested in.<br />
Reindeer husbandry is of great importance for the Sámi population of Norway economically,<br />
in terms of employment, culturally and socially. Problems in this field include<br />
changes due to construction of roads, gas pipelines, power lines etc. as well as the increase<br />
in the number of predators. In addition, as a result of the EEC agreement e.g. the transportation<br />
costs of animals to be slaughtered have increased, because the regulations make it<br />
harder for small abattoirs to carry on their operation. Particularly the coastal areas of<br />
Finnmark, where significant industrial and tourism plans etc. are currently being made, are<br />
of great importance for reindeer husbandry. (Arctic Council, 2002) This conflict may pose<br />
a problem in the future.<br />
Tourism is an important branch of industry in northern Norway as well, in terms of employment<br />
and production value alike. <strong>The</strong>re was considerable growth in this field in the
9<br />
1980s and ‘90s, but in the past few years growth has more or less stagnated. Reasons for<br />
this include long distance from intended markets and Norway’s high price level. In addition,<br />
there has been a lack of strong, long-term social planning in Norway aimed at improving<br />
the industry, such as investing in strategic infrastructure and developing various<br />
activities and interesting experiences for tourists. (Utenriksdepartementet, 2003) In the<br />
province of Troms, the development of the Senja tourism road has been brought forward,<br />
with the infrastructure improvements it necessitates. Other fairly extensive individual tourism<br />
projects are already under way, such as sea tourism centre that is being planned in<br />
Storfjord 1 , which is seen as having an equally important role as Lofoten and North Cape in<br />
the future. Another example are the tourism, hotel and cinema centre plans for Kautokeino.<br />
2<br />
<strong>The</strong> Lofoten-Barents <strong>Sea</strong> areas were opened for oil and gas exploration in the early 1980s,<br />
and major finds, mostly gas, have been made. (Olje- og energidepartementet, 2003) Large<br />
finds are also expected to be made in the disputed sea border area between Norway and<br />
Russia. Test drilling in ongoing in the eastern Barents <strong>Sea</strong>, but the general opinion is that<br />
Lofoten will remain out of bounds for the energy industry in the future and continue to be<br />
reserved for fishing. 3<br />
<strong>The</strong> Snøhvit gas field north of Finnmark is the only find so far where production is scheduled<br />
to begin. <strong>The</strong> production plant will be opened in autumn 2006. 4 <strong>The</strong> project has already<br />
created hundreds of new jobs, and oil and gas industry is expected to provide a<br />
strong boost for economy and the business sector in northern Norway. <strong>The</strong> construction of<br />
large industrial production plants would lead e.g. to improved infrastructure and logistic<br />
connections in sparsely populated areas, which would in itself create a more favourable<br />
setting for development in other fields.<br />
Image. Oil and gas finds in the Barents <strong>Sea</strong> (Statoil www.statoil.com)<br />
1 www.framtidinord.no 2005-06-06<br />
2 www.altaposten.no 2005-06-17<br />
3 E.g. www.framtidinord.no 2005-06-15<br />
4 www.statoil.com
10<br />
Development in other fields of refining and mining production has stagnated in recent<br />
years. However, cooperation with Russia is expected to provide a new boost to the sector,<br />
particularly mining. In addition, it is hoped that the positive development in the oil and gas<br />
sector will act as a catalyst for more extensive cooperation between the countries. (Utenriksdepartementet,<br />
2003) <strong>The</strong> belief in the potential of the mining industry is the strongest<br />
in Nordland. <strong>The</strong> province is one of the most important producers of ore and minerals in<br />
Norway. <strong>The</strong> current trend seems to be that of a switch from metal production to production<br />
of industrial minerals, because the current view is that the known ore deposits in the<br />
area only have capacity for less than ten years. <strong>The</strong>re is however a vast potential for mineral<br />
deposits in the area, and several new quarries are likely to be opened within the next<br />
few years. (Nordland fylkeskommune, 2001; 2005)<br />
2.1.2 <strong>The</strong> impact of trends in the business sector in northern Norway<br />
on transport in the Barents <strong>Region</strong><br />
- <strong>The</strong> growing oil and gas industry provides a boost to other branches; business<br />
cooperation with Russia growth of internal traffic in northern Norway, and<br />
the Norwegian-Russian axle in particular; train link between Kirkenes and<br />
Murmansk?<br />
- Fresh fish transports to Russia increase further the condition of the road<br />
network in northern Norway and north-western Russia is likely to become a<br />
major issue<br />
- Need for new transport corridors towards the south as well: the Nellim-Pasvik<br />
road connection and the Arctic Ocean coast? <strong>The</strong> volume of road transports<br />
from northern Norway and the Kola Peninsula to the south via Lapland and<br />
north-western Russia is estimated at as much as 3 million tons per year on both<br />
routes (European Commission 2005)<br />
- <strong>The</strong> volume of dangerous substance transports on roads is increased by Snöhvit<br />
and other gas/oil production plants?<br />
- <strong>The</strong> development prospects of industry and infrastructure may give rise to conflicts<br />
with reindeer husbandry and indigenous population possible delays in<br />
project implementation<br />
- Development of the tourism sector sites on the coast and inland areas of<br />
Finnmark<br />
2.2 Northern Sweden - Norrbotten and Västerbotten<br />
2.2.1 Business sector trends in northern Sweden<br />
<strong>The</strong> mining sector in Norrbotten accounts for about 40% of total production in the sector<br />
in Sweden. Large production plants include the Aitik open-face quarry and the mines in<br />
Malmberget and Kiruna. Mining will continue to play a major role in the future as well.<br />
(Länsstyrelsen i Norrbottens län, 2003; Regeringskansliet, 2004) <strong>The</strong>re are several ore
11<br />
exploration studies and expansion projects being currently implemented. For example, the<br />
expansion of the Aivik open-face quarry is being worked on 5 ; with today’s capacity, operation<br />
could continue for about 10 years, but with the expansion mining could be carried<br />
out for several decades. Surveying is also currently carried out beneath the City of Gällivare,<br />
aimed at expanding the capacity of Malmberget. 6 Wholly new avenues for mining<br />
are being explored e.g. in Jokkmokk and Arjeplog, where uranium exploration is under<br />
way. 7 Quite recently, a decision was made to invest in scientific research in the field: a socalled<br />
Nordic Rock Tech Centre, aimed at coordinating research and development projects<br />
(within the entire northern dimension as well), thus promoting development in the field<br />
has been set up in Gällivare as a joint project by firms working in the sector and Luleå<br />
University of Technology. 8<br />
<strong>The</strong>re are two large ore deposits in Västerbotten, the so-called Skelleftefältet and the new,<br />
promising find known as Guldlinjen. So far, only the resources in Skelleftefältet have been<br />
utilised, so expansion of mining plays a crucial role in terms of the province’s future prospects.<br />
Exploration projects are continuously being carried out in the ore fields; only recently,<br />
a large new ore vein was identified in the northern part of Skelleftefältet, for example.<br />
9 In addition, a new gold mine was opened recently in Svartliden, between Storuman<br />
and Lycksele. It employs about 70 persons and produces a significant amount – 2<br />
tons – of gold per year. 10 <strong>The</strong> expanding mining sector poses particularly high demands on<br />
smooth transportation, and many companies consider that the province’s poor road and<br />
railway infrastructure constitutes a hindrance to growth. (Regeringskansliet, 2004) It is<br />
hoped that the development of the mining sector jointly with the university and high-tech<br />
firms will create new high-tech companies and job opportunities in the region. (Länsstyrelsen<br />
i Västerbottens län, 2005)<br />
5 www.nsd.se 2005-06-03<br />
6 www.nsd.se 2005-04-28<br />
7 www.nsd.se 2005-04-26, 2005-04-23<br />
8 www.nsd.se 2005-04-02<br />
9 www.privataaffarer.se 2005-05-26<br />
10 www.norran.se 2005-06-17
12<br />
Image. Mines operating in northern Sweden in 2003 (Source: Sveriges geologisk undersökning<br />
www.sgu.se)<br />
<strong>The</strong> utilisation of forests and timber has long been an important industry in Norrbotten and<br />
Västerbotten, thanks to extensive forests and high-class research. In Västerbotten, the forest<br />
industry has also given rise to several leading forest technology enterprises, and mechanical<br />
wood working industry is in particular seen as a field with great future potential.<br />
In terms of practical measures, a decision was recently made to set up a research centre in<br />
Skellefteå to aid research in the field. 11 Forests as a source of energy is also seen as an<br />
important future field, particularly with regard to inland forests. It is hoped that this will<br />
even out regional differences in the degree of forest utilisation. <strong>The</strong> construction of the<br />
Norrbotniabanan railway link from Umeå to Haparanda is seen in the north as a vital<br />
measure to meet the growing transportation needs of mining and forest industry. (Länsstyrelsen<br />
i Norrbottens län, 2003; Länsstyrelsen i Västerbottens län, 2005)<br />
In the past 30 years, car and component testing in Arjeplog, Arvidsjaur, Jokkmokk, Kiruna<br />
and Älvsbyn has evolved into a significant branch of business in northern Sweden. Turnover<br />
in the field has grown in ten years by 700%, and the annual growth rate is estimated<br />
at 20-25%. An extensive new testing area was completed in Arjeplog at the end of 2004,<br />
and the airport in Arvidsjaur has been improved as requested by industry operators, e.g. by<br />
lengthening the runway. <strong>The</strong> expansion of the airport also serves the needs of tourism and<br />
transport. <strong>The</strong> future visions of vehicle testing have e.g. featured the idea of a new type of<br />
adventure driving schools, where car enthusiasts would pay for a combination of improving<br />
their driving skills and adventure tourism in northern Sweden. Train and airplane testing<br />
already under way in Kiruna and Gällivare is also seen as a target for future development.<br />
(Näringsdepartementet, 2003)<br />
Adventure tourism is a very trendy field in northern Sweden as well, and there is firm belief<br />
in its growth potential. In both northern provinces, fishing tourism in particular has<br />
gained in importance, and it is also seen as having growth potential. In Pajala, for example,<br />
an annual fishing competition and festival will be launched, aimed at attracting tourists<br />
from Sweden, Finland, Norway and Denmark. <strong>The</strong> target for the first year is 1,000<br />
overnight stays and 800 competition participants. <strong>The</strong> long-term plan includes extensive<br />
fishing tourism in the area. 12 Investment in traditional ”tourist traps” will continue; an example<br />
of this is the skiing centre in Riksgränsen, which is currently undergoing expansion.<br />
13 In recent years, however, the government’s plans of a uniform value-added tax<br />
have given rise to concern. It would entail a significant rise of the price of hotel stays and<br />
transportation of people. (Finansdepartementet, 2005) According to tourism entrepreneurs<br />
in northern Sweden, this would lead to a situation where Norrbotten is no longer able to<br />
compete with northern Norway and Finnish Lapland. 14<br />
Individual construction projects which are likely to give a major boost to tourism and<br />
other industries include the IKEA furniture store to be built in Haparanda and the Luleå<br />
Culture Centre. IKEA is expected to bring a tremendous economic boost to the entire<br />
North Calotte, attracting shoppers all the way from Norway and Russia as well. <strong>The</strong>re is<br />
11 www.norran.se 2005-05-18<br />
12 www.nsd.se 2005-02-28<br />
13 www.nsd.se 2005-06-02<br />
14 www.nsd.se 2005-04-26
13<br />
already a lot of activity in the areas adjacent to Haparanda and Tornio, eager to reap the<br />
benefits of a growing influx of visitors. 15<br />
2.2.2 <strong>The</strong> impact of business trends in northern Sweden on transportation<br />
in the Barents region<br />
…<br />
- <strong>The</strong> potential of Haparanda-Tornio increasing traffic volume on the<br />
main road running along the Bothnian Arc; improvement of the E4 leg in<br />
Sweden is likely to increase the volume of traffic coming from Finland as<br />
well; growing traffic volume on the road between Rovaniemi-Tornio<br />
- Expansion of mining and forest industry; raising the capacity of the Malmbanan<br />
railway link, a system regulating rail width at the border between<br />
Sweden and Finland the NEW corridor; a new regional transport corridor<br />
between Finland and Sweden<br />
- Norrbotniabanan increasing transportation volumes along the northsouth<br />
axle; a large-scale move from road to rail transports? A train link between<br />
Finland and Sweden for people traffic..?<br />
- With an increase in “tourism VAT”, tourists could move eastwards; this is<br />
however unlikely considering the importance of the tourism sector<br />
- Developing forest and mining industry in Västerbotten infrastructure<br />
improvements; preconditions for increased people traffic as well, crosswise<br />
traffic between Sweden and Norway (making use of Norwegian ports? See<br />
Chapter 3)<br />
- Car and component testing develops into a new type of basic industry <br />
increased air traffic in Norrbotten; inland sites are more easily accessible,<br />
good preconditions for strong growth terms of number of visitors<br />
2.3 North-western Russia – Murmansk, Arkhangelsk and Karelia<br />
2.3.1 Business trends in north-western Russia<br />
Mining accounts for about half of industrial production in the Murmansk area. <strong>The</strong>re are<br />
large reserves of chrome, titanium diamonds and rock used in building supply manufacturing<br />
in the Kola Peninsula. Investing in mining and sustainable development are seen by<br />
the regional administration as the most important target. 16 Metal industry in the region has<br />
also shown particularly brisk growth in recent years. (Lapin yliopisto, 2005)<br />
During the past ten years, fishing and fish processing, which are both significant industries<br />
for Murmansk and Arkhangelsk, have undergone major structural changes. <strong>The</strong> switch<br />
from planning economy to market economy that took place in the early 1990s as well as<br />
the continuous shortcomings in national legislation concerning the fishing industry have<br />
15 Esim. www.nsd.se 2005-06-13<br />
16 2004.murman.ru/economy/mining/
14<br />
had a great impact on the field. Fishing is down to half from its previous level, and fish<br />
processing has diminished to one fifth. <strong>The</strong>re is cooperation with Norwegian partners on<br />
regional level. It is hoped that Norwegians will e.g. be able to provide economic assistance<br />
in development as well as in fishing, fish processing and organisation of marketing. Cooperation<br />
may have other impacts as well; for instance, overproduction and high wage costs<br />
in Norway may lead to permanent transfer of jobs to Russia. Fish farming is considered a<br />
potential field of the future in north-western Russia. (Lapin yliopisto, 2005; Utenriksdepartementet,<br />
2003)<br />
Image. Ore reserves and mining operators in the Murmansk region (Murmansk region<br />
2004.murman.ru)<br />
In Russia, oil and gas production on land has been heavily invested in. New finds have<br />
been sought for in the Barents <strong>Sea</strong> since the early 1980s. Offshore drilling is about to be<br />
launched in Prirazlomnoye in the eastern Barents <strong>Sea</strong>. So far, one of the factors curbing<br />
development has been the negative attitude on the part of officials, and particularly the<br />
military, towards western investments in strategically important areas. (Utenriksdepartementet,<br />
2003) <strong>The</strong> situation is likely to undergo a radical change in the next ten years.<br />
Taking the enormous Shtokman gas field in the Russian part of the Barents <strong>Sea</strong> into use is<br />
one of the largest projects in sight, and many Norwegian firms are eager to get in on the<br />
action. However, the project has been delayed several times, and according to Russian<br />
sources operation will commence in 2015 at the earliest. 17 <strong>The</strong> gas reserves in the field<br />
total about 320 billion cubic metres, which equals all known gas reserves in Norway. 18<br />
Another important project is the construction of a new earth gas pipeline to Murmansk<br />
through Siberia. Officials and representatives of the business sector have been planning to<br />
set up special economic areas in the Murmansk area to attract investments. 19<br />
<strong>The</strong> most important branches of industry in the Arkhangelsk region and the Karelian republic<br />
are forestry, wood refining as well as pulp and paper industry. <strong>The</strong> forest reserves<br />
in the area are about four times greater compared to Finland, while logging is only 60% of<br />
the Finnish level, and most of the timber is exported. It is therefore likely that the future of<br />
the forest industry will be influenced by the planned increases in raw timber export duties.<br />
17 www.bellona.no 2005-02-04<br />
18 www.planora.fi 2005-08-09<br />
19 www.planora.fi 2005-08-09
15<br />
(Layton, 1999; Zimin, 2004) This is expected to attract companies specialising in refined<br />
wood products to the area. Today, the majority of forest industry production from the area<br />
is exported unrefined.<br />
Despite its potential (the so-called Kostamuksha phenomenon, as opposed to the China<br />
Phenomenon; i.e. prerequisites for ”globalisation in adjacent areas”), Karelia has not been<br />
seen as a particularly attractive alternative for foreign entrepreneurs. (Joensuun yliopisto,<br />
2005) Besides investments in electronics industry in Kostamuksha, there are only few examples<br />
of new industrial investment projects, such as the StoraEnso sawmill, IKEA’s furniture<br />
factory in Kostamuksha (to be completed in 2005) and the gravel plant that Lohja<br />
Rudus is planning to set up near Sordavala. <strong>The</strong> towns of Segezha and Kondopoga are<br />
also seen as promising examples. Paper mills have made sizable investments there aimed<br />
at developing social infrastructure and the living environment and to attract capital. <strong>The</strong><br />
influx of foreign investments may be speeded up by the planned forest legislation reform,<br />
which will allow renting of forests for 49 years instead of five years at a time, as is presently<br />
the case. However, there is widespread corruption within the wood refining and forest<br />
industry in Karelia, and it is largely controlled by organised crime. This is seen as being<br />
one of the biggest obstacles to further development in this sector. (Zimin, 2004)<br />
In accordance with a global trend, there are small-scale attempts to invest in tourism in<br />
north-western Russia as well. A full-scale skiing centre can already be found in Kirovsk in<br />
the Kola Peninsula. An annual ski race is arranged in Pechenga, by the Norwegian and<br />
Finnish border, with 5,000 participants from three countries. <strong>The</strong>re is also potential for<br />
growth in fishing tourism in the Kola Peninsula. 20<br />
2.3.2 <strong>The</strong> impact of business trends in north-western Russia on<br />
transportation in the Barents <strong>Region</strong><br />
20 2004.murman.ru/economy/tourism/
16<br />
…<br />
…<br />
- Recovery of the fishing and fish-processing industry, possible moving away of<br />
production from Norway fish transports will increase both within Russia<br />
and from Russia to Finland and Sweden<br />
- Development of the forest sector and forest policy how will significantly<br />
increasing Russian exports make use of Finnish and Swedish infrastructure and<br />
ports in transports?<br />
- In the long term: growing mining and metal industry in the Murmansk area,<br />
the Shtokman gas field crosswise goods streams will increase, potential<br />
links to ports by the Gulf of Bothnia and the west coast of Norway Calls for<br />
realisation of the Salla-Kandalaksha railway line and a crosswise road network<br />
suitable for international traffic in northern Lapland<br />
- Positive development in the Republic of Karelia is likely to lead to increased<br />
land traffic volumes on an east-west axle<br />
- In the long term, development of the tourism sector (infrastructure, services,<br />
security) is likely to increase the volume of people traffic in the Kola Peninsula<br />
many times over; new ski centres etc. will this mean a permanent<br />
eastward shift in the destination of international tourists in the future?<br />
2.4 Northern Finland – Lapland, Northern Ostrobothnia and<br />
Kainuu<br />
2.4.1 Business trends in northern Finland<br />
Forest and metal industry accounts for most of industrial production in northern Finland.<br />
Industry is more dependent on export than elsewhere in Finland. (Lapin liitto, 2005a) Major<br />
industrial centres are the Kemi-Tornio area in Lapland, Oulu and Raahe in Northern<br />
Ostrobothnia and the Kajaani area in Kainuu. <strong>The</strong> raw material used at the ferrochrome<br />
plant in Tornio comes from the chrome mine in Keminmaa, which has the deepest known<br />
chrome ore deposit in the world. <strong>The</strong>re are plans to make a switch from open-face to underground<br />
mining in the near future, which would double the mining mass capacity. 21<br />
Development of mining is seen as having great potential in northern Finland’s future<br />
strategies as well. (Lapin liitto, 2005a) A nickel mine is scheduled to open in Kevitsa, Sodankylä<br />
in 2005. 22 <strong>The</strong> multimetal deposit in Kevitsa is one of the biggest in Finland.<br />
Europe’s biggest gold mine is likely to commence operation in the near future in Suurikuusikko,<br />
Kittilä. According to the latest geological surveys, the gold reserves of the find<br />
total over 116 tons. 23 Opening of a nickel mine, anticipated to become one of the four<br />
biggest nickel mines in the world, is also being planned in Sotkamo. It would create jobs<br />
21 www.outokumpu.com<br />
22 www.kaleva.fi 2005-06-17<br />
23 www.kaleva.fi 2005-08-20; www.euroinvestor.se 2005-07-19
17<br />
for 450 persons. 24 Small, private satellite mines founded close to big mines are common<br />
elsewhere in the world, and they make popular investment targets. <strong>The</strong>re are plans to start<br />
this type of investment in Finland as well. Eastern parts of northern Finland have in recent<br />
years begun to interest foreign mining companies due to promising diamond finds. 25<br />
<strong>The</strong> Oulu region is a significant centre of information technology, even on an international<br />
scale, and its impact on development in all of northern Finland is considerable. However,<br />
ETLA, the Research Institute of the Finnish Economy, no longer believes in exceptionally<br />
brisk growth in the IT sector of the kind that was seen in the 1990s, when the number of<br />
jobs increased by nearly 100%. 26<br />
In Kainuu, which is suffering from economic stagnation, cross-border cooperation with<br />
Russia is seen as a resource that should be fully made use of. (Kainuun liitto, 2005) In the<br />
province’s future strategies, the possibilities created by growth of the Russian economy<br />
are emphasised in making Kainuu an attractive investment target for international subcontracting.<br />
<strong>The</strong>re is also increased interest on the part of SMEs in Kainuu towards operation<br />
on the Russian side, and joint surveys have been launched with metal and timber<br />
companies in the area concerning the initiation of production in adjacent areas and more<br />
versatile raw material production in Russia. 27<br />
24 www.tekniikkatalous.fi 2005-05-26<br />
25 www.kaleva.fi 2005-06-12<br />
26 eennakointi.fi/talouskatsaus/<br />
27 www.planora.fi 2005-07-08
18<br />
Image. <strong>Region</strong>al structure plan for Lapland 2022 (Lapin liitto)<br />
Tourism continues to play a major role in Lapland. In the region of eastern Lapland, for<br />
instance, the structural change that has been ongoing since the 1990s (the impact of globalisation<br />
on industrial production, the loss of jobs provided by the state and state-owned<br />
companies) has contributed towards increased investments in tourism. (Valtioneuvoston<br />
kanslia, 2004) <strong>The</strong>re are plans to build a ski-flying hill in Suomu, Kemijärvi. It is seen as a<br />
potential booster for tourism in the area. With the construction of the hill, a ski centre covering<br />
all World Champion and Olympic winter events could be developed in the<br />
Kuusamo/Ruka, Rovaniemi/Ounasvaara and Kemijärvi/Suomutunturi area, which could<br />
serve as an international training centre for skiers. 28 Other examples of tourism projects<br />
include expansion of Santa’s Village on the Arctic Circle in Rovaniemi (the area attracts<br />
about 400,000 visitors each year, most of whom come from abroad) 29 , and the planned<br />
expansion projects in Rukatunturi, which will triple the amount of floor space constructed<br />
in the area. 30<br />
28 www.kemijarvi.fi<br />
29 www.kaleva.fi 2005-06-04<br />
30 www.kaleva.fi 2005-06-20
19<br />
2.4.2 <strong>The</strong> impact of business trends in northern Finland on transportation<br />
in the Barents <strong>Region</strong><br />
…<br />
- Potential within the mining industry increases the need for railway link maintenance/development;<br />
the Arctic Ocean coast railway line with branches?<br />
- On the other hand, possible closing down of railway lines with little traffic in areas<br />
of impact of promising finds may weaken prospects of growth in the field<br />
- Doubling of production volume of the Kemi chrome mine increased steel industry<br />
transport volumes; raising the capacity of sea fairways in ports by the<br />
Gulf of Bothnia<br />
- If implemented according to plans, cross-border cooperation between Kainuu<br />
and Russia will increase the volume of cross-border traffic; with the exception of<br />
the Sotkamo nickel mine, no single significant transport factor is likely to be in<br />
sight in Kainuu; however, realisation of the NEW corridor would increase the<br />
volume of transit traffic via Kainuu (the Barents link)<br />
- Development of the hospitality sector in Lapland and possible investments in<br />
winter sports will increase the volume of air and road traffic and put added pressure<br />
on infrastructure development, particularly as far as the deficient east-west<br />
axle is concerned<br />
3. <strong>Region</strong>al transport subsidies in Finland, Sweden and<br />
Norway as a factor influencing traffic streams in the<br />
region<br />
3.1 General<br />
<strong>The</strong> aim of regional transportation subsidies is to even out the higher transportation costs<br />
caused by long distances in sparsely populated northern provinces in order to improve the<br />
competitiveness of enterprises operating in the area. Transport subsidies are a form of regional<br />
policy subsidy approved by the EU. In each country, a certain percentage of transportation<br />
costs is subsidised, depending on the distance travelled. Enterprises operating in<br />
certain fields only are eligible for subsidies (the product must be highly refined; e.g. transportations<br />
of iron ore or raw timber are not eligible). 31<br />
31 www.te-keskus.fi; www.transportstotte.no; www.nutek.se
20<br />
3.2 Current situation<br />
3.2.1 Finland<br />
<strong>The</strong> current legislation on regional transport subsidies is in force until 2007. Subsidies are<br />
only paid to SMEs located in the provinces of Lapland, northern Ostrobothnia, Kainuu,<br />
North Karelia, Etelä-Savo and Pohjois-Savo.<br />
Transport subsidies are paid for transportation by rail and lorry, when the distance is at<br />
least 266 km. If the transportation involves port operations, subsidies can be paid when<br />
transportation by land is at least 101 km. <strong>The</strong> subsidy is 7-29% of transportation cost, depending<br />
on the distance. Transportations starting in the North Calotte area (northern Sweden,<br />
northern Norway, Lapland, the Murmansk area) can be subsidised even if the distance<br />
covered in Finland is less than 266 km, if the total distance covered is at least 266<br />
and the transportation is destined for another country’s North Calotte area, or is being<br />
taken further from there; however, the subsidy only covers the part of the journey completed<br />
in Finland. Ports by the Gulf of Bothnia also receive port operation subsidy,<br />
which is not affected by distance, and it is always paid to the dispatcher of goods.<br />
<strong>The</strong> subsidy totals € 1.04/tn for ports located between Merikarvia and Kalajoki, and €<br />
2.05/tn for ports north of Kalajoki.<br />
At the moment, about € 3.7 million/year (2004) is paid in transportation subsidies to a<br />
total of about 250 SMEs. On this scale, the direct impact of the subsidy on traffic streams<br />
is negligible, because the subsidy is too small to stimulate an increase of production volume.<br />
(State Audit Office report 57/2003) An interesting detail comes out in the survey<br />
conducted by Logisforum concerning logistical needs of firms operating in northern<br />
Finland now and in the future: <strong>The</strong> current system of transport subsidies directs part of the<br />
goods streams to ports in southern Finland, because it is cheaper for the exporter to use<br />
them instead of the nearest port. (Logisforum, 2002) In its current for, the law thus puts<br />
added pressure on the road network in southern Finland, instead of making use of sea<br />
transport, e.g. through the Port of Oulu.<br />
3.2.2 Sweden<br />
In Sweden, transport subsidies are not restricted by the size of the company. Transport<br />
subsidies are paid to enterprises located in remote northern areas (Jämtland, Norrbotten,<br />
Västerbotten and Västernorrland).<br />
Transport subsidies are paid for railway and lorry transportation, when the distance covered<br />
is at least 401 km. <strong>The</strong> distance travelled by road is however irrelevant, if the destination<br />
is a port situated in the region covered by the subsidy (cf. the situation in Finland),<br />
and if the transportation continues by sea for any considerable distance. Subsidies are paid<br />
for transportations abroad, if the total distance travelled is at least 401 km. <strong>The</strong> subsidy is<br />
paid for the part of the transportation covered in Sweden. <strong>The</strong> subsidy totals 15-45% of<br />
transportation cost, depending on the distance and the area.<br />
In Sweden, the amount of regional transport subsidies is ten-fold compared to that paid in<br />
Finland (SEK 350 million, [about € 37 million] in 2002). <strong>The</strong> amount (as well as the fact<br />
that large companies are also eligible for support) naturally has a considerable impact on
21<br />
companies’ production volumes, and thereby on regional traffic and transportation balance.<br />
(Lähteenmäki-Smith, 2002)<br />
3.2.3 Norway<br />
In Norway, a system of regional staggering has been used since 1975 in determining employers’<br />
social security costs. <strong>The</strong> payments by employers have varied between 14.1 percent<br />
in cities in southern Norway and zero in northernmost Norway. <strong>The</strong> objective has<br />
been to improve the competitiveness of sparsely populated areas. According to a decision<br />
made by the EFTA surveillance authority at the beginning of 2004, the Norwegian system<br />
partly distorts competition, and changes were thus made. A corresponding system, albeit<br />
on a smaller scale, was abolished for the same reason in Sweden in 2000. In Finland, a<br />
three-year experiment was launched in 2003 in northern Lapland and the archipelago by<br />
which social security payments by the employer were abolished altogether. <strong>The</strong> impact of<br />
this measure has been very limited in Finland, and there are no plans to continue with this<br />
form of support. (Sosiaali- ja terveysministeriö, 2005; Valtioneuvoston kanslia, 2000)<br />
In Norway, the zero level of employer’s social security payments will remain in force in<br />
Finnmark and the area of Nord-Troms, but elsewhere the level will gradually be raised to<br />
14.1% by the year 2007. For this reason, a new national transport subsidy has been introduced<br />
in Norway as a regional subsidy form replacing the old system.<br />
It should be remembered in this connection that the government is currently engaged in a<br />
dispute with the European Commission concerning the reinstatement of staggered payments<br />
by employers in the entire area of northern Norway, because EU regulations on<br />
regional subsidies are unclear. 32<br />
<strong>The</strong> national transport subsidy is only given to firms affected by the raise of social security<br />
payments. Transports by rail, lorry, sea and air are eligible for the transport subsidy. <strong>The</strong><br />
condition for receiving the subsidy is that the transportation distance is at least 350 km.<br />
For transports destined for Finland or Sweden, subsidy is paid for the part of the journey<br />
covered in Norway, if the total distance travelled is at least 350 km. Transportations to<br />
other countries are eligible, if the distance travelled in Norway is at least 350 km. In the<br />
provinces of Nordland and Troms, the subsidy comes to 30-40% of the transportation cost,<br />
depending on the distance; however, the subsidy must not exceed the amount of raised<br />
social security costs on annual level. In the 2005 budget, about NOK 200 million (about €<br />
25 million) has been reserved for the national transport subsidy.<br />
In addition to the national transport subsidy, subsidies given by provinces to firms operating<br />
in their area have been in use in northern regions. <strong>The</strong>re are differences between the<br />
provinces as to grounds for granting support, but as a whole, the significance of this type<br />
of subsidy is relatively minor. For example, in the 2005 budget in the province of Troms,<br />
about NOK 7.8 million (about € 1 million) has been set aside for regional transport subsidy,<br />
while there are no budget funds reserved for this purpose in Finnmark. 33<br />
32 Esim. odin.dep.no/fin/norsk/norsk_okonomi/arbeidsgiveravgift/bn.html<br />
33 www.troms-f.kommune.no; www.finnmark-f.kommune.no
22<br />
3.3 <strong>Future</strong> prospects and possibilities<br />
3.3.1 Finland<br />
A working group set up under the auspices of Lapland’s TE (Employment and Economic<br />
Development) Centre (representing the TE Centres and regional councils of Kainuu, Central<br />
Ostrobothnia, Lapland and Northern Ostrobothnia) has proposed the expansion of the<br />
current transport subsidy into logistics support for SMEs (as part of the proposal concerning<br />
the so-called Arctic subsidy supported by the European Commission), which would<br />
e.g. cover transportation of people in addition to goods (<strong>The</strong> Strategy of Northern Finland<br />
– interim report 22 November 2001).<br />
<strong>The</strong>re have been calls for a significant increase of the level of transportation subsidy on<br />
the part of industry and hauliers. In addition, the fact that the legislation on transportation<br />
support is in force for a fixed term and its future is uncertain diminishes companies’ eagerness<br />
to make large investments that might lead to increased transportation volumes. For<br />
the time being, no factors can be discerned as having a direct impact on traffic streams in<br />
one way or another.<br />
3.3.2 Sweden<br />
<strong>The</strong> current status, impact and possible development measures of transport subsidies are<br />
analysed in the report Transportbidraget – En analys av motiv, effekter och alternativ<br />
(2004) drawn up by Nutek, an organisation responsible for transport subsidy administration.<br />
An interesting proposal from the viewpoint of traffic streams in the region is that of<br />
giving subsidies to transportations<br />
destined for ports in Norway as<br />
well. At present, the subsidies direct<br />
goods streams to ports in<br />
southern Sweden, because the distance<br />
to ports in Norway falls short<br />
of the 401 km required. If this reform<br />
were implemented, it would<br />
have a considerable effect on the<br />
transportation system, because the<br />
amount of lengthwise traffic in<br />
Sweden would decrease, whereas<br />
crosswise traffic to Norway would<br />
increase. This would mean new<br />
requirements concerning e.g. the<br />
E12 road from Umeå to Mo i Rana.<br />
As is mentioned in the report, the<br />
impact of a plan of this kind calls<br />
for thorough charting and additional<br />
studies.<br />
Image. <strong>The</strong> alternative direction of goods streams from<br />
Sweden (Source: Infraplan)
23<br />
<strong>The</strong> transport subsidy allocation will remain unchanged in the future, although there has<br />
been some pressure to cut it. (Info bulletin issued by Näringsdepartementet, 18 August<br />
2005)<br />
3.3.3 Norway<br />
In the 2006 state budget, a raise of about 50% to NOK 300 million (about € 38 million,<br />
Kommunal- og regionaldepartementet) has been planned. This would reflect the gradual<br />
raise of employers’ social security payments, and will therefore not increase the relative<br />
level of transport subsidy, which would increase traffic streams.<br />
<strong>The</strong> European Commission has however also proposed that other types of use subsidies<br />
besides direct transportation subsidy be allowed in very sparsely populated areas (the socalled<br />
Arctic subsidy, cf. Finland). Due to these unclarities in regional subsidy policy the<br />
earlier decision on the discontinuation of staggered payments by employers may thus be<br />
revoked.<br />
3.4 <strong>The</strong> impact of possible changes in transportation subsidies<br />
on traffic streams within the entire Barents <strong>Region</strong><br />
In accordance with the guidelines of transport cooperation in the Barents <strong>Region</strong>, the entire<br />
Barents <strong>Region</strong> should be seen as a single transport area. Decision-makers should also<br />
be encouraged towards joint planning and development of the region’s transport infrastructure<br />
and services. <strong>The</strong> road networks of southern parts of Finland, Sweden and Norway<br />
are already heavily congested. <strong>The</strong> constantly growing volume of heavy traffic increases<br />
the risk of serious accidents, as has been seen in the past couple of years e.g. in<br />
Finland, in addition to exacerbating the problem of air pollution. Guiding transports from<br />
northern areas to an east-west direction instead of a north-south route would be in line<br />
with the EU’s TEN transport network policy, which emphasises the prevention of congestion<br />
and increasing cross-border operation and regional cohesion. (Sikow-Magny, 2005)<br />
In practice, transport subsidy systems in Finland, Sweden and Norway only cover areas<br />
that make up the Barents Euro-Arctic transport area. Thus, when considering transport<br />
subsidy reforms in individual countries, the Barents <strong>Region</strong>s should be looked at as a<br />
whole. <strong>The</strong> alternative transport corridor via Norwegian ports proposed by Nutek that was<br />
mentioned above is an excellent example of this. In Finland, it is vitally important to ensure<br />
at least that the transport subsidy system guides goods streams via the shortest possible<br />
route to ports by the Bay of Bothnia in the case of firms whose logistics could benefit<br />
from this, instead of increasing the “lorry rally” to southern Finland even further. In addition,<br />
increasing the amount of subsidies in Finland as well and reviewing the restriction<br />
based on the size of the company might open up more extensive possibilities for more<br />
comprehensive utilisation of the entire east-west axle.
24<br />
4. <strong>The</strong> current situation and future of goods transport<br />
fees in Finland, Sweden and Norway - the impact on traffic<br />
streams in the Barents <strong>Region</strong>?<br />
4.1 General<br />
According to current European transport policy, the aim of fees on transportation is to<br />
diminish congestion, environmental damage, accidents as well as infrastructure wear and<br />
tear. In practice, this means influencing total transportation demand, the impact on timing<br />
of demand and the distribution between modes of transportation. (VTT, 2004) For instance,<br />
the introduction of a kilometre-based infrastructure fee for heavy road traffic may<br />
result in a significant shift from road to railway transports etc. Changes in traffic pricing in<br />
one country affect other countries as well.<br />
<strong>The</strong> taxes used in road traffic are taxes based on vehicle purchase and length of time registered<br />
and the taxation of fuel and kilometres driven. Fees on infrastructure use include fees<br />
levied for the use of a particular stretch of road, tunnel or bridge, as well as rail fees in<br />
railway transportation.<br />
Transport subsidies (e.g. exemption from fuel tax for vessels and exemption from electricity<br />
tax for railways) has no direct effect on the distribution between modes of transportation.<br />
<strong>The</strong> popularity of sea transport as compared to transport by land is not increased by<br />
subsidies given to sea transport, because the price level of sea freights is defined by international<br />
markets, and subsidies go to shipping companies and their costs. In a similar vein,<br />
rail transport subsidies would go towards meeting the increasing costs of operators, if state<br />
funds were used in an attempt to attract customers to choose transport by rail. (LVM,<br />
2005a)<br />
4.2 Current situation<br />
4.2.1 Road transport<br />
Finland<br />
• annual fixed tax, taxation of fuel<br />
• no road tolls/fees<br />
• no annual user fees for heavy traffic<br />
Sweden<br />
• annual fixed tax, taxation of fuel<br />
• no significant road tolls/fees<br />
• annual user fee for heavy traffic (Eurovignette)<br />
‣ for Swedish vehicles, for the entire road network (“tax”); for foreign vehicles,<br />
for expressways and certain stretches of basic road network (“fee”)<br />
‣ differentiated according to the vehicle’s environmental impact<br />
Norway<br />
• annual fixed tax, taxation of fuel<br />
• road tolls widely in use on expressways, bridges and tunnels<br />
• no annual user fees for heavy traffic
25<br />
Heavy Traffic Net Charges,<br />
Domestic Haul (40 tn / 400 km)<br />
70<br />
60<br />
50<br />
EUR 40<br />
30<br />
20<br />
10<br />
0<br />
Finland<br />
Sweden Norway<br />
Fuel taxation<br />
Eurovignette<br />
Annual vehicle tax<br />
Image. Taxes for heavy traffic in Finland, Sweden and Norway (Source: ECMT 2004<br />
(http://www.cemt.org/topics/taxes/AnnexB3e.xls)<br />
4.2.2 Rail transport<br />
Finland<br />
• gross ton kilometre-based rail fee<br />
‣ basic fee<br />
‣ rail tax<br />
Sweden<br />
• gross ton kilometre-based rail fee<br />
• accident fee<br />
• diesel fee (halved for newer equipment (1990))<br />
• in addition, the so-called Öresundsbroavgift (a fee for trains crossing the Öresund<br />
bridge) and rail yard fee.<br />
Norway<br />
• gross ton kilometre-based rail fee<br />
• CO 2 fee (diesel)<br />
• electricity fee (kWh-based)<br />
• multimodal transportations exempted from fees<br />
‣ the aim of this measure is to reduce the amount of transportations solely by<br />
lorry
26<br />
Table.<br />
Rail fees in Finland, Sweden and Norway. Sources: LVM 2005, SIKA 2002, Samferdselsdepartementet<br />
2004, Euro exchange rate on 16 June 2005<br />
Finland Sweden Norway<br />
Rail fee:<br />
€0,001227/gtnkm<br />
Rail fee:<br />
(basic €0,00030/gtnkm<br />
Rail fee:<br />
€0,00150/gtnkm<br />
fee)<br />
(SEK0,0028/gtnkm) (NOK0,0118/gtnkm)<br />
Rail tax<br />
€0,001/gtnkm (diesel)<br />
€0,0005/gtnkm (electricity)<br />
Accident fee:<br />
€0,0592/km<br />
(SEK0,55/km)<br />
Railway fees based on the number of kilometres transported<br />
4.2.3 Transport by water<br />
Finland<br />
• merchant vessels must pay a so-called fairway fee for the use of state fairways<br />
‣ size of the fee depends on vessel type, size and its ice-strengthening<br />
‣ the fee is the same in the entire country (no fairway-specific fees)<br />
‣ Merenkulkulaitos (the Finnish Maritime Association) has the right to grant<br />
discounts to so-called transit traffic<br />
• piloting fee<br />
• in addition, ports levy port fees<br />
Sweden<br />
• a two-part fairway fee<br />
‣ partly based on gross capacity (differentiated according to environmental<br />
impact)<br />
‣ partly based on amount of tons transported<br />
‣ Sjöfartsverk has the right to grant so-called commercial discounts to stimulate<br />
shipping.<br />
• piloting fee<br />
• ports levy port fees<br />
Norway<br />
• in most municipal ports, fairway fee based on gross ton capacity, so-called safety<br />
fee and piloting fee<br />
• ports levy port fees and ice-breaking fees<br />
4.3 <strong>Future</strong> prospects<br />
4.3.1 EU’s general transportation policy lines<br />
Transport policy strategy 2010 (White book 2001)<br />
• strong competitiveness<br />
• less environmental damage<br />
• shift from roads to transport by rail/water<br />
• better usability for all groups<br />
• improved traffic safety
27<br />
Preparation of transport mode-specific directive<br />
• Proposal for amendment of the Eurovignette directive (2003)<br />
‣ expands member states’ right to levy user fees from heavy goods traffic for<br />
the use of the road network<br />
‣ fees are not mandatory, but if they are levied, the directive must be followed<br />
‣ the primary objective is to guide companies’ logistic choices, so that external<br />
and internal infrastructure costs caused by transportation are taken into<br />
account better than before<br />
‣ Germany intends to impose kilometre fees from the beginning of 2005. In<br />
Austria, fees have been in use from the beginning of 2004, and Holland and<br />
Sweden (see below) are also studying the possibility of turning the Eurovignette<br />
fee into a kilometre fee<br />
• Fuel directive proposal (2002)<br />
‣ fuel taxation would gradually fall within a common fluctuation margin<br />
‣ the proposal was rejected by the European Parliament<br />
• Amendment of the Railway traffic capacity and rail fee directive (2001) is under<br />
way<br />
‣ the principles of the fee system have been extensively harmonised<br />
‣ the aim is to make calculation grounds more uniform<br />
• Transport by water (2001)<br />
‣ differentiation of fairway fees according to actual costs caused by emission<br />
and noise<br />
Supporting different modes of transportation<br />
• the Marco Polo II programme<br />
‣ aimed at supporting intermodal transportation<br />
‣ long-term objective is to move transportations from roads to waterways<br />
4.3.2 Road transport<br />
Finland<br />
• heavy-traffic fees are seen in many ways as posing a problem (the costs of transportations,<br />
abroad, there is little transit traffic in Finland, technical implementation<br />
is costly); Finland thus aims to concentrate on following European development on<br />
this issue (LVM, 2003).<br />
Sweden<br />
• the government’s road traffic tax report proposes a significant increase of diesel<br />
tax and the introduction of a kilometre tax for heavy traffic (Finansdepartementet,<br />
2004)<br />
‣ the opinion in northern Sweden is that these measures might even mean the<br />
death of forestry and sawmills, due to the long distances. According to a<br />
report drawn up by forest industry research centre Skogforsk, transportation<br />
costs in the forest sector would increase by 30% if the proposal were<br />
put into effect.<br />
‣ it has also been estimated that the reform would mean an extra cost of SEK<br />
1.1 billion to the food industry (Lantbrukarnas Riksförbund)
28<br />
‣ at present, foreign lorries only pay an Eurovignette user fee for using the<br />
so-called Eurovignette road network; if the kilometre fee were introduced,<br />
the fee would be used on the entire road network<br />
Norway<br />
• the possibility of introducing municipal low-emission zones (lavutslipssoner) and<br />
the extra costs/restrictions this would impose on heavy traffic are being studied<br />
(Samferdselsdepartementet, 2005)<br />
‣ the greatest impact would be felt in big southern cities, where emissions are<br />
the greatest problem<br />
4.3.3 Rail transport<br />
Finland<br />
• internal Finnish traffic will be opened for competition in the year 2007<br />
‣ new operators are most likely to be interested in current high-volume routes<br />
and whole-train transportations for big customers competition and the<br />
threat of competition will lower railway freight prices in the case of strong<br />
goods streams<br />
‣ correspondingly, the freight prices of irregular and minor goods streams<br />
may go up small railway consignments are likely to be transported by<br />
lorry in the future (LVM, 2005b)<br />
Sweden<br />
• In 2002, SIKA proposed a reform of rail fees. <strong>The</strong> most important were raising the<br />
diesel fee many times from its present level, the introduction of a carbon dioxide<br />
fee, and a kWh-based electricity fee. (SIKA, 2002) In practical terms, this would<br />
mean that fees for electrical trains would be doubled, and those of diesel trains<br />
would increase by 300%. No reforms are scheduled in the near future.<br />
4.3.4 Transport by water<br />
Finland<br />
• fairway fee reform is currently under way<br />
‣ A Ministry of Transportation and Communications working group has<br />
made two new proposals for new fairway fee legislation, which are currently<br />
being circulated for comment (LVM info bulletin, 30 June 2005)<br />
‣ both proposals suggest that an annual fee in internal traffic and the discount<br />
it brings be abolished; fairway fees for cargo vessels from Finland and<br />
other EU member states would go up on average 11%, while fees for others<br />
would go down 10%<br />
‣ the other proposal would impose the so-called ice passage index, calculated<br />
based on the vessel’s width and engine power, meaning that ice classes<br />
based on actual ice strengthening would no longer be used<br />
‣ there are fears that a fee based on ice passage index will diminish the use of<br />
ports in northern Finland during the winter months, leading to a switch to<br />
other modes of transportation from the north
29<br />
‣ possibility of traffic streams moving to ports in northern Sweden? Ice passage<br />
capacity is not used as a basis for pricing in Sweden<br />
Sweden<br />
• the future reform of fairway fees has been charted; plans to adopt a system based<br />
on distance covered and motor power, aimed at better reflecting the environmental<br />
costs caused by water traffic (Regeringskansliet, 2003)<br />
4.3.5 <strong>The</strong> impact of infrastructure fees on goods traffic<br />
SIKA has analysed the possible effects of the infrastructure fees presented above on goods<br />
traffic performance in Sweden with the aid of a certain modelling system (Samgodsmodellen).<br />
(SIKA, 2005)<br />
Just by itself, the introduction of a kilometre tax for heavy traffic would mean a decrease<br />
of about 5% of road transport performance. <strong>The</strong> effect of the rail fee reforms proposed by<br />
SIKA would decrease goods transports by train by as much as 15%. Furthermore, the introduction<br />
of marginal cost-based fairway fees would diminish sea traffic by about one<br />
percent.<br />
According to the analysis, simultaneous introduction of the fees in all modes of transportation<br />
would lead to an increase of sea transportation performance, to the detriment of rail<br />
and road transport.<br />
4.4 <strong>The</strong> impact of possible changes in goods traffic fees on traffic<br />
streams within the entire Barents <strong>Region</strong><br />
<strong>The</strong> common European trend is to aim at supporting more environmentally friendly modes<br />
of transport. This is an area where Sweden has been particularly active. However, the<br />
planned kilometre tax and the raising of the diesel tax do not take into account impacts<br />
caused by regional differences, such as the limited infrastructure and long distances in<br />
northern areas; for example, there is no parallel railway network available as an alternative<br />
to roads for the majority of firms. <strong>The</strong> fixed structure and close regulation of traffic of the<br />
railway network restricts its use for transports.<br />
In reality, society’s possibilities of affecting the choice of transport mode are relatively<br />
small, because the decision concerning the mode of transport is ultimately made by the<br />
firm that needs transports, based on its own needs. (Ratahallintokeskus, 2005) <strong>The</strong> only<br />
practical consequence of marginal cost-based fees – used without compensatory reductions<br />
in other taxes and fees levied on traffic and transports – in a setting like the Barents<br />
<strong>Region</strong> could very well be a decline of the business sector due to a radical rise in transport<br />
costs that are already high.<br />
When new cross-border transport corridors are being planned, an attempt should be made<br />
to harmonise fees and taxes in individual countries. Major changes in pricing in just one<br />
country – such as the possible kilometre tax in Sweden – are hardly likely to attract international<br />
transit traffic to make use of alternative transportation routes that could otherwise
30<br />
be recommended. Considerable differences in railway tariffs also make it more difficult to<br />
develop wholly new routes and to make better use of existing infrastructure.<br />
It could be rewarding from the viewpoint of the potential east-western Barents transport<br />
corridor to develop a modelling system supporting the analysis of international transports<br />
within the entire Barents Euro-Arctic traffic area in the future. Current freight modelling<br />
systems (e.g. Samgods, NEMO/PINGO, FRISBEE) are relatively inaccurate when it<br />
comes to depicting actual international goods streams due to their differing modelling<br />
premises, emphasises, criteria etc. (STBR, 2005)<br />
<strong>The</strong> transport-policy significance of northern Norway and north-western Russia will increase<br />
considerably in the future thanks to their nearly endless natural resources. This is<br />
why different future transport route alternatives should be analysed. <strong>The</strong> joint impact of<br />
various potential transport corridor alternatives as well as transport subsidy and goods<br />
traffic pricing scenarios on the distribution of transportation modes, and on the choice of<br />
routes in particular, could be modelled more accurately within Barents cooperation. This<br />
would help guide authorities towards making social decisions that are in line with the sustainable<br />
transport policy of the EU and the Barents <strong>Region</strong>.<br />
5. Population structure and development prospects<br />
5.1. Population structure in the future<br />
All in all, about 4.9 million people live in the Barents <strong>Region</strong> being studied here (excluding<br />
the regions of Nenets and Komi) 34 . This is about 3% of the combined population of<br />
Norway, Sweden, Finland and Russia. <strong>The</strong> proportion of population living in the Barents<br />
<strong>Region</strong> varies between the countries, from 2.3% in Russia to 12.5% in Finland. <strong>The</strong> Barents<br />
<strong>Region</strong> thus has a different relative impact in the regional policy of different countries.<br />
<strong>The</strong> majority of people living in the Barents <strong>Region</strong> (67%) are Russian.<br />
<strong>Region</strong><br />
Population in % of country’s Population in Population<br />
2000<br />
total population<br />
2010<br />
change<br />
Norway, Barents 464,328 10.4 471,995 7,667<br />
Nordland 239,109 5.3 241,938 2,829<br />
Troms 151,160 3.4 155,343 4,183<br />
Finnmark 740,59 1.7 74,714 655<br />
Sweden, Barents 511,878 5.8 525,178 13,300<br />
Västerbotten 255,640 2.9 **262,589 6,949<br />
Norrbotten 256,238 2.9 **262,589 6,351<br />
Finland, Barents 647,336 12.5 643752 -3,584<br />
Oulu 455,135 8.8 465,740 10,605<br />
Lapland 191,768 3.7 178,012 -13,756<br />
Russia, Barents* 3,285,000 2.3 2,961,000 -324,000<br />
Arkhangelsk 1,492,000 1.0 1,352,000 -140,000<br />
Murmansk 1,017,000 0.7 883,000 -134,000<br />
34 www.stat.fi, www.ssb.no, www.scb.se, www.barentsinfo.fi/beata
31<br />
Karelia 776,000 0.5 726,000 -50,000<br />
Total* 4,908,542 4601925 -306,617<br />
*Excluding the regions of Nenets and Komi<br />
**Estimated from country’s total forecast based on population share<br />
<strong>The</strong> Barents <strong>Region</strong> population is estimated to diminish by about 6%, or some 300,000<br />
persons, by the year 2010. This reduction is mainly caused by a diminishing of the population<br />
in the areas of Arkhangelsk, Murmansk and Karelia. In Sweden and Norway, the<br />
population living in the Barents <strong>Region</strong> is likely to increase at the same rate as total population<br />
growth in the countries, i.e. by a total of 21,000 persons. In Finland, however, the<br />
population of Lapland province is estimated to diminish by about 14,000 persons, while<br />
that in Oulu province is expected to increase by about 11,000. Population forecasts that<br />
differ as much as this are most likely based on different ideas concerning not only natural<br />
population growth and migration, but also the attraction power and business structure of<br />
the regions.<br />
In the past ten years, population in the Barents <strong>Region</strong> has only grown in the provinces of<br />
Troms and Oulu. It is therefore interesting that in Norway, population growth is also expected<br />
to take place in the provinces of Nordland and Finnmark. This calls for a change in<br />
the direction of current population trends.<br />
<strong>The</strong> number of persons under 15 years of age is expected to fall by the year 2010 in Norway,<br />
Sweden and Finland. According to estimates, the trend is similar in the northern<br />
provinces of Norway and Finland as well. This means that the population will age, which<br />
will contribute further towards a lower birth rate. <strong>The</strong> expected increase in population<br />
would thus involve people of working age and pensioners, which is likely to mean that<br />
migration to the region increases as the birth rate goes down.<br />
In Finland, on the other hand, it is believed that the positive population trend in Oulu<br />
province will be strengthened further by both natural population growth and regional attraction<br />
power. In contrast, there is little belief in the attraction power of the province of<br />
Lapland in the population forecasts. It should however be considered whether the same<br />
kind of population growth as in Norway can be expected in the northern regions of Sweden<br />
and Finland. What should be done in order to attract new residents to these regions, in<br />
addition to the current inhabitants?<br />
5.2. Population growth calls for jobs<br />
A well-functioning and vital municipality or city needs residents, and they need jobs so<br />
that they can earn a living. Even the most pleasant location cannot hold on to its people for<br />
long if commuting distances become unreasonably long, or if there are simply no jobs<br />
available. As possibilities of finding employment weaken, people are faced with two alternatives:<br />
becoming self-employed or moving elsewhere to find a job. Over time, various<br />
solutions to regional problems of unemployment have been proposed. In recent years, the<br />
notion has increasingly gained ground that employment trends in a given area are in some<br />
way dependent on the ability of its regional centre to succeed in the market. This is partly<br />
due to the growing emphasis of the global economy on information-intensive products,<br />
services and sectors. This emphasises the importance of innovative environments and contributes<br />
towards centralisation of regional structure. (Tulevaisuusvaliokunta, 2002) We
32<br />
may therefore have to accept the fact that jobs will increasingly be concentrated in innovative<br />
centres, where waves of information and interaction give rise to new, productive activity.<br />
<strong>The</strong> possibilities of development in areas with poor employment prospects are thus<br />
largely dependent on whether innovative centres can be established in them, securing job<br />
growth in the area.<br />
In recent years, a trend has been seen where people who have had careers elsewhere return<br />
to their former areas of residence after retirement. This sounds very positive, but it should<br />
be remembered that returning migrants will not move to remote, inaccessible areas – they<br />
need services. Even though today’s old-age pensioners are relatively healthy and mobile,<br />
it is to be expected that their circle of life will diminish after an active initial period of<br />
retirement, and accessibility of various social and health care services will become increasingly<br />
important.<br />
<strong>The</strong>se views of the future call for ensuring traffic connections within regions at the very<br />
least. If the demand of services is assumed to focus increasingly on larger regional centres<br />
as opposed to sparsely populated areas and small rural centres, it is important to make sure<br />
that the regional centres are accessible by private and public transport alike.<br />
5.3. Business prospects<br />
Various cluster and Polis plans have been drawn up in recent years based on the concept<br />
of regional centres (Tulevaisuusvaliokunta, 2002). In these plans, a conscious effort has<br />
been made to support the information, technical and economic development of the business<br />
sector by defining a profile for each cluster centre or Polis on the basis of its<br />
strengths. For example, a determined effort aimed at reforming the business structure of<br />
regional centres has been launched within the Multipolis network set up in northern<br />
Finland, and similar Polis projects are under way in northern Sweden as well. <strong>The</strong> cornerstones<br />
on which the Polis concept in northern Finland relies include technology, natural<br />
environment, measuring technology and winter. It is possible to set up competence clusters<br />
around the areas of strength mentioned in Chapter 2, such as mining, mechanical<br />
wood industry, fishing and tourism.<br />
In an increasingly global world, it is no longer sufficient in terms of supporting Polis networks<br />
for each centre to have strong interaction with its own region and national-level<br />
regional centres. In a society where economic and production success is increasingly<br />
based on free flow of information, regional centres must be secured access to international<br />
forums as well. Mere flow of information does not suffice; people and goods must be able<br />
to move as well. It has been shown that personal interaction makes utilisation of existing<br />
information and the birth of innovations more effective. This may also be one of the reasons<br />
for the failure of distance work to catch on as was hoped. Even though persons working<br />
at distance might prioritise their living environment, work performance is often hampered<br />
by the lack of social interaction found in the workplace. Working at distance therefore<br />
calls for smooth connections with the rest of the world, on an international level as<br />
well.
33<br />
PART II: THE CLUSTER PERSPECTIVE
34<br />
6. Development of the Barents <strong>Region</strong> from the Cluster<br />
Perspective<br />
6.1 Oil and gas industry<br />
6.1.1 <strong>The</strong> oil and gas cluster within the regional perspective<br />
<strong>The</strong> oil and gas industry constitutes a significant source of revenue for the national economy.<br />
<strong>The</strong> limited amount of oil and gas resources puts demands on governments and business<br />
policy as to utilisation of finds. <strong>The</strong> benefits must be focused on securing sustainable<br />
development of human, social and physical capital in the regions.<br />
When correctly implemented, the potential benefits of projects are the following: (a) improved<br />
employment locally; (b) transfer of technical and commercial competence and improvement<br />
of local capacity; (c) increased fiscal revenue on regional level; (d) improved<br />
accessibility of services, particularly in the areas of health, education, transport and energy<br />
production due to increasing public funding and investments; and (e) positive cumulative<br />
effects in interest areas. (World Bank)<br />
6.1.2 Current situation and prospects in the Barents <strong>Region</strong><br />
Oil and gas exploration has been conducted in the Barents <strong>Region</strong> for decades, and the<br />
area is one of the richest in the world in terms of raw materials. In the Norwegian part of<br />
the Barents <strong>Sea</strong>, 25 finds have been made (Statoil 2004), and gas production will commence<br />
in the Snöhvit field north of Hammerfest in 2006. Most of the liquefied natural gas<br />
(LNG) produced will be transported by sea to the European market.<br />
In north-western Russia, oil production is ongoing in the north-western areas of Komi and<br />
Nenets. That is where the Timan-Pechora oil and gas province is situated, being one of the<br />
largest in the world (40 fields in production). <strong>The</strong>re is a significant amount of oil production<br />
in southern parts of Komi as well. <strong>The</strong> oil-rich Prirazlomnoye field, where production<br />
is set to begin in the near future, is also located in the northern sea area. <strong>The</strong>re is also a<br />
considerable amount of earth gas production in the regions of Komi and Nenets. <strong>The</strong> most<br />
important gas project in the near future is exploitation of the Shtokmanovskoye field located<br />
in the middle of the Barents <strong>Sea</strong>. Russian operators are currently making decisions<br />
concerning the choice of foreign business partners, and production is scheduled to begin in<br />
2015. <strong>The</strong> annual production volume of gas is estimated at 50 billion cubic metres. Most<br />
of the gas will probably be exported to the US market via the northern sea route. (Business<br />
Support Bureau ”Runa”, 2003)
35<br />
6.1.3 Potential<br />
According to estimates, only 0.32% of the oil reserves in north-western Russia had been<br />
exploited by the year 2000. Oil and gas reserves in the region are believed to last for at<br />
least 140 years. (Business Support Bureau ”Runa”, 2003) Norwegians are expecting to<br />
make a large find east of North Cape. (Innovasjon Norge, 2005)
36<br />
6.1.4 Impacts on traffic in the Barents <strong>Region</strong><br />
- massive cumulative effects<br />
- sub-contracting industry<br />
- an economic boost to the regions creates a favourable environment for other investments<br />
as well<br />
- hundreds of new jobs increase the need for services, housing production etc. indirect<br />
job growth (thousands)<br />
bound to have an effect on road-traffic volumes as well<br />
- commuting?<br />
- development of areas increases the volume of people traffic<br />
Case 1 Snøhvit<br />
Snøhvit-project has increased the attractivity of northern Finnmark among local youth,<br />
returnees and new inhabitants. Immediately after the decision of construction was been<br />
made the population growth turned positive in Alta, Hammerfest and Vadsö.<br />
Business and employment in the area has increased dramatically. Sectors of transportation,<br />
construction hotel and restaurant business and other service sector have increased the<br />
most. Local and regional companies have received many more subcontracts than was estimated<br />
in accounts made previously.<br />
In road transport the load in Alta-Hammerfest road has risen more than expected and heavy<br />
traffic to Melköy has increased the transit trafiic in Hammerfest downtown. It is expected<br />
that daily work traffic From Alta to Hammerfest will increase. Until now it has
37<br />
been noted however that Snøhvit has not increased the governments investment in extra<br />
infrastructure projects although new traffic needs have risen up already.<br />
Business Support Bureau ”Runa” 2003. Industrial Development in the Russian Barents<br />
region.<br />
Innovasjon Norge. 2005. Forstudie. Petroleumsrettet näringsutvikling i Nord-Norge.<br />
6.2 Fish industry<br />
6.2.1 Global trends<br />
Aquaculture will continue as the fastest-growing animal-based food production sector in<br />
the world. <strong>The</strong> share of aquaculture in the production of fish, crustaceans and molluscs is<br />
increasing continuously. As a whole, production volumes within the cluster have however<br />
remained more or less unchanged in recent years due to stagnation in catch fishing and<br />
catch quotas. Fresh fish continues to be the most widely accepted product in the market.<br />
(FAO, 2004)<br />
6.2.2 Current situation and prospects in the Barents <strong>Region</strong><br />
<strong>The</strong> northern coast of the Barents <strong>Region</strong> is a significant production area for fish and fish<br />
products. <strong>The</strong> largest production areas are the regions of Murmansk and Arkhangelsk, the<br />
municipalities of Bodö and Tromsö with adjacent areas as well as Hammerfest, Nordkapp<br />
and Båtsfjord. <strong>The</strong> majority of production is exported. (TØI, 2002;<br />
www.russianamericanchamber.org) <strong>The</strong> volume of fish production in northern Finland<br />
and Sweden does not reach very significant numbers; in addition, fish from the <strong>Baltic</strong> cannot<br />
be exported to the EU due to high dioxin content. (European Commission, 2002)<br />
Both northern Norway and north-western Russia are suffering as a result of stagnation of<br />
the sector. Russia is a growing market for Norwegian fish products. Calculated in tons,<br />
exports to Russia increased by about 50% between 1998 and 2003. (SSB, 2004; Economic<br />
Monitoring of North-West Russia, 2005)<br />
Recently, sizable investments have been made in the Murmansk area aimed at supporting<br />
Russian plants engaged in fish processing. Demands have been issued by Moscow that all<br />
catches must be offloaded in Russian ports so as to ensure sufficient supply of raw material<br />
for the plants. (www.barentsobserver.com 2005-05-26)<br />
6.2.3 Potential<br />
Aquaculture has great potential to become a major industry, particularly in the Murmansk<br />
area; at present, it is only a fraction of the corresponding level in northern Norway. In<br />
2004, over 200,000 tons of farmed fish was produced in the northern provinces of Norway,<br />
while the annual production volume in the Murmansk region has only been 500-600<br />
tons. (www.bisnis.doc.gov; SSB, 2004; Ivanova, 2005)
38<br />
6.2.4 Impacts on traffic in the Barents <strong>Region</strong><br />
Classification of fish products according to transport requirements: (TØI, 2002)<br />
1) Fresh fish, crustaceans and molluscs – tight requirements regarding<br />
transportation time and quality<br />
2) Frozen fish, crustaceans and molluscs, including processed frozen products<br />
– tight requirements concerning unbroken cold chain, but not concerning<br />
transportation time<br />
3) Processed fish, crustaceans and molluscs – no requirements<br />
Fresh fish is mostly transported by lorry (61% of transportations) due to requirements<br />
concerning transportation time and quality. In the Barents <strong>Region</strong>, significant amounts of<br />
fresh fish products are transported between Norway and Russia; from Norway to Sweden<br />
and Finland; and from northern Norway to the south of the country. As Russia continues<br />
to grow in importance as a market for fish exported from Norway (fresh fish makes up<br />
about 40% of all fish exports from Norway to Russia), this is likely to increase the volume<br />
of road transports in the Barents <strong>Region</strong>. <strong>The</strong> question is how large a proportion of these<br />
transports will go via Finland and Sweden. <strong>The</strong> road infrastructure of these countries<br />
might be the most attractive alternative for transporting goods to Russia as fast as possible.<br />
Accordingly, the aquaculture potential of the Murmansk area (1,000-fold production volumes<br />
in aquaculture (cf. Norway) are likely to increase the amount of export transports)<br />
gives rise to the same question: the “most high-quality” and fastest route to Denmark and<br />
Germany runs through Finland and Sweden. However, no fresh fish is transported via the<br />
cross-border stations between Finland and Russia at the moment. (STBR, 2005) Border<br />
crossings that are as smooth and fast as possible pose their own requirements on these<br />
transport corridors.<br />
CASE Innovative aquaculture in the Murmansk area<br />
<strong>The</strong>re is a fish farming plant operating in the Murmansk area by the shore of Lake Imandra<br />
that makes use of the cooling water originating from the Kola nuclear plant that runs<br />
into the lake. <strong>The</strong> daily stream of warm water totalling 1,000 cubic metres creates ideal<br />
conditions for trout farming. According to plant representatives, the growth rate of trout is<br />
2-to-3-fold compared to other fish farms in the area. <strong>The</strong> lake water in the plant area remains<br />
unfrozen even when it gets as cold as -30°C. <strong>The</strong> vicinity of the nuclear plant has<br />
given rise to concern about contamination, but according to plant representatives, the radiation<br />
level of the water does not exceed norms, and each fish batch is tested by three<br />
independent laboratories. <strong>The</strong> fish plant produces 50 tons of trout per year. At the moment,<br />
testing is under way to see whether sturgeon farming can be launched.<br />
(www.murman.ru/news/ 2005-01-24)<br />
Food and Agriculture Organization of the United Nations. 2004. <strong>The</strong> State of World Fisheries<br />
and Aquaculture 2004.<br />
Ivanova, M. 2005. <strong>The</strong> Northern fisheries of the Russian Federation: Institutions in transition.
39<br />
Transportøkonomisk institutt. 2002. Godstransporter innen, til og fra Nordland og Nord-<br />
Norge.<br />
6.3 Testing – a growing branch of industry in the Barents <strong>Region</strong><br />
6.3.1 Global trends<br />
Vehicle testing is one of the biggest and most important branches of industry in the world,<br />
making up about 9% of the combined European GNP. In 2004, some 15.3 million new<br />
cars were bought in Europe. Total car production volume in the world is about 60 million<br />
cars. <strong>The</strong> European Union is currently the world’s largest car producer and market area.<br />
Competition between different car makes is hard, and as customers’ level of demand rises,<br />
product development and thereby vehicle testing has increased considerably in importance.<br />
Cars must also be able to function in extreme conditions (cold, snow, slippery conditions).<br />
That is why new car models have been tested for decades in Barents <strong>Region</strong><br />
countries, particularly Finland and Sweden. In addition to the car industry, tyre manufacturers<br />
are another important actor involved in testing in the Barents <strong>Region</strong>. In addition to<br />
traditional testing, new markets (e.g. trains, airplanes and army equipment testing) are<br />
emerging.<br />
6.3.2 Current situation in the Barents <strong>Region</strong><br />
Winter testing of cars and tyres has been conducted particularly in northern Sweden and<br />
Finland since the 1960s and ‘70s. During the past 30 years, testing has become a very important<br />
branch of business in many municipalities. For example, in northern Sweden the<br />
automotive and component testing industry has a yearly turnover of about 500 million<br />
SEK and an annual growth rate of between 20 and 25%. 35 Car and tyre testing is a major<br />
branch of industry in Finnish Lapland as well. Its indirect impact can be seen as cumulative<br />
effects e.g. in the hospitality and service sector. For example, the large privately<br />
owned car testing unit situated in Särkilompolo, Muonio, provides jobs for 200-300 persons<br />
in the winter, and around 15-20% of the labour force in the municipality is linked to<br />
the industry.<br />
35 Västerbotten Kuriren 17.11.2004
40<br />
In Sweden, testing is conducted in nine municipalities, all of which are members of<br />
SWTR (Swedish Winter Test <strong>Region</strong>), a vehicle-testing organisation (Arjeplog, Arvidsjaur,<br />
Jokkmokk, Älvsbyn, Malå, Sorsele, Gällivare, Kiruna, Storuman). 36 In Finland there<br />
are four companies offering car and tyre testing services. One is in the provincial capital<br />
Rovaniemi, and a pioneer in the business operates from Muonio. This place serves a dozen<br />
or so car manufacturers. <strong>The</strong> other two businesses are both in the municipality of Inari. 37<br />
In northern Sweden and Finland, testing has traditionally involved cars and tyres, but there<br />
is now a determined effort to broaden the scope of winter testing. Winter testing of airplanes<br />
and trains has already been launched in Sweden 38 , while snowmobiles have been<br />
tested in Rovaniemi.<br />
6.3.3 <strong>Future</strong> prospects<br />
<strong>The</strong>re is strong belief in good future prospects in winter testing. Prerequisites for winter<br />
testing in the Barents <strong>Region</strong> are good. <strong>The</strong> northern parts of Finland and Sweden have the<br />
advantage of permanent snow, a long winter, sparse population (secrecy), good traffic and<br />
data connections as well as a stable social system. In Norway, development of testing is<br />
made difficult by variations in altitude, a more insecure snow situation (due to the sea and<br />
the Golf Stream) and the country’s high price level. <strong>The</strong> natural conditions in Russia are<br />
well suited for the purpose, but insecurity and poor traffic and data connections prevent<br />
more extensive development in this field.<br />
In Finland and Sweden, investments have been made in testing development. <strong>The</strong> wintertesting<br />
organisation SWTR promotes the industry’s interests and supports testing activities.<br />
Train and army equipment testing areas are currently being planned in Gällivare and<br />
Sorsele in northern Sweden. 39 Space technology (Phoenix space shuttle) has also been<br />
tested in the vast unpopulated regions of northern Sweden. 40 Development of testing in<br />
36 http://www.welcometovasterbotten.se/default.asp?ML=21331<br />
37 Helsingin Sanomat 18.12.2001<br />
38 Västerbotten Kuriren 13.12.2004<br />
39 Lapin kansa 29.9.2004<br />
40 Ruotsin radio 6.5.2004
41<br />
Finland is being supported through various programmes, such as the Arctic Power project<br />
(snowmobile testing in Rovaniemi) and the project aimed at developing a competence<br />
cluster in cold technology (including e.g. the Polartest and ColdClimateDataCentre projects).<br />
<strong>The</strong>re are also preliminary plans to build a year-round winter-condition test tunnel<br />
for cars in Snowpolis in Vuokatti, a sort of “ski tunnel” for cars 41 , whereas initiation of<br />
Unmanned Aerial Vehicle (UAV) testing has been planned for Kemijärvi 42 .<br />
Switzerland and Austria are currently the main European competitors for the Barents <strong>Region</strong>s<br />
in the field of winter testing. <strong>The</strong> advantages that the Barents <strong>Region</strong> has to offer<br />
compared to these two include a longer and more predictable winter and vast uninhabited<br />
areas that guarantee privacy.<br />
6.3.4 Potential<br />
<strong>The</strong>re are lots of extensive, empty areas featuring extreme conditions in the Barents area<br />
that could be utilised in testing. It is however likely that thanks to their competence centres,<br />
Sweden and Finland will continue to attract the majority of winter testing customers<br />
in the future as well. <strong>The</strong>re is significant potential for expansion in the field, but testing<br />
calls for special competence (education) and capital (connections to manufacturers, public<br />
funding). In addition, prerequisites for the development of testing areas also include good<br />
traffic connections (freight + people traffic) and existing auxiliary services that support<br />
testing (hospitality sector). In the following, some ideas on the development of testing in<br />
other areas besides the two market leaders, Finland and Sweden are presented:<br />
- A testing area for cars using alternative sources of energy (e.g. electric cars) in northern<br />
Norway (Finnmark)<br />
- <strong>The</strong>re is potential for testing of army equipment in other countries besides Sweden, as<br />
extensive military exercises/testing have been conducted in the area and military<br />
structures are already in place <strong>The</strong> development may be prevented or slowed down by<br />
the political situation and history (Nato/Warshaw pact)<br />
- Strong growth of China’s auto industry -> a possibility for development of testing in<br />
Russian parts of the Barents <strong>Region</strong>? Railway connection already exists.<br />
6.3.5 Impacts on traffic in the Barents <strong>Region</strong><br />
Testing poses its own demands and has its own impacts on traffic in the regions. Because<br />
the products being tested are often new prototypes, manufacturers usually want to keep<br />
their products well hidden. <strong>The</strong> majority of products are transported to the test sites in<br />
containers. Testing is often carried out at night for secrecy reasons. Increase in testing<br />
volume means more container traffic in the areas, but it is hardly likely to become significant,<br />
since the freight volumes are relatively small and limited to a certain time of the<br />
year. However, fast and direct connections (air freight + people traffic) are of great importance<br />
for the development of the field. Customers use large sums of money for testing and<br />
they are prepared to pay for good service.<br />
41 Kaleva 5.9.2005<br />
42 Kaleva 9.9.2005
42<br />
6.4 Major sports events<br />
6.4.1 Global trends<br />
In today’s world, sport is big business. Sponsors are interested in sports events due to their<br />
high visibility. In addition, sports events attract large crowds to come and see the events<br />
and enjoy the atmosphere on location. Many sports events have great significance for<br />
business in the area. In the best-case scenario, even a seemingly wacky event may turn<br />
into a real booster for local tourism, as shown by the success of the Swamp Soccer World<br />
Championship in Hyrynsalmi.<br />
6.4.2 Current situation<br />
Looked at from the more central parts of Europe, the Barents <strong>Region</strong> is remote and<br />
sparsely populated. That is why big sports events are rarely arranged there. <strong>The</strong> area’s<br />
strength in terms of sports events is a long winter with abundant snow, which is good from<br />
the viewpoint of arranging winter sports events. That is why the season’s first and last<br />
international cross-country ski events are arranged there. Two large world cup events are<br />
arranged in the Barents <strong>Region</strong> annually: the cross-country skiing, ski-jumping and Nordic<br />
combined world cup event in Kuusamo at the end of November, and the alpine world cup<br />
ski race in Levi, both of them major international events. According to the FIS event calendar,<br />
about 15 major international cross-country and 18 alpine ski events are organised<br />
each year in the Barents area, in addition to some other big winter sports events (such as<br />
the Arctic Challenge - Tromsö Snow Board Competition).<br />
Adventure sport is a relatively new sports form that has fast increased in popularity. Competitions<br />
are arranged in different parts of the world, in places with demanding natural<br />
conditions. About 25-30 large, highly esteemed international events are arranged each<br />
year. In 2005, two of these events took place in the Barents <strong>Region</strong>: one of the competitions<br />
of the Salomon X-adventure World Tour (Riskgränsen) and ExploreSweden (AR<br />
World Series competition). In addition, several smaller adventure sports events are arranged<br />
in the region every year, such as the Lapin Kulta challenge, Syöte challenge, Arctic<br />
KIMM (Hemavan), <strong>The</strong> North Pole Marathon (North Pole, Russia), FEM (Kebnekaise),<br />
Kieppi Adventure challenge (Oulu region), Björkliden Arctic Marathon (Kiruna). Additionally,<br />
other adventure sports events are arranged depending on the year, because many<br />
of the races are held on different locations each year (e.g. the North Face Endurance<br />
Quest). Well-organised adventure sports events are the best possible advertisement for the<br />
local tourism industry!<br />
Other interesting sports events that have given rise to international interest and attracted<br />
participants from other countries include the Arctic canoe race (Kilpisjärvi-Tornio, now<br />
terminated), the Border-to-Border cross-country ski event (Kuusamo-Tornio), the Swamp<br />
Soccer World Championship (Hyrynsalmi), numerous Snowcross snowmobile races arranged<br />
around the Barents <strong>Region</strong>, reindeer races (e.g. Inari, Jokkmokk, Kautokeino),<br />
Winter Swimming World Championship (Muonio) and mountain bike races (WC in Åre<br />
in 1999!). In addition, countless smaller national-level sports events are arranged annually.<br />
Among these, soccer, ice hockey and bandy are the ones attracting most interest on national<br />
level.
43<br />
6.4.3 <strong>Future</strong> prospects<br />
What major international events could realistically be arranged in the country is something<br />
that is being evaluated in each of the Barents <strong>Region</strong> countries. For example, there are<br />
plans to build a ski-flying hill in Kemijärvi in Finland. It would make it possible to arrange<br />
World Cup competitions in ski-flying. In Tromsö, plans to apply hosting the 2018<br />
Winter Olympics are being considered.<br />
It is unlikely that the Barents <strong>Region</strong> is chosen as the venue for very many large-scale<br />
sports events. <strong>The</strong> region is far from the main European markets and the population base<br />
does not guarantee large numbers of spectators on location, which is why not all sponsors<br />
are interested. <strong>The</strong> potential there is mainly lies in new branches of sports, extreme conditions<br />
and events making use of the exotic surroundings. However, there are positive exceptions<br />
that bear witness to determined work: the Freestyle Word Ski Championships in<br />
Ruka and the 2005 and 2006 Alpine Skiing World Cup competitions in Levi.<br />
6.4.4 Possibilities<br />
<strong>The</strong> Barents <strong>Region</strong> could find a new profile as an Arctic sports area in Europe. Canada<br />
could be used as an example in this respect; they already have an extensive selection of<br />
Arctic sports events. Greenland has also managed to gain some degree of recognition as a<br />
location for Arctic adventure sports. <strong>The</strong> following is a list of events that could be considered<br />
and organised jointly in the Barents <strong>Region</strong>:<br />
- the Barents <strong>Region</strong>’s own adventure sports event (cf. e.g. the Arctic<br />
Team Challenge in Greenland www.atc.gl): Barents Ultimate X-<br />
Challenge: e.g. hiking + mountain climbing in Norway (1 day), canoeing<br />
in Sweden (1 day), sailing across the Gulf of Bothnia (1 day), cycling in<br />
Finland (1 day), mountain biking + canoeing + hiking in Russia (1 day).<br />
- Arctic winter bicycle race; Arctic Tour of Barents. Bicycle race in extreme<br />
conditions (ultracycling). Possibility for equipment and product<br />
manufacturers to test their products (bikes + clothing). As far as is<br />
known, no similar event exists elsewhere.<br />
- Arctic boat race around the Barents <strong>Region</strong>; <strong>The</strong> Arctic Ocean Race.<br />
Start and goal in Tornio-Haparanda. Channels in Russia used as transport<br />
stages.<br />
- Winter Windsurfing Race across the Gulf of Bothnia (wing surfing)<br />
<strong>The</strong>re is a joint organisation for cooperation and event organisation established in the<br />
1950s, the Barents Sports Cooperation, formerly the North Calotte Cooperation.<br />
6.4.5 Impacts on traffic<br />
Sports events and their arrangement have very little impact on traffic. One might actually<br />
say that the opposite is true: traffic connections have a significant impact on the success of<br />
sport events and on whether the area is chosen as a venue. Particularly the existence of<br />
airports in the vicinity of the venue is an absolute prerequisite of many events, guaranteeing<br />
sufficient connections for freight and people alike.
44<br />
Case 1 Arctic Ocean Race 2008<br />
Sailing is an integral part of the Barents <strong>Region</strong>’s past and present. Nearly every sailing<br />
club and association in the Barents <strong>Region</strong> arranges numerous sailing competitions each<br />
year; however, these are all relatively minor events. Larger regattas and open-sea races<br />
take place elsewhere in the world. <strong>The</strong> Tall Ship Race is the only boat race attracting international<br />
attention arranged in the waters of the Barents <strong>Region</strong>. <strong>The</strong> next Tall Ship Race<br />
in the <strong>Baltic</strong> will take place in 2008. In principle, preconditions do exist for a new, largescale<br />
boat race.<br />
Arranging such an event calls for a lot of work and charting of the suitability of harbours<br />
and fairways in Russian parts of the Barents <strong>Region</strong>. <strong>The</strong> event could be partly funded<br />
within the framework of the STBR II project, under its theme ”improving the conditions<br />
of leisure boating in the Barents <strong>Region</strong>”<br />
6.5 Competence centres – strengthening and maintaining regional<br />
structure<br />
6.5.1 Global trends<br />
<strong>The</strong> competitiveness and employment situation of companies, regions and national<br />
economies is increasingly dependent on their ability to create and utilise new information<br />
and technology. This is partly due to the growing emphasis of the global economy on information-intensive<br />
products, services and sectors. Successful application of new information<br />
and technology requires active involvement in its creation. This calls for innovative<br />
operating environments with an abundant exchange of information and interaction between<br />
organisations. (Tulevaisuusvaliokunta, 2002)<br />
Innovations include the idea of networking. Networks generate social capital, which has<br />
been shown to enhance learning and to promote results in the companies within the network.<br />
Building social capital calls for continuous personal interaction and maintenance of<br />
connections. Large cities have traditionally acted as centres of communication of this<br />
kind. Even though today’s information technology allows remote regions to make use of<br />
the knowledge capital located in urban centres, the sparse interaction network of remote<br />
areas cannot compete with the denser interaction network found in cities. According to the<br />
current view, innovations and successful operation are thus the trump cards of urban centres.<br />
(Tulevaisuusvaliokunta, 2002)<br />
As the operating environment of companies becomes increasingly international, innovative<br />
operation does not by itself suffice to guarantee a company’s position in the global<br />
division of labour. Innovation must focus on a narrow sector, so that it leads to a sufficiently<br />
high level of competence in one or a few areas. This also enables the participation<br />
of smaller regional centres in innovation work and the focused development of their special<br />
competence. Instead of the former regional centres one might talk about centres of<br />
competence specialising in development work of a certain kind.
45<br />
<strong>The</strong> idea behind the concept of competence centres is that they create jobs and bring<br />
wealth to surrounding areas as well. We can make a conscious effort to set up innovative<br />
centres of competence oriented towards a certain type of activity by investing in cooperation<br />
and internationalisation in research and business. When successful, competence centres<br />
attract more actors in the field in question to the area and create better operating conditions<br />
for other branches of business and services.<br />
6.5.2 Current situation in the Barents <strong>Region</strong><br />
Development of the Multipolis network has been ongoing in northern Finland and northern<br />
Sweden since 1998 with the aid of the EU. <strong>The</strong> Multipolis Network has 6 competence<br />
centres in Sweden and 14 in Finland. In 2003, 4 competence centres in northern Norway<br />
joined in as well. <strong>The</strong> competence centres cover a multitude of fields, ranging from “soft”<br />
human fields to “hard” technology. Cooperation between the centres is a key element of<br />
the Multipolis concept.<br />
Image 1. Multipolis centres in the Barents <strong>Region</strong>.<br />
(Source: http://www.lapinliitto.fi/bestpractice/presentations/files/Esitys_7_Multipolis.pdf)<br />
6.5.3 <strong>Future</strong> prospects<br />
Today’s Multipolis centres are located along the main road network, which ensures their<br />
accessibility by road. Competence centres also need fast international connections, which<br />
underlines the importance of international flight connections. Not all Multipolis centres<br />
are directly accessible by flight, but nearly all of them are located less than 100 km from
46<br />
the nearest international airport. It may thus be expected that the links between the Multipolis<br />
centres and the rest of the world will continue to function, provided that the current<br />
air traffic network remains unchanged and road connections between the centres and from<br />
centres to airports are kept in good condition. Traffic connections supporting regional<br />
structure are also of great importance. It must therefore be ensured that traffic connections<br />
between each centre and its area of impact are in order.<br />
6.5.4 Potential<br />
If the centre of competence is seen as a regional centre bringing jobs and economic stability<br />
to surrounding areas as well, the concept should also be introduced in areas where traffic<br />
connections (road and flight connections) are good, but where the Multipolis network<br />
has not yet spread. Such centres include Vadsö and Sör-Varanger in Norway, Inari and<br />
Kittilä in Finland as well as Arvidsjaur, Storuman, Skellefteå, Umeå and Lycksele in<br />
Sweden.<br />
If the existing industries in the regional centres and their accessibility are taken into account,<br />
new centres of competence could be set up e.g. in the following locations:<br />
- Sör-Varanger, Norway,<br />
- Inari, Finland and<br />
- Arvidsjaur, Sweden.<br />
6.5.5 Impacts on traffic in the Barents <strong>Region</strong><br />
Competence centres are primarily situated in centres with good traffic connections. This<br />
means that the centres have good connections with surrounding areas, other centres as<br />
well as international forums. This usually means that the competence centres are regional<br />
centres located in the immediate vicinity of the main road network, preferably very close<br />
to an international airport. As far as existing Multipolis centres are concerned, these traffic<br />
connection requirements are in most cases fulfilled. <strong>The</strong>re are many Multipolis centres<br />
along the Bothnian Arc that are not in the immediate vicinity of an airport, but relatively<br />
close to one, however. <strong>The</strong> Multipolis centres that are furthest from international airports<br />
are those in Sodankylä (Astropolis) and Pajala (Assemblypolis). Development of the competence<br />
centre network primarily involves securing existing traffic connections and construction<br />
of new connections as need arises.<br />
If more competence centre/Multipolis centres are to be built in the Barents <strong>Region</strong>, locations<br />
with good existing traffic connections should be chosen. This is the case in Sör-<br />
Varanger, Inari and Arvidsjaur, for example.<br />
Case 1<br />
Sör-Varanger is a municipality with nearly 10,000 inhabitants close to the border between<br />
Norway and Russia. Sör-Varanger is home to the busy harbour of Kirkenes, which<br />
is used a lot by Russians as well. Because fishing is such an important livelihood in northern<br />
Norway and especially in the Murmansk region in Russia, Sör-Varanger could focus<br />
on fish industry and environmental development projects. <strong>The</strong> competence centre could<br />
also make use of existing cooperation with Russians. Because there are no Multipolis cen-
47<br />
tres in the vicinity, a competence centre located in Sör-Varanger could also provide a<br />
boost for development in surrounding areas.<br />
Case 2<br />
Arvidsjaur is one of the nine municipalities in Sweden where winter testing is carried out.<br />
<strong>The</strong> municipality therefore already has the competence required, and investments have<br />
been made in the field. Even though SWTR, the organisation developing winter testing is<br />
based in Gällivare, Arvidsjaur could also sharpen its image as a winter testing location.<br />
Arvidsjaur has good road connections to many directions, and it is situated in the immediate<br />
vicinity of an airport. <strong>The</strong> success of Arvidsjaur could also promote business in areas<br />
adjacent to it.<br />
Case 3<br />
One of the strengths of Inari in Finland is its participation in the car and tyre testing cluster<br />
in northern Lapland. <strong>The</strong>re is a lot of this type of activity in Sweden, but less so in<br />
Finland. By cooperating with SWTR of Sweden, Inari also has the possibility to gain more<br />
ground as a testing competence centre. Even though Inari is far removed from rapidly developing<br />
centres on a Finnish scale, it has the potential to act as an innovative centre<br />
thanks to modern communications technology and good flight connections. A competence<br />
centre in Inari could also strengthen regional structure in the entire area of Finnish northern<br />
Lapland.<br />
6.6 Large retail units<br />
6.6.1 Global trends<br />
In the Western world ruled by trends shopping has become a more and more popular<br />
hobby. Shopping no longer means only to acquire necessary items on a reasonable price. It<br />
has an increasing element of getting experiences and fulfilling ones dreams. In order to<br />
live the experience of shopping people are willing to sacrifice more time and money than<br />
before. <strong>The</strong>re is a so called shopping culture where consuming is a means of fulfilment.<br />
Shopping trips are also longer than before. Partly this is caused by centralization of jobs<br />
and services which means that in order to get all the necessary services one must travel<br />
more than before. Partly it is also a question of change in thinking. <strong>The</strong> freedom of choice<br />
is being emphasized considerably. Products of right brand, quality or price are being purchased<br />
from centres once considered to be too far. <strong>The</strong> distance and the time needed to<br />
travel are becoming less important compared to shopping itself.<br />
If a retail store wants to draw customers from farther away than the boundaries of usual<br />
weekly shopping, the store must have elements of attraction. A monopoly status (e.g. alcohol<br />
retailing), brand and quality of the product, selection or price can be such elements.<br />
<strong>The</strong> more elements of attraction a store has, the greater the estimated appeal of the store is.<br />
Appeal also tends to pile up. Greater amount of appealing stores in an area results in a<br />
greater selection and sphere of influence for a shopping centre. Competition also has its
48<br />
say in the extent of sphere of influence. <strong>The</strong> further away is the corresponding rival centre,<br />
the greater the sphere of influence is for the shopping centre in question.<br />
When you put together the culture of shopping and the increasing movement of people it<br />
is understandable that people increasingly find their way into shopping centres where<br />
many kinds of services are available or into large retail units of great selection. <strong>The</strong>refore<br />
setting up a new shopping centre or large retail unit may cause changes in streams of customers.<br />
If a new large retail unit or shopping centre is being set up it may also boost up the<br />
demand of other services nearby. This can best be done by known chain stores already<br />
successful elsewhere. For example IKEA and Bauhaus have a wide variety of products<br />
and their prices are competitive to corresponding chain stores.<br />
6.6.2 Current situation in the Barents region<br />
According to statistics of tourism the most appealing shopping centres of Barents are the<br />
cities of Troms in Norway, Luleå, Piteå and Umeå in Sweden and Oulu in Finland. Piteå<br />
excluded these cities are not only centres of shopping but also centres of population and<br />
administration. This makes them popular targets for tourism. Being capitols of counties /<br />
provinces Troms, Luleå, Umeå and Oulu probably have a wide sphere of influence in retail<br />
also. If the sphere of influence is estimated to be 200 kilometres for each of the centres<br />
mentioned, the joint sphere of influence will cover city centres of Norrbotten, Västerbotten,<br />
province of Oulu and the province of Troms in Norway. Outside of this sphere of influence<br />
there are however main parts of provinces of Nordland and Finnmark and the eastern<br />
and northern parts of province of Finnish Lapland. From these areas shopping trips<br />
will mainly be directed into smaller centres such as Bodö, Mo-i-Rana, Vadsö and Rovaniemi.<br />
Nowadays shopping trips in Barents area are directed mainly into five city centres, Troms,<br />
Luleå, Umeå, Piteå and Oulu. <strong>The</strong> shoppers come to each city mainly from its own province,<br />
but it is quite possible that shopping trips are made also from further away. Passenger<br />
traffic from counties to these centres is lively. On the other hand lots of goods are being<br />
transported to these centres mainly from outside of Barents area. Goods can be transported<br />
to centres mentioned by sea and Troms excluded by rail, but most of the goods will<br />
probably be transported by road. This results in a large amount of heavy traffic especially<br />
on the main roads from south to north but also between Troms and Sweden for example.<br />
6.6.3 <strong>Future</strong> prospects<br />
A furnishing and interior design retail store called IKEA is going to open a new outlet in<br />
Tornio, in the borderland of Finland and Sweden. <strong>The</strong> location of the new store is planned<br />
to draw customers from the provinces of Norrbotten, Oulu and Lapland. This kind of<br />
change in flows of customers is very likely to happen. <strong>The</strong>refore the main roads leading to<br />
Tornio increase their significance. Also a new retail outlet of Bauhaus planned to Oulu<br />
will increase shopping trips to Oulu. In addition the usual shoppers from province of Oulu<br />
new shoppers will come from other parts of Finland and Northern Sweden.
49<br />
6.6.4 Impacts on traffic in the Barents <strong>Region</strong><br />
<strong>The</strong>re are altogether 1.5 million inhabitants located in Norwegian, Swedish and Finnish<br />
areas of Barents. Although this amount of people has a lot of purchasing power, the potential<br />
is spread to a fairly wide area. <strong>The</strong>refore it is not likely that any of the shopping centres<br />
of Barents area can compete with larger shopping centres of their countries in volume.<br />
On the other hand the distribution of population gives lots of chances for smaller, provincial<br />
shopping centres to flourish. <strong>The</strong> standing of smaller shopping centres can be broken<br />
down easier than the dominance of greater shopping centre cities. This means that founding<br />
new shopping centres or changes in selection and price in smaller centres can have a<br />
huge impact on the direction of shopping trips. Shopping trips directed to one store or<br />
shopping centre supports also other business activity in the area. On the other hand a massive<br />
direction of shopping trips to shopping centres diminishes supply and demand in the<br />
centre hinterlands.<br />
As the shopping trips are increasingly directed into shopping centres it is of primary importance<br />
that passenger traffic from hinterlands has good and flexible connections to centres.<br />
This goes mainly for shopping trips from provinces to provincial centres but in the<br />
Barents area also the increasing volume of traffic from north to south and between centres.<br />
<strong>The</strong> goods transport for its part will also in the future be directed from south to north either<br />
by road, rail or sea. On the other hand the the dominance of few shopping centres in<br />
the Barents area will decrease the need for goods transport north from polar circle.<br />
Case 1<br />
<strong>The</strong> new IKEA in Tornio will undoubtedly increase the need for goods transport especially<br />
from southern parts of Sweden to Tornio. Most of this load is expected to travel<br />
through highways. <strong>The</strong> passenger traffic to Tornio will also increase which requires well<br />
functioning road connections both from Finland and Sweden. Supposed IKEA can bring<br />
along retail outlets from other product groups the shopping trips from Northern Finland<br />
and Northern Sweden to Oulu and Luleå can decrease significantly.<br />
Case 2<br />
Bauhaus is planning to establish a new outlet in Oulu. Bauhaus also has enough elements<br />
of attraction to re-direct shopping trips. As Oulu already is strong shopping centre, Bauhaus<br />
is only likely to have a small effect on shopping trips. Bauhaus's role will mainly be<br />
to increase Oulu's selection and appeal in a way that will make a shopper to visit Oulu<br />
more often or to come to Oulu instead of Luleå. In order to operate Bauhaus will require<br />
functioning road connections for goods transport from Southern Finland and passenger<br />
traffic from the provinces of Oulu and Lapland.<br />
6.7 Tourism<br />
6.7.1 Global trends
50<br />
International tourism receipts represented in 2003 approximately 6 per cent of worldwide<br />
exports of goods and services. <strong>The</strong> substantial growth of the tourism activity clearly marks<br />
tourism as one of the most remarkable economic and social phenomena of the past century.<br />
<strong>The</strong> number of international arrivals shows an evolution from a mere 25 million international<br />
arrivals in 1950 to an estimated 763 million in 2004, corresponding to an average<br />
annual growth rate of 6.5 per cent.<br />
During this period, development was particularly strong in Asia and the Pacific (13 per<br />
cent on average a year) and in the Middle East (10%) while the Americas (5%) and<br />
Europe (6%), grew at a slower pace and slightly below the world's average growth. New<br />
destinations are steadily increasing their market share while more mature regions such as<br />
Europe and the Americas tend to have less dynamic growth /www.world-tourism.org/.<br />
6.7.2 Current situation in the Barents region<br />
In several regions tourism is regarded as a one of the most important current and future<br />
line of business. All the Barents regions have common tendency for attracting more tourists<br />
and promoting tourism of their own region. <strong>The</strong> Barents region posses good possibilities<br />
for strong tourism development through good marketing, co-operation and capitalizing<br />
Russian possibilities. <strong>The</strong> unique and diverse untouched nature combined with experiences<br />
is the number one tourist attraction of the Barents region. Difficult reachibility, seasonality<br />
and high prices due long distances are the main problems in Barents region tourism<br />
development. In Russia the problems are related to the insufficient tourism and transport<br />
infrastructures. Furthermore, lack of co-operation between municipalities, regions and<br />
countries create obstacles for Barents region wide tourism development as well as regulatory<br />
and andministrative issues.<br />
6.7.3 Potential<br />
<strong>The</strong> greatest potential of the Barents <strong>Region</strong> exists in nature related tourism development.<br />
Problems might occur if resources are wasted to develop same kind of tourist attractions<br />
all over the region. For example four Santa Claus villages in different locations decreases
51<br />
the credibility of all villages and of the whole region as a tourism destination. <strong>The</strong> Barents<br />
region tourism development should focus in creating new, unique experiences and form<br />
functional packages out of them. Promoting international tourism roads in the Barents<br />
<strong>Region</strong> is one potential way of doing this. An other possibility that should be tested, is<br />
testing functionality of a touring bus service (so called adventure bus travel system) in<br />
Barents <strong>Region</strong> circumtances.<br />
6.7.3 Impacts on traffic in the Barents <strong>Region</strong><br />
Tourism development has a direct impact to all Barents <strong>Region</strong> transport modes. <strong>The</strong> aviation<br />
business will be propably mostly affected. <strong>The</strong> prices of flight tickets have been decreasing<br />
since new aviation companies has emerged. New connections are being established<br />
all the time. This prospect creates also new possibilities for new tourist flows to the<br />
Barents <strong>Region</strong>. <strong>The</strong>refore also the signifigance of the transport connections from the airports<br />
increases.<br />
Case 1 Touring bus travel system (Adventure bus travel)<br />
In a nut shell, adventure bus travel is like interrail on wheels. <strong>The</strong> system allows travellers<br />
to jump on and off anywhere and anytime along the route with the same ticket. <strong>The</strong> adventure<br />
buses travel “off the beaten track” to autenthic destinations away from the main roads.<br />
<strong>The</strong>refore, the adventure bus system can fortify existing public transport network. <strong>The</strong> bus<br />
driver is a travel guide, cook, organiser and everything from between being an essential<br />
part of the adventure travel. This concept has become very popular in sparsely habited<br />
countries, where the level of public transport services aren’t very extensive. Adventure<br />
bus travel concept could work well in Barents <strong>Region</strong> as the vertical public transport connections<br />
are insufficient. <strong>The</strong> concept is also a very effective way to start co-operation<br />
between tourism service providers in different locations.<br />
<strong>The</strong> adventure bus travel concept has been targeted firstly to backpackers, but it could<br />
work for other target groups, such as pensioners, also. <strong>The</strong> adaptiblity of this concept to<br />
the finnish Lapland is being studied in a pre-study.<br />
WTO web pages: www.world-tourism.org<br />
STBR study of international tourism roads in the Barents region<br />
(www.barentsinfo.org/stbr)<br />
Lapland road district / Plaana Ltd: “Adventure bus travel network in Lapland” – report<br />
draft 10.10.2005<br />
6.8 Mining industry<br />
6.8.1 General trends<br />
Mining products are necessary in our every day life; as construction material for infrastructure<br />
and buildings and for industrial purposes such as manufacturing of steel, cars,<br />
electronics, drugs, elintarvike and fertilizers. <strong>The</strong> demand for mining products is largely
52<br />
shaped by the market situation of industries like steel and construction industry that use it<br />
as raw material. In this respect the mining industry is different from other industrial sectors.<br />
(Euromines 2004)<br />
Mining industry has potential to stimulate the economic life of rural areas because it can’t<br />
be affected by globalization trend since the deposits are impossible to outsource to countries<br />
of cheap labour from the area where they are found. Instead the demand for example<br />
in China is growing rapidly and the economy needs massive quantities of mining products<br />
which secures the demand of mining products also in the future.<br />
6.8.2 Current situation in the Barents region<br />
<strong>The</strong> Barents region is one of the richest areas in the world in terms of its mineral reserves.<br />
In northern Sweden and northwest Russia the mining industry has been for long time the<br />
single most significant sector contributing to the national economy. Peculiar to the Murmansk<br />
area is soviet originated mono-industrial city phenomenon which means that there<br />
are several cities that depend on single mine. Typical to these industrial plants is ineffective<br />
logistical system with high transportation costs. <strong>The</strong> republic of Kom is another important<br />
centre for mining industry in northwest Russia and five major companies operate<br />
in that area. (Runa 2003)<br />
<strong>The</strong> mines in northern Sweden account for more than 90 % of all iron ore production in<br />
the EU15-countries. <strong>The</strong> portion of mining industry in the Norrbotten BAT in 2000 was<br />
10,8 % in comparison to national portion of 0,3 %. 85 % of Swedish mining industry’s<br />
labour is from Norrbotten and Västerbotten. (Roos, P., 2003)<br />
Linked to this it has been discussed in Finland how could it be that the area between these<br />
two areas wouldn’t have similar industrial potential. At the moment there are only few<br />
mines in northern Finland of which the most important one is the chromium mine of Kom<br />
that sells its production to steel factory in Tornio.<br />
<strong>The</strong> mining industry of northern Norway is concentrated mainly on the the Nordland province<br />
where the focus of the production is on industrial minerals. In unquestionably rich
53<br />
province of Finnmark in terms of raw materials the mining industry has been practically<br />
run down due to the closing of some major production plants. (Nordland fylkeskommune,<br />
2005; Finnmark fylkeskommune, 2003)<br />
6.8.3 Prospects<br />
<strong>The</strong> developing mining industry can be counted as one of the strongest sectors of economic<br />
life in the whole Barents region excluding northern Norway. <strong>The</strong> most important<br />
new projects of the near future include in Finland the Sotkamo`s nickel mine of<br />
Talvivaara, Kittilä`s gold mine and the opening of Sodankylä`s mine of Kevitsa;<br />
Ladozhskoe-5” –gneiss-granite mine in the republic of Karjala and opening of Lomonosov`s<br />
diamond deposit in the are of Arkangel to full production around the year<br />
2009; (Novosti Rossii 2005-06-28) in northern Sweden and in peninsula of Kuola one<br />
concentrates already on the expansion of the existing big units. Several single mining cities<br />
might be completely faded away in the peninsula of Kuola as the production concentrates<br />
on bigger centres. In the republic of Kom the so called aluminium project gathers<br />
attention and it’s bauxite?<br />
mine that belongs to the first phase is already running. It is estimated that the project will<br />
employ in it’s full capacity by the year 2008 even 10 000 persons. (Runa, 2003;<br />
www.kommersant.com 2005-04-26)<br />
6.8.4 Potential<br />
<strong>The</strong> potential of the mining industry in the Barents region is enormous. In Sweden as well<br />
as in Finland and in Russia there are tens of ore finding projects running and there has<br />
been a good number of promising findings. <strong>The</strong> deposit on its own is not however enough<br />
to start a business but also the following factors contribute to the starting of a business:<br />
(Roos, P., 2003)<br />
• Infrastructure such as the availability and the price of water and electricity<br />
• <strong>The</strong> availability and the price of transportation corridors<br />
• Opportunities for cluster concentration<br />
• Historical attitude to mining industry<br />
Especially for Lapland’s economic life well developing mining industry might have a<br />
radical effect. If the importance of the sector would reach even a fraction of the corresponding<br />
in northern Sweden and northwest Russia, it would be a significant factor in<br />
Finland’s economy. In regional perspective the employment effect of the mining projects<br />
has been studied among others places in the University of Umeå where the employment<br />
effect of two future Västerbotten mines was analysed. <strong>The</strong> permanent effect of the projects<br />
was estimated to be 68 indirect jobs for every 100 mining jobs and during heavier investments<br />
the indirect employment would be temporarily considerably more than the direct<br />
employment. (Sörensson, R., 2003)<br />
6.8.5 <strong>The</strong> effect on the traffic of Barents region<br />
<strong>The</strong> transportation volumes of mining industry are traditionally high and the normal transportation<br />
chain is mine – ore refinery – metallurgical production. Railway transportation is<br />
basically the most practical option for the mining industry. Often a railway connection can
54<br />
be built from a mine (in other words from a fixed production plant) to the railway network<br />
where the product is transported either directly to metallurgical production or to the nearest<br />
harbour that meets the logistical requirements of further transportation. Practically the<br />
developing mining industry in the Barents region will put the future of the northern area’s<br />
railway network in a spotlight especially in Finland and in Russia. Currently for example a<br />
big part of the mining production from the peninsula of Kuola is transported via the expensive<br />
and slow northern sea corridor but in the future for example so called Arctic sea<br />
track? and Salla-Kantalahti connection could serve also the northwest Russian’s and<br />
north Finland’s mining industry.<br />
However, it is not sure that the future’s possible mine transportations will use railways.<br />
For example Outokumpu kilpailutti? rikastekuljetukset from Elijärvi chromium mine to<br />
Tornio steel factory and the company will most likely move to road transportation in 2006.<br />
(RHK 2005) <strong>The</strong> increase in the number of road transportation is also affected significantly<br />
by the number of smaller output plants (so called satellite mines) that will be<br />
founded in the future. For this kind of plants it is probably most efficient and most flexible<br />
to transport products on wheels to the nearest big terminal.<br />
Case 1 Talvivaara´s nickel mine in Sotkamo (Kaleva 2005-08-19)<br />
<strong>The</strong> all time biggest mining investment in Finland can be decided in Sotkamo already in<br />
the near future. <strong>The</strong> CEO Pekka Perä from Talvivaara Projekti Oy thinks it is very likely<br />
that the construction work worth at least 300 million could be started already in the beginning<br />
of 2007.<br />
<strong>The</strong> scale of Europe’s biggest unutilized sulphide nickel deposit is grand: the ore zone is<br />
10 kilometres long, 100-400 meters wide and even 400 meters deep. From easily utilized<br />
open pits in the central area, at least 340 million ton of quality ore can be dug. It is estimated<br />
that there will be work for at least thousand persons for 25 years. With multiplier<br />
effects Talvivaara could offer an income for thousand.<br />
<strong>The</strong> metal content of the Talvivaara´s rikaste going for refining would be about 50 per<br />
cent. In addition to nickel also some amount of copper, zinc and cobalt would be collected.<br />
A railway connection is already planned for the mine. <strong>The</strong> distance to the track between<br />
Kajaani and Iisalmi from Murtomäki is 24 kilometres. <strong>The</strong> amount of masses to be transported<br />
is huge and goods need to be transported also to Talvivaara.<br />
Roos, P. 2003. Sustainable Development in Mining communities. An Overview of Economic<br />
effects of Mining in Norrbotten and Kiruna.<br />
Sörensson, R. 2003. Effektstudie av gruvetableringar i Lycksele och Storumans arbetsmarknadsregioner.
55<br />
6.9 Forest and wood industry<br />
6.9.1 Global trends<br />
Internal and external factors such as public pressure and economic realities are continuing<br />
to influence change in the forest sector and to shape the way forestry is defined and practised.<br />
Policies in other natural resource sectors are having a direct impact on sustainable<br />
forest management, increasing the urgency to improve synergies and strengthen partnerships.<br />
<strong>The</strong> recent expansion of the EU will also bring about new challenges and opportunities,<br />
also influencing markets for forest products. (FAO, 2005)<br />
Global trends in forestry include e.g. continuously growing amount of protected forests,<br />
decreasing price level of industrial products and the concentration of business (50 largest<br />
companies own 41 % of worlds industrial wood raw material). In the markets reliability<br />
and ecologically sustainable solutions are being valued more and more. <strong>The</strong> increasing<br />
significance of certified production as a global phenomenon is an example of this. As an<br />
institutional trend, world is stepping from accurately regulated complex planned politics<br />
into market determined solutions and more transparent monitoring. Society is playing a<br />
more important role also in rooting out corruption and determination of occupational<br />
rights. (Forest <strong>Trends</strong>, 2005)<br />
6.9.2 Current situation and future prospects in Barents region<br />
<strong>The</strong> Barents area is rich for its forests also and therefore traditional and strong wood industry<br />
sector characterises the areas industries. Northern Norway and Murmansk excluded<br />
wood industry is either the most important or one of the most important lines of business<br />
depending on the area.<br />
More than 90 % of all Russian forest resources are located in the Asian side of the country<br />
but only small amount of these resources can be used as natural conditions are difficult,<br />
infrastructure is insufficient and transport distances are long. This means that North-West<br />
Russia is the second most important Russian area of wood industry and approximately 70<br />
% of all trades industry is located there. <strong>The</strong> deficiencies of road network cause however<br />
problems in North-West Russia also. This results in e.g. logging companies of Arkangel to<br />
use less than half of their capacity. Companies have to transport timber trough natural waterways<br />
in inland (which are frozen half of the year) or by rail from Komi and Vologda. In<br />
Arkangel area the authorities are investing in extending of forest road networks, although<br />
in this respect it is probably wise to talk about decades in carrying out of the project. <strong>The</strong><br />
accessibility of raw material is even greater problem in the Republic of Komi. <strong>The</strong> Republic<br />
of Karelia has benefited of its location near EU, their situation is better because of foreign<br />
investments and use of more advanced technology. (Runa, 2003)<br />
Russian wood industry export is being effected by the unclear future of export tolls. <strong>The</strong><br />
latest turn is a proposition of prohibiting the export of timer totally, the dume will consider<br />
this. <strong>The</strong> proposition is being made as an attempt to promote the development of national<br />
wood processing. On the other hand this would mean hard times to logging companies as
56<br />
over 40 % of their production is exported. Besides at the moment there is no capacity in<br />
Russian refineries to use all the raw material. (Runa, 2005)<br />
<strong>The</strong> output of wood industry and the use of wood as raw material in Finland will in years<br />
to come most likely remain nearly unchanged. <strong>The</strong> course of change is being determined<br />
by the development of wood industry’s competitive position. In the long term the industry’s<br />
growth potential will be based on the use of exported raw material. (RHK, 2005) In<br />
this respect Russian export policy will likely have an important role. Lately in Lapland<br />
there has been a lot of talk about Metsähallitus’s wide protection programme and the dispute<br />
over logging areas between sámi people and wood industry.<br />
In Sweden the situation is much like that in Finland. <strong>The</strong> production of pulp and sawn<br />
timber has remained at the same level whereas the production of paper has increased in the<br />
country. (Skogsindustrierna, 2005). In the long run the importance of exported raw material<br />
will increase in order to maintain the opportunities of industry’s development.<br />
6.9.3 Potential<br />
<strong>The</strong> wood sectors greatest potential lies in North-West Russia. Most of the logging companies<br />
in Arkangel and Komi regions are export orientated so full scale utilization of raw<br />
material might have a significant effect on timber transportation. It remains to be seen, in<br />
which extent the Russian wood refinement industry will grow in the long term.
57<br />
Source: Barentswatch 1998<br />
6.9.3 Impacts on traffic in the Barents <strong>Region</strong><br />
<strong>The</strong> largest group of transportation in wood industry is timber. (LVM, 2005b) In timber<br />
transportation rail and log floating is usually being used in longer journeys and shorter<br />
journeys are mainly done by trucks. <strong>The</strong> growth in production and use of raw material has<br />
increased the total amount of transportations. Pulp and paper mills and sawmills largely<br />
operate continuously and in order to reduce stocks the need for transportation is continuous.<br />
When Barents area is being looked upon as a whole, the growing need of raw material<br />
transport in wood industry will most likely be satisfied by road transports due to sparse<br />
rail networks. Exporting Russian timber and transit traffic from east to harbours of Finnish<br />
Gulf of Bothnia are dependent upon Russia’s unsettled export policy. <strong>The</strong>se transports<br />
mainly have an effect of one way or another into rail transports.<br />
Case 1. Rail connection Isokylä-Kelloselkä<br />
Finnish organisation of administrating rail (Ratahallintokeskus) has drawn up an account<br />
of future. <strong>The</strong>y suggest that the rail connection Isokylä - Kelloselkä should be closed<br />
down. Nowadays the rail in question is used by wood industry which transports 33,000<br />
tons per year on this rail. (RHK, 2005). If the rail connection would be closed down wood<br />
transports would be directed into road traffic. <strong>The</strong> volume of road transportations would<br />
sum up into 3,500 full trailer combinations. <strong>The</strong> vast increase in use of road would naturally<br />
result into costs of road maintenance. <strong>The</strong>se increasing costs would many times<br />
overcome the savings gained from closing down the rail.<br />
On the other hand maintaining and improving the rail which could eventually be linked<br />
into Russian rail network would open up a connection from Murmansk region to Northern<br />
Sweden (where the future Norrbotniabanan will improve preconditions of international<br />
rail transport) and in that way add to so called Barents corridor. In the provincial vision of<br />
Lapland the rail connection is seen to have future significance also in passenger traffic due<br />
to expected growth in the Murmansk region.<br />
This case reflects in a certain way the nonchalant attitude central governments have towards<br />
infrastructure plans in northern areas. Instead of investing into future only exertion<br />
of roads and raise of costs will be obtained.<br />
Business Support Bureau ”Runa”. 2005. Timber Industry Development in Russia. Problems<br />
and Forecasts.<br />
Food and Agriculture Organization of the United Nations. 2005. <strong>The</strong> State of World’s<br />
Forests 2005.<br />
Forest <strong>Trends</strong>. 2005. Global Forests in Transition.
58<br />
Skogsindustrierna. 2005. Skogsindustrin. En faktasamling 2004.<br />
6.10 Summary of impacts on transport sector<br />
<strong>The</strong> table below is composed according to the previous study and includes rough estimates<br />
about the effects of the development of different sectors to Barents´ region traffic in terms<br />
of countries and mode of transportation. According to this study the cargo transportation<br />
and especially the cargo transportation? on roads pose the greatest difficulties. Mining,<br />
oil and gas sector are estimated to be the most important reasons for the growth of traffic<br />
volumes. <strong>The</strong> growth in personal transportation? caused by new jobs means among<br />
other effects an increase in the commuting between areas. In addition to this, other factors<br />
causing the growth in personal transportation? are the big shopping centres that cause<br />
increase in road traffic and tourism that leads to growth in air traffic.<br />
Important in the growth of traffic and traffic networks in the Barents region is to move<br />
heavy industrial raw materials and products away from road network to water and railway<br />
transportation.<br />
Table. <strong>The</strong> estimated effects of different sectors to the volume of traffic in the Barents<br />
region.
60<br />
7. Research and development projects in the Barents<br />
<strong>Region</strong><br />
7.1. Organisations taking part<br />
7.1.1 EU programme work<br />
<strong>The</strong> aim of the EU’s regional and structure policy is to promote economic and social unity<br />
among the member states and to diminish regional differences in development. <strong>The</strong> financial<br />
support granted by the EU towards various projects is channelled through target programmes<br />
that have been prepared in the member states and approved by the Commission.<br />
A number of organisations are responsible for coming up with ideas for development projects,<br />
their coordination and financial preparation together with interest organisations,<br />
which are more or less directly integrated in the administrative groups of EU programmes.<br />
Interreg Community initiatives and neighbouring areas cooperation programmes for the<br />
EU’s outer borders are multi-country target programmes.<br />
1995-1999 Programme Period<br />
During the 1995-1999 programme period, the Interreg IIA community initiative comprised<br />
cross-border cooperation. Four programmes were implemented during the 1995-1999 period.<br />
Each programme had its own regional administrative committee, which made decisions<br />
on granting EU funding to projects.<br />
<strong>The</strong> Barents Programme. Focused on projects aimed at developing cooperation with the<br />
Murmansk region. <strong>The</strong> programme area comprised nearly the entire Barents Euro-arctic<br />
area, i.e. the provinces of Lapland and Norrbotten, Finnmark, Troms, Nordland as well as<br />
Murmansk and parts of the Arkhangelsk region.<br />
<strong>The</strong> North Calotte Programme. Programme background: North Calotte cooperation<br />
funded by the Nordic Council of Ministers. This was closely integrated with the Interreg<br />
programme in terms of both content and administration. <strong>The</strong> general aim of the programme<br />
was to support development in the North Calotte area that was economically, socially<br />
and environmentally well-balanced.<br />
<strong>The</strong> Karelia programme. <strong>The</strong> aim was, jointly with the Tacis programme targeting northwestern<br />
Russia, to diminish the negative effects of the border, to even out economic differences<br />
between areas close to the border and to make use of development potential<br />
through regional cooperation. <strong>The</strong> programme’s cross-border cooperation mainly targeted<br />
the Republic of Karelia.<br />
<strong>The</strong> Kvarken and MittSkandia programme. Programme background: Kvarken cooperation<br />
(Finland-Sweden) funded by the Nordic Council of Ministers and the more loosely organised<br />
MittSkandia cooperation (Sweden-Norway). Forms of cooperation were highly integrated<br />
into the Interreg programme in terms of content and administration. A key element
61<br />
in the implementation of the strategy was the development of ferry connections across the<br />
Kvarken.<br />
2000-2006 Programme Period<br />
<strong>The</strong> Interreg <strong>III</strong> Community initiative implemented during 2000-2006 is divided into three<br />
programme sectors (A, B and C). <strong>The</strong> <strong>III</strong>A programmes promote cross-border cooperation,<br />
the <strong>III</strong>B programmes promote cooperation between states and the <strong>III</strong>C programmes<br />
aim at promoting cooperation between regions. So-called neighbouring area cooperation<br />
programmes for the EU’s outer borders have been drawn up for the final years of the current<br />
structural fund period (2004-2006). Neighbouring area programmes are based on existing<br />
Interreg programmes on the EU’s outer borders. At the same time, preparation of a<br />
new, proper neighbouring area instrument has been launched. <strong>The</strong> intention is to have it<br />
ready for use after the year 2006. <strong>The</strong> goal is to come up with one instrument that can be<br />
used to finance operation on both sides of the EU’s outer border.<br />
Interreg <strong>III</strong>A Kvarken-MittSkandia. <strong>The</strong> programme aims to build a lasting infrastructure,<br />
to develop east-west cooperation with emphasis on transport connections, strengthening<br />
competence and developing the business sector and boosting regional identity. <strong>The</strong> programme<br />
participants are Helgeland in Norway, Örnsköldsvik and Västerbotten in Sweden<br />
and the regions of Ostrobothnia, Central Ostrobothnia and South Ostrobothnia in Finland.<br />
<strong>The</strong> Västerbotten county government has administrative and financial authority over the<br />
project.<br />
Interreg <strong>III</strong>A North. <strong>The</strong> programme is divided into three sub-programmes: North Calotte,<br />
Kolarctic and Sápmi. Of these three, the Kolarctic programme was turned into a<br />
neighbouring area programme in 2003-2004. <strong>The</strong> aim of the North Calotte subprogramme<br />
is to increase the vitality of the region by developing its business sector, infrastructure<br />
and special competence. <strong>The</strong> aim of the Sápmi sub-programme is to achieve a<br />
multi-faceted, active and highly evolved Sámi social life by developing cross-border cooperation.<br />
Joint projects with Sámi living in Russia are implemented through the Kolarctic<br />
neighbouring area programme. <strong>The</strong> <strong>Region</strong>al Council of Lapland has administrative and<br />
financial authority over the <strong>III</strong>A North project. Each programme has its own secretariat (in<br />
addition to separate Norwegian secretariats) that prepares project applications and monitors<br />
the implementation of the sub-programmes.<br />
Interreg <strong>III</strong>B <strong>Baltic</strong>. <strong>The</strong> programme area comprises 11 countries: from the EU, Finland,<br />
Sweden, Denmark, Estonia, Latvia, Lithuania and Poland and the northern parts of Germany.<br />
In addition, the area includes Norway and parts of Russia and Byelorussia. <strong>The</strong><br />
main goals of the programme include east-west integration within the <strong>Baltic</strong> area and inclusion<br />
of the Barents <strong>Region</strong> in more extensive development of the <strong>Baltic</strong> and the entire<br />
Northern Dimension. <strong>The</strong> administrative authority and secretariat are based in Germany,<br />
in addition to which each country has its own national advisory group.<br />
Interreg <strong>III</strong>B Northern Periphery A cooperation programme comprising Finland, Sweden,<br />
Norway and the northern parts of Scotland as well as Iceland, the Faeroe islands and<br />
Greenland. <strong>The</strong> aim of the programme is to improve the competitiveness of the regions<br />
e.g. by diminishing the disadvantages caused by remote location and sparse population, to<br />
make use of their natural strengths and resources and to maintain a sustainable social de-
62<br />
velopment trend. <strong>The</strong> Västerbotten county government has administrative and financial<br />
authority for the project. <strong>The</strong> programme has a joint secretariat and a regional contact person<br />
in each country, who assists the secretariat e.g. in project counselling and dissemination<br />
of information.<br />
<strong>The</strong> Euregio Karelia neighbouring area programme. Based on the Interreg <strong>III</strong>A Karelia<br />
programme implemented in 2001-2004, which was turned into a neighbouring area programme<br />
in the autumn of 2004. <strong>The</strong> programme area comprises the provinces of North<br />
Ostrobothnia, Kainuu and North Karelia and the Republic of Karelia. <strong>The</strong> aim of the programme<br />
is to develop cooperation between firms, to promote culture and to make border<br />
crossing safer and more flexible. <strong>The</strong> <strong>Region</strong>al Council of Oulu has administrative and<br />
financial responsibility for the project, and the programme secretariat is based in Oulu.<br />
<strong>The</strong> Kolarctic Neighbouring Area Programme. <strong>The</strong> programme area covers the northern<br />
parts of Finland, Sweden, Norway and Russia. <strong>The</strong> aim is to boost the region’s ability to<br />
accept large international investments by making use of special competence in the region,<br />
and to strengthen the cooperation structures that are already in place. Administratively, the<br />
programme continues to be part of the Interreg <strong>III</strong>A North Programme. Auxiliary staff is<br />
based in the Norrbotten county government, the Finnmark provincial government and the<br />
regional administration in Murmansk.<br />
2007-2013 Programme Period<br />
<strong>The</strong> preparation of the 2007-2013 programme period is currently under way. <strong>Region</strong>al<br />
differences in the degree of development will increase significantly due to the EU’s expansion<br />
to the east. In the future member states, average GNP is less than half of that in<br />
the current member states. <strong>The</strong> average GNP in the EU as a whole will thus shrink by<br />
12.5%. This means that the emphasis of regional development problems will shift to eastern<br />
Europe, resulting in gradual diminishing of the funding given to old member states.<br />
Targeting funds as efficiently as possible will thus become increasingly important.<br />
(Sisäasiainministeriö, 2004)<br />
7.1.2 Organisations taking part in project coordination<br />
Barents Euro-Arctic Council (BEAC). A foreign-ministry level forum for cooperation in<br />
the Barents <strong>Region</strong>. BEAC has seven members: Finland, Sweden, Norway, Denmark,<br />
Russia, Iceland and the European Commission. <strong>The</strong> aim of the regional council (BEARC)<br />
consisting of leaders of counties and provinces as well as representatives of indigenous<br />
peoples in the Barents <strong>Region</strong> is to engage in development work on regional level. Working<br />
groups formed by the councils are responsible for strengthening cooperation and implementing<br />
projects. Cooperation is constantly being developed so as to include more sectors,<br />
such as economic cooperation, health and social affairs, energy and the environment,<br />
rescue cooperation, forests and timber, traffic and transport, customs cooperation, youth,<br />
education and research. <strong>Region</strong>al working groups focus on issues related to energy, health,<br />
infrastructure, IT, communications, culture, environment, youth, indigenous population<br />
and education.
63<br />
Norway’s Barents Secretariat and Institute. A secretariat under the administration of the<br />
counties of Finnmark, Troms and Nordland. Its task is to provide consult services in connection<br />
with Interreg projects and other projects, to coordinate them and to give assistance<br />
to the Barents <strong>Region</strong>al Council and Norwegian authorities. <strong>The</strong> secretariat is responsible<br />
for the practical implementation of each Barents programme as defined by the regional<br />
council. <strong>The</strong>re are plans to turn the Barents Institute, which is working in close cooperation<br />
with the secretariat, into a major research centre of future Barents cooperation.<br />
Sweden’s Barents Secretariat. <strong>The</strong> Secretariat, administered by the counties of Norrbotten<br />
and Västerbotten and the Foreign Ministry, was founded in 2004 with the intention of<br />
making Swedes participate more actively in Barents cooperation.<br />
<strong>The</strong> North Calotte Council. <strong>The</strong> Nordic Council of Ministers funds the operation of the<br />
North Calotte Council. Its operation involves cross-border cooperation with authorities<br />
responsible for regional policy and representatives of the business sector. <strong>The</strong> Council’s<br />
work is implemented in the form of projects involving e.g. culture and the environment.<br />
<strong>The</strong> Council also grants match funding to Interreg projects.<br />
<strong>The</strong> University of Lapland’s Arctic Centre. <strong>The</strong> Arctic Centre conducts multidisciplinary<br />
research, carries out projects services etc. Research focuses on three areas: global change<br />
(global economy, natural resources, climate change), sustainable development as well as<br />
environmental and minority law.<br />
Finnbarents. An organisation administered by the University of Lapland and Rovaniemi<br />
Polytechnic, which provides consultation and project planning services primarily for the<br />
needs of cooperation between Lapland and Murmansk. <strong>The</strong> organisation has e.g. participated<br />
in several Kolarctic and Interreg <strong>III</strong>A North programmes.<br />
<strong>The</strong> Kvarken Council and the MittSkandia Association. <strong>The</strong> Kvarken Council is a Finnish-<br />
Swedish cooperation organisation under the administration of the region’s provinces and<br />
counties, which acts as a project coordinator in university, transport and communication,<br />
culture, food, environment and tourism projects. MittSkandia aims at promoting cooperation<br />
between Västerbotten and Helgeland in Norway with the aid of similar projects. <strong>The</strong><br />
organisations are also active participants in the Interreg Kvarken-MittSkandia programme.<br />
Arctic Council. A forum of cooperation of governments of northern countries (Canada,<br />
Denmark, Finland, Iceland, Sweden, Norway, Russia and the United States) and representation<br />
of indigenous peoples. <strong>The</strong> organisation implements projects aimed at promoting<br />
economic, social and, above all, environmental protection development in the Arctic regions.<br />
7.2. Completed and ongoing surveys and projects related to road<br />
traffic development<br />
7.2.1 General<br />
In the following review, surveys and major projects limited to the Barents <strong>Region</strong>, looking<br />
at it from the viewpoint of road traffic, have been divided into five categories:
64<br />
1. corridor and leg surveys,<br />
2. surveys aimed at supporting tourism development,<br />
3. traffic safety projects,<br />
4. logistics surveys and<br />
5. administrative and road technology cooperation.<br />
<strong>The</strong> review includes surveys commissioned by the county governments of Norrbotten and<br />
Västerbotten: an analysis of the deficiencies of the E12 road due to the reformed guidelines<br />
for TEN networks that emphasise the importance of an east-west transport network<br />
and the topical nature of new TEN projects, and road network surveys aimed at serving<br />
the needs of tourism development.<br />
7.2.2 Corridor and leg surveys<br />
Ministry of Transport and Communications of Finland. <strong>The</strong> Oulu-Karelia-<br />
Arkhangelsk-Komi Corridor – Pre-study (1995)<br />
<strong>The</strong> corridor development programme has been divided into three priority groups. <strong>The</strong><br />
first of these was to be implemented in 1995-1997, the second in 1998-2000 and the third<br />
from 2001 onwards. In the case of road transports, the plan was as follows:<br />
Phase 1 1995-1997<br />
i. City of Arkhangelsk traffic planning<br />
ii. Maintenance and improvement surveys for the Kuusamo-Loukhi and Juntusranta-<br />
Kemi legs.<br />
iii. Maintenance and improvement survey for the Vartius-Kochkoma leg<br />
iv. Survey of the management of maintenance in the Archangelsk region<br />
v. Road service survey in the Republic of Karelia (fuel distribution, accommodation,<br />
road signage, weather forecasts)<br />
Phase 2 1998-2000<br />
i. Survey on the Oulu-Karelia-Arkhangelsk-Komi legs<br />
ii. Improvement of the Paltamo-Vartius road<br />
iii. <strong>The</strong> Kotlas bridge over the Malaya Severnaja Dvina river, survey; a survey of the<br />
Kotlas-Velsk bypass road<br />
iv. Survey of the Kargopol-Pudozh-Wytegra legs<br />
Phase 3 2001 <br />
i. Construction of the Oulu-Karelia-Arkhangelsk-Komi road connection in accordance<br />
with the survey<br />
ii.<br />
iii.<br />
Construction of the Kotlas bridge in accordance with the survey<br />
Construction of the Kargopol-Pudozh-Wytegra road connection in accordance with<br />
the survey<br />
<strong>Region</strong>al Council of Lapland et al. <strong>The</strong> Barents Corridor – Transportation Development<br />
Needs; Prerequisites for Economic Cooperation (1995)<br />
As far as road transports are concerned, development of the border-crossing point in Salla<br />
for the needs of international transport as well as improvement of the border roads in Salla<br />
and Rajajooseppi/Lotta was suggested in the plan. After the survey was published, im-
65<br />
provement work has been carried out on the Lotta-Murmansk road, but the road from the<br />
Finnish border to Alakurtti is still in need of paving. Work on the Salla border crossing<br />
point has been completed on both sides of the border.<br />
Finnmark fylkeskommune et al. Kommunikasjoner Nord-Norge – Nordvest<br />
Russland; Utredning med handlingsplan (2000)<br />
In the survey, road connections were deemed to be of adequate quality in view of current<br />
transport volumes, but customs operations and border crossings were seen as posing a<br />
problem. A proposal was made to raise the standard of the E6 road for long-distance<br />
transports, so that road transports to the Murmansk area could use the shortest route via<br />
Norway instead of going via Finland/Sweden.<br />
Utvecklingsprogram för fjällregionen inom MittSkandia (1999-)<br />
A joint Swedish-Norwegian project aimed at developing the fjell areas of Västerbotten<br />
and Nordland in order to curb the negative population trend. Within the framework of the<br />
project, a development need survey was conducted in 2000, in which the following development<br />
areas in the road sector were presented:<br />
• E12: the Umskaret tunnel, various improvements, making it part of the TEN network<br />
• Road nr 1088, “Sagavägen”, Kittelfjäll-Hattfjelldal: reconstruction of about 60 km<br />
• Roads nr 73 and 1116, Kruttfjellsvägen, reconstruction 12+23 km<br />
• In addition, improvement of standard on the following roads: E6, Rv 45, 363 and<br />
987.<br />
For more information, see<br />
http://www.ac.lst.se/planeringochboende/aktuellaprojekt/fjallregionen/<br />
Perämerenkaari-yhdistys. Perämerenkaaren liikennejärjestelmä 2001(2001)<br />
A plan aimed at the development of the main road (E75, E4, E8 Piteå-Kalajoki) running<br />
along the Bothnian Arc. <strong>The</strong> starting premises for drawing up a joint target standard for<br />
the road were the following:<br />
• meeting and overtaking is safe (stretches of road with four lanes; overtaking lanes)<br />
• pedestrian and bicycle traffic separated from car traffic<br />
• a uniform geometric minimum standard<br />
• a uniform speed limit level<br />
• uniform level of signage, road-side services and telematics<br />
Länsstyrelsen i Västerbotten et al. På Tvärsen (2004)<br />
A preliminary survey of the improvement needs of the Swedish leg of the E12 road between<br />
Mo i Rana and Umeå. An analysis of the deficiencies on this leg has been conducted,<br />
and improvements have been suggested (overtaking lanes, improving safety at<br />
intersections, improving visibility by removing vegetation etc.) <strong>The</strong> survey acknowledges<br />
the crucial importance of the road as a corridor from Norway via Sweden to Finland and<br />
Russia, and its significance to the business sector in northern Sweden. Furthermore, the<br />
importance of making the road part of the TEN network is emphasised. As an example of<br />
concrete measures, the Umskaret tunnel, to be completed in 2006, will contribute towards<br />
preventing breaks in connections on this leg that are common, especially during the winter.<br />
http://www.ac.lst.se/kommunikationer/dokumentatthamta/rapporter
66<br />
Charting the effects of the new Ivalo-Kirkkoniemi road connection (2004-2005)<br />
<strong>The</strong> municipalities of Inari and Sör-Varanger will commission a survey of the effects of<br />
the connection between Nellim in Inari and the Pasvik valley in Norway. <strong>The</strong> report is<br />
scheduled to be completed in the summer of 2005. Finland and Norway have set up a joint<br />
guidance group for the project. If completed, the road connection is believed to serve the<br />
needs of fishing and mining industry and to promote tourism by the Arctic Ocean. <strong>The</strong><br />
survey focusing on the Finnish part of the road that was completed in March 2005 states<br />
that “opening of the new road connection would have a positive impact on the development<br />
of northern Lapland, the North Calotte and the Barents <strong>Region</strong>”. (Lapin liitto,<br />
2005b)<br />
Mittskandia Tvärkommunikationer (2004-2007)<br />
<strong>The</strong> crosswise traffic effects of the Umskaret tunnel to be completed on the E12 road are<br />
being charted. <strong>The</strong> project will produce a basic survey of future transport possibilities for<br />
the use of traffic authorities and tourism entrepreneurs.<br />
7.2.3 Surveys aimed at supporting tourism development<br />
Itä-Suomen Matkailun kehitys Oy / Matkailun koulutus- ja tutkimuskeskus. Luoteis-<br />
Venäjän matkailun puiteohjelma (1999)<br />
Within the framework programme, the following tourism development measures in northwestern<br />
Russia were defined:<br />
i. Increasing the amount of information about marketable tourism possibilities<br />
ii. Raising the profile of spearhead sites and services, their productification for western<br />
tourists<br />
iii. Strengthening competence and cooperation within the tourism industry<br />
iv. Improving the basic tourism infrastructure<br />
On a general level, the report proposed e.g. the development of a tourist guide to northwestern<br />
Russia and an Internet portal for tourism. Among various tourism products, e.g.<br />
the definition of tourism roads and routes in the area was suggested. Deficiencies in road<br />
signage were seen as a bottleneck for land traffic, especially in view of the needs of foreign<br />
tourists travelling by car, in addition to problems related to border crossing and customs<br />
formalities.<br />
Länsstyrelsen i Västerbotten. En studie av transportsystemets funktion för rese- och<br />
turistnäringen i Västerbottens län (2001)<br />
<strong>The</strong> results of the report were used as background information of the STBR’s tourism road<br />
project. In the report, the transport network in Västerbotten was analysed from the viewpoint<br />
of the needs of the tourism industry. As far as the road network is concerned, the<br />
following legs were identified as being important starting points for development:<br />
• E4 Central Europe-Stockholm-Umeå-Skellefteå-Haparanda: an important link for<br />
long-distance tourism<br />
• E12 Vaasa-Umeå-Lycksele-Mo i Rana: an important link for tourism<br />
• <strong>The</strong> Rv 45 road Göteborg-Östersund-Dorotea-Vilhelmina-Storuman-Sorselenorthern<br />
Norway: an important link for long-distance tourists to the fjell region, particularly<br />
in the summer
67<br />
• <strong>The</strong> Rv 95 road Skellefteå-Boliden-Arvidsjaur-Arjeplog-Bodö: an important link for<br />
long-distance tourists to the north of the country, particularly in the summer<br />
• Road nr 363 Umeå-Vindeln-Ammarnäs: a scenic road well suited for tourism<br />
• Road nr 1088 etc. Sagavägen, Örnsköldsvik-Hattfjelldal: small-scale services and<br />
sights for tourists<br />
• Road nr 1116 Kruttfjellsvägen, Tärnaby-Hattfjelldal: link to the E6 road on the<br />
Norwegian side, enables making a tour on both sides of the border<br />
http://www.ac.lst.se/kommunikationer/dokumentatthamta/rapporter<br />
Länsstyrelsen i Norrbottens län.<br />
A survey of the road network in Norrbotten county corresponding to the survey in Västerbotten<br />
presented above. <strong>The</strong> following legs were seen as being the most important in terms<br />
of improvement measures:<br />
• <strong>The</strong> Lv 374 road N Storfors-Ottostorp: bus and car traffic to the Storforsen hotel and<br />
camping area<br />
• <strong>The</strong> Rv 95 road about 15 km east of Arjeplog: bus and car traffic to Arjeplog<br />
• <strong>The</strong> Rv 45 road north and south from Jokkmokk: bus and car traffic<br />
• <strong>The</strong> E10 road about 15 km east from the Norwegian border: passengers arriving by<br />
air and train continue their journey by bus/car to the ski centres of Riksgränsen/Björkliden/Abisko.<br />
• <strong>The</strong> Rv 99 road south from Kuivakangas: bus and car traffic to the river valleys<br />
All in all, about 20 stretches of road are mentioned in the report that are in need of improvement<br />
measures. <strong>The</strong> report was used as background information of the STBR’s tourism<br />
road project.<br />
http://www.bd.lst.se/publishedObjects/10000915/turistvagar.pdf<br />
7.2.4 Traffic safety projects<br />
Barents <strong>Region</strong> traffic safety cooperation (1996-)<br />
In 2003, the working group on traffic safety published a basic report of the traffic safety<br />
situation in the region. In the report, the basis of traffic safety work is presented, traffic<br />
safety visions, organisations and expectations in the countries are compared, and suggestions<br />
are made as to future areas of emphasis, organisation and separate funding. It was<br />
found that there are differences between the countries in traffic safety behaviour and organisation<br />
of traffic safety work. In the basic report, the following were proposed as areas<br />
of priority in terms of future measures:<br />
• children and traffic<br />
• monitoring of heavy traffic<br />
• alcohol and drugs in traffic<br />
• winter maintenance<br />
• driver education<br />
• analysis of traffic accidents<br />
In 2004, the Barents <strong>Region</strong> Traffic Safety Plan for 2004-2007 was completed. In the plan,<br />
the areas of priority are looked at in more detail. <strong>The</strong> following were suggested as concrete
68<br />
measures: charting the driver education curricula in different countries and harmonising<br />
their level; harmonisation of winter maintenance practices (setting up a website aimed at<br />
improving the exchange of information, learning from best practices in neighbouring<br />
countries), gathering information on alcohol and drug use in different countries, special<br />
traffic monitoring operations during weekends; harmonisation of load and weight regulations<br />
for heavy traffic, a joint education project aimed at heavy traffic operators; gathering<br />
and analysing accident statistics in the Barents <strong>Region</strong> on an annual basis.<br />
Development of Traffic Management Sector in Murmansk <strong>Region</strong> in CBC / Multiprofessional<br />
traffic safety work (2003-)<br />
<strong>The</strong> joint project between the Lapland Road District, county government and regional authorities<br />
from the Murmansk area aims at promoting traffic safety cooperation between the<br />
two countries through concrete measures. During the project, the following measures have<br />
been implemented, among others: training has been arranged for key persons responsible<br />
for traffic safety in the Murmansk region, info boards aimed at assisting professional drivers<br />
have been set up at the border-crossing posts of Salla and Lotta, a preliminary plan<br />
concerning the placing of signs, information boards and services aimed at road users has<br />
been drawn up, a campaign promoting the use of reflectors and seatbelts has been carried<br />
out, and a website maintained by the Murmansk area traffic police has been set up<br />
(http://www.gaimo.ru).<br />
In the future, cooperation will focus on the organisation and development of small-scale<br />
traffic education measures and campaigns.<br />
For more information, see<br />
http://www.laaninhallitus.fi/lh/lappi/kvasiat/home.nsf/pages/7C43F08541D4DBAFC2256<br />
EFD0047775E<br />
7.2.5 Logistics surveys<br />
Länsstyrelsen i Norrbottens län et al. Masterplan för logistik och infrastruktur på<br />
Nordkalotten (2000)<br />
On a general level, the plan proposes that the general standard of the road network be<br />
raised in the North Calotte area; raw material transports suffer due to the poor standard of<br />
the roads and poor maintenance (some stretches of road are closed off during the winter)<br />
etc. In Norway, construction of a continuous north-south road connection serving transport<br />
needs and a road to Lofoten in the west are proposed.<br />
Logistik och transport Rana-Umeå (2001-2005)<br />
Charting and analysing logistics and transports on the E12 road between Mo i Rana and<br />
Umeå. <strong>The</strong> aim of the project is to generate information for regional authorities as well as<br />
transport companies and others on e.g. new, competitive logistics solutions, to enable larger<br />
transport volumes and to look for concrete solutions to the problems of cross-border<br />
transports.<br />
Logsa – Logistisen verkoston ja kuljetusten kilpailukyvyn kehittäminen Sallan käytävällä<br />
(2002-2006)<br />
<strong>The</strong> aim of the project is to generate information about the route from the ports of Kemi<br />
and Tornio to Murmansk and Arkhangelsk, to chart the development needs of the route
69<br />
and to initiate investments needed for opening the route. <strong>The</strong> project follows up on an earlier<br />
project, in which the plan Development of Logistic Network And Transport in the Salla<br />
Corridor – Study Plan (Meri-Lappi Instituutti, 2001) was drafted to chart research information.<br />
For more information, see http://www.ulapland.fi/?deptid=15942<br />
County Administrative Board of Norrbotten et al. <strong>The</strong> Logistics System in the Barents<br />
<strong>Region</strong> – Pre-study (2005)<br />
<strong>The</strong> report provides an overview of the logistics situation in the Barents <strong>Region</strong> as well as<br />
suggestions concerning further study. For road transports, the report proposes the compilation<br />
of topology of the transport network and terminals in the Barents <strong>Region</strong>. <strong>The</strong> system<br />
would include a compilation of data on companies, providers of logistics services, mail<br />
delivery points on municipality level and up-to-date information on the road network. <strong>The</strong><br />
database would enable optimal definition of resource needs, prediction of transport times<br />
and development of fixed routes. <strong>The</strong> work was carried on within the framework of the<br />
STBR’s Terminal Study in 2004-2005.<br />
http://www.barentsinfo.fi/stbr/down.asp?id=250&file=STBR_Logistics_PreStudy_Report.<br />
pdf<br />
7.2.6 Administrative and road technology cooperation<br />
Vägverket <strong>Region</strong> Norr. Behovet av Trafikinformation och en gemensam webbplats,<br />
Bartic Web, för gränsöverskridande transporter i Barentsregionen – Kvalitativ<br />
marknadsundersökning (2002).<br />
Cooperation between the traffic information centres in Luleå, Mosjöen, Rovaniemi and<br />
Oulu was launched in 1998. Its aim was to develop dissemination of information serving<br />
cross-border traffic in order to improve traffic safety and increase the efficacy of transports.<br />
In the surveys conducted, the interest and need expressed by transport companies<br />
towards setting up an Internet portal was studied. <strong>The</strong> website would provide up-to-date<br />
information on road and weather conditions, congestion etc. Based on the surveys, it was<br />
found that there is a need for future development of the projects.<br />
http://www.barentsinfo.fi/stbr/down.asp?id=167&file=Rapport-Bartic%20Web.pdf<br />
Nordisk gruppe for vintertjeneste. Nordiskt vintersamarbete – Statusrapport<br />
2003(2003)<br />
<strong>The</strong> report provides a review of studies and surveys (mainly on road technology) related to<br />
winter road maintenance in the Nordic countries. Examples of ongoing projects include<br />
the development of weather forecasts, development of an automatic warning system of<br />
slippery road conditions, planning of tools aimed at defining the most cost-efficient road<br />
maintenance standard and the impact of road salt on the environment, vehicle brake systems,<br />
alternative means of combating slippery roads etc. In addition, training is ongoing in<br />
different countries aimed at personnel responsible for winter road maintenance.<br />
http://www.vv.se/filer/publikationer/statusrapport2003.pdf<br />
Northwest Russian Road Management (2001-2004)
70<br />
A project supporting the development of road management and the road network in the<br />
Arkhangelsk region, coordinated by Finnroad and authorities in Arkhangelsk province.<br />
<strong>The</strong> project consisted of the following elements: development and implementation of<br />
computer-aided systems for road management, road geometry measurements, a pilot project<br />
aimed at development of weather data services, administrative and operative issues,<br />
financing of road management as well as staff training and seminars.<br />
Technical reports produced during the project: http://www.ador.ru:8101/about/report/<br />
<strong>The</strong> Roadex Project (1998-2005)<br />
A joint project of the road districts in the northern periphery regions, focusing on the exchange<br />
of experiences on road technology and development of uniform operating practices.<br />
<strong>The</strong> most important theme of the project is maintenance of the northern road network<br />
and roads with little traffic. <strong>The</strong> first phase of the project was completed in 2001,<br />
and the following reports were published as a result: Road Condition Management of Low<br />
Traffic Volume Roads in the Northern Periphery (2000), Road Condition Management in<br />
the Northern Periphery (2001), and Winter Maintenance Practice in the Northern Periphery<br />
(2001). During the first phase of the project, the carrying capacity of the roads, weight<br />
restriction problems typical of northern regions as well as new winter maintenance methods<br />
were studied.<br />
<strong>The</strong> second phase of the project comprised the following three stages:<br />
i. Identifying problems, field study<br />
ii. Analysing problems; identifying their causes<br />
iii. New innovations,<br />
and it produced the following reports:<br />
• Socio-economic impacts of road conditions on low volume roads<br />
• Dealing with bearing capacity problems on low volume roads constructed on peat<br />
• Permanent deformation related to freeze-thaw cycles<br />
• New material treatment techniques<br />
• Managing spring thaw weakening on low volume roads<br />
• Drainage on low traffic volume roads<br />
• Environmental guidelines<br />
• Environmental guidelines, pocket book<br />
• User Perspective to Roadex II Test Areas’ Road Network Service Level, Results of<br />
a Questionnaire Study on Road Network Condition and the Use of Roads<br />
For more information, see http://www.roadex.org
71<br />
8. New project ideas<br />
Within the STBR project, studies on Barents <strong>Region</strong> traffic infrastructure, traffic and related<br />
operations have mainly been conducted. <strong>The</strong>re are plans to launch an STBR 2 project,<br />
which would include more concrete measures than its predecessor. That is why this<br />
part of the report focuses on identifying practical projects within the Barents <strong>Region</strong><br />
transport sector based on earlier reports presented here. Practical projects could include<br />
the following: arranging seminars, drawing up plans (e.g. road plan), launching pilot projects,<br />
assisting the opening of crosswise traffic connections, assisting joint projects and<br />
improving or constructing connecting legs/providing support to projects. <strong>The</strong> word “concrete”<br />
can thus be understood on many different levels. What is concrete to an EU official<br />
is seen as something quite different by the road master in a small municipality!<br />
However, in terms of project ideas, besides concrete projects also potential targets of<br />
charting and study are proposed, which could attract more extensive interest outside the<br />
Barents region, e.g. on EU level. <strong>The</strong> aim has been to come up with new project ideas that<br />
have not been made or proposed in connection with earlier Barents <strong>Region</strong> projects.<br />
STBR 1st phase Other cross-border projects <strong>Future</strong> aspects and trends<br />
+<br />
Stated development needs<br />
from the projects<br />
-<br />
Already realised projects<br />
and suggested projects<br />
+<br />
Geographical view<br />
- Industry<br />
- Spatial development<br />
- Demographic changes<br />
+<br />
Cluster view<br />
- Different industries<br />
New project topics/ideas<br />
for STBR II<br />
Image. <strong>The</strong> birth process of project ideas.<br />
Through the STBR I, it was observed that there is a need for at least the following concrete<br />
projects:<br />
‣ Education and informing aimed at drivers in heavy traffic<br />
‣ Harmonisation of heavy traffic weight limit measurements and restrictions (cooperation)<br />
‣ Integrating traffic safety into companies’ quality systems (development + pilot) +<br />
rewarding companies (a common practice in the region?)<br />
‣ Drawing up a plan on alternative routes for main roads in case of accidents involving<br />
dangerous substances<br />
‣ Making a risk analysis concerning transports of dangerous substances on the main<br />
roads in the Barents <strong>Region</strong>
72<br />
‣ Mobile tourism road (the Blue Road, Barents Road, Northern Lights Road) in cooperation<br />
with device manufactures in the Barents <strong>Region</strong>. Cooperation with geographical<br />
information projects in the Barents <strong>Region</strong> is of key importance.<br />
‣ Developing international tourism road packages (airplane, car, airplane) and product<br />
content definition. A pilot project for the Blue Road, Barents Road or the<br />
Northern Lights Road. A joint project with the organisation responsible for tourism<br />
roads. International marketing via incoming travel bureaus, Internet portal and<br />
booking, car rental, definition of operational content, possible scenarios for cooperation<br />
etc.<br />
‣ Development/launching of adventure bus tourism in the Barents <strong>Region</strong>; preliminary<br />
report on development of adventure bus tourism in Finnish Lapland will be<br />
completed in October 2005.<br />
‣ Launching of cooperation aimed at defining the tourism road network in the Barents<br />
<strong>Region</strong>, drawing up common rules of play, setting up a working group and arranging<br />
a meeting together with parties who make decisions on national tourism<br />
roads.<br />
‣ Arranging a seminar aimed at developing methods used in gathering statistical data<br />
for tourism purposes. <strong>The</strong> meeting should be followed up by development of<br />
common methods used for gathering statistical information.<br />
‣ Tourism destination study in the Barents <strong>Region</strong>. In cooperation with national<br />
tourism development organisations and studies conducted by them (e.g. interviews<br />
at borders).<br />
Needs/ideas on possible new Barents <strong>Region</strong> transport projects that have come up in the<br />
course of work or by studying trends:<br />
‣ Projects aimed at joining road registers. Possibilities of joining road register data<br />
describing the condition of the roads. <strong>The</strong> effects of road quality on business transports<br />
(gross capacity classes in Sweden, weight restrictions in Finland and Norway,<br />
in addition to periods of frost damage + wintertime restrictions).<br />
‣ <strong>The</strong> effect of road type (width, type) on driving behaviour in the Barents <strong>Region</strong>.<br />
Heavy traffic is a particular target in this respect; transports go through several<br />
countries and types of road. Comparison and analysis of road types, psychological<br />
interview studies and accident statistics. Recommendations on measures aimed at<br />
improving heavy transport safety. <strong>The</strong> study may provide background material for<br />
guiding transport streams in the Barents <strong>Region</strong>.<br />
‣ Providing guidance to tourists arriving in the Barents <strong>Region</strong> by car (identified by<br />
car register plate) on local traffic culture. Pilot experiment could involve providing<br />
information on the behaviour of reindeer on the road with the aid of mobile devices<br />
(e.g. GSM, Bluetooth tag, WLAN) to drivers of foreign vehicles arriving in<br />
the reindeer-husbandry area. Behind this idea is the susceptibility of drivers coming<br />
from outside the area to get into accidents with animals.<br />
‣ Preconditions for international pleasure boating in the Barents <strong>Region</strong>. Project<br />
aimed at developing small harbours in the Russian Barents <strong>Region</strong>. Eliminating<br />
practical obstacles and drawing up development plans, all the way to the level of<br />
harbour plans. Organising the Arctic Ocean Race around the Barents <strong>Region</strong>.<br />
‣ Road pricing in the Barents <strong>Region</strong>. New forms of financing for implementing<br />
traffic projects in the Barents <strong>Region</strong>. Taking into consideration the financing
73<br />
means and prospects developed in the EU. Part of the traffic infrastructure policy<br />
programme of the Barents <strong>Region</strong> (presented below)<br />
‣ Measures by society aimed to impact transport streams (the entire Barents <strong>Region</strong><br />
seen as one traffic area)<br />
1) Analysis of the consequences of and alternatives to different means; various<br />
scenarios<br />
• Taxes, fees, tariffs<br />
• Transport subsidies<br />
• Other types of subvention<br />
2) Strategy plan and proposals for measures<br />
3) A high-level lobbying group to promote the implementation of possible<br />
measures – to ensure that something really does happen<br />
‣ ”Substance to the Barents Euroarctic Transport Area Cooperation regarding Infrastructure<br />
Development Plans”<br />
• A report for the traffic infrastructure strategy (image)<br />
Barents transport infrastructure policy programme<br />
New winds?<br />
Visions!<br />
Scenarios!<br />
• More comprehensive infrastructure policy<br />
•New forms of financing; e.g. ”regional earmarking<br />
from regional fuel tax revenue??? Road funds???<br />
•Joint projects<br />
Insufficient budget funds<br />
for the north<br />
EU<br />
Central administration<br />
BEATA<br />
<strong>Region</strong>al administration<br />
Business-sector potential<br />
• Oil and gas<br />
• Mining<br />
• Tourism etc. etc. …
74<br />
References<br />
Literature references<br />
Arctic Council. 2002. Sustainable Reindeer Husbandry.<br />
Finansdepartementet. 2005. Enhetlig eller differentierad mervärdesskatt?<br />
Finansdepartementet. 2004. Skatt på väg.<br />
Finnmark fylkeskommune. 2003. Ressurs RIK region Finnmark 2004-2007 – <strong>Region</strong>alt<br />
utviklingsprogram.<br />
Joensuun yliopisto. Karjalan tiedekeskus. 2005. Karjalan tasavalta vuonna 2004 – Puolivuotiskatsaus.<br />
Kainuun liitto. 2005. Luonnos 4.4.2005. Kainuun Venäjä-liiketoiminnan strategia 2005-<br />
2012.<br />
Karhunen P., Kosonen R. 2003. Kuolan niemimaa opettelee markkinataloutta.<br />
Lapin liitto. 2005a. Eläköön Lappi – Lapin maakuntasuunnitelma 2020.<br />
Lapin liitto. 2005b. Luonnos 19.8.2005. Pohjois-Lapin maakuntakaavan liikenneselvitys.<br />
Lapin yliopisto. Kuolan tiedekeskus. 2005. Murmanskin lääni vuonna 2004 – Taloudellinen<br />
puolivuotiskatsaus.<br />
Layton, I. G. 1999. <strong>Trends</strong> and Prospects within the Forest Sector in Norrbotten and the<br />
Arkhangelsk Oblast.<br />
Liikenne- ja viestintäministeriö. 2005a. Raskaan tieliikenteen turvallisuustilanne ja tutkimustarvekartoitus.<br />
Liikenne- ja viestintäministeriö. 2005b. Rautatiekuljetusten kilpailukyky Suomessa.<br />
Liikenne- ja viestintäministeriö. 2005c. Ulkomaankaupan suuryksikkökuljetusten liikenneyhteydet.<br />
Liikenne- ja viestintäministeriö. 2003. Liikenneväyläpolitiikan linjauksia vuosille 2004-<br />
2013.<br />
Logisforum. 2002. Oulun seudun ja sen tausta-alueen yritysten logistiset tarpeet 2002.<br />
Lähteenmäki-Smith, K. 2002. Pohjoismainen aluehallinto ja sen uudistuspaineet.<br />
Länsstyrelsen i Norrbottens län. 2003. Norrbotten framåt 2015 – Arbetsmarknad, befolkning<br />
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75<br />
Länsstyrelsen i Norrbottens län. 2000. Masterplan för logistik och infrastruktur på Nordkalotten.<br />
Länsstyrelsen i Västerbottens län. 2005. <strong>Region</strong>alt tillväxtprogram 2004-2007.<br />
Ministry of Transport and Communications Finland. 2004.] Differences in taxation on<br />
heavy goods vehicles in Europe.<br />
Ministry of Transport and Communications Finland. 2003. Freight Transport Information<br />
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Nordland fylkeskommune. 2005. Utviklingstrekk for Nordland. Vedlegg til Fylkesplan for<br />
Nordland 2004-2007.<br />
Nordland fylkeskommune. 2001. “Gull og grønne skoger” – Ny næring i mineraler.<br />
Norsk Marinteknisk Forskningsinstitutt. 2001. Inspill till nasjonal transportplan för å<br />
ivareta sjøtransportens plass i denne, samt å få belyst Nærskipsfartens potensiale overfor<br />
politikerne.<br />
Nutek. 2004. Transportbidraget. En analys av motiv, effekter och alternativ.<br />
Näringsdepartementet. 2003. Testverksamhet m.m. i övre Norrlands inland.<br />
Olje- og energidepartementet. 2003. Utredning av konsekvenser av helårig<br />
petroleumsvirksomhet i området Lofoten. Barentshavet. Sammendragsrapport.<br />
Ratahallintokeskus. 2005. Vähäliikenteisten ratojen tulevaisuusselvitys.<br />
Regeringskansliet 2004. Länsvisa redovisningar. Tillväxtområden och hinder för tillväxt<br />
jämfört med RTP.<br />
Regeringskansliet 2003. Översyn av farledsavgifterna.<br />
Samferdselsdepartementet. 2005. Lavutslippssoner i norske byer - miljørestriksjoner på<br />
tunge kjøretøy.<br />
Sikow-Magny, C. DG TREN. 2005. Trans-European transport network. Pan-European<br />
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Sisäasiainministeriö. 2004. Taustamuistio 23.6.2004. Komission kolmas koheesioraportti;<br />
Esitys EU:n alue- ja rakennepolitiikkauudistuksen päälinjoista kaudelle 2007-2013.<br />
Sosiaali- ja terveysministeriö. 2005. Sosiaaliturvamaksukokeilun vaikutus työllisyyteen.<br />
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för godstransporter.<br />
Statens institut för kommunikationsanalys. 2002. Nya banavgifter? Analys och förslag.
76<br />
Statistisk sentralbyrå. 2005. Fiskeristatistikk 2002-2003.<br />
Sustainable Transport in the Barents <strong>Region</strong>. 2005. Passenger and Freight Flows in the<br />
Barents <strong>Region</strong>.<br />
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Norge og mellom Norge og utlandet.<br />
Troms fylkeskommune. 2003. Kompetansesamfunnet Troms – Fylkesplan for 2004-2007.<br />
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Utenriksdepartementet. 2003. Mot nord! - Utfordringer og muligheter i nordområdene.<br />
Valtioneuvoston kanslia. 2004. Toimintaedellytysten turvaaminen Itä-Lapissa ja Keminjärvellä.<br />
Valtioneuvoston kanslia. 2000. Alueellinen kehitys ja aluepolitiikka Suomessa (2000)<br />
Valtion tieteellinen tutkimuslaitos. 2004. Liikenteen hinnoittelu. Kokemuksia, tutkimustarpeita<br />
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Zimin, Dmitry. 2004. Russian Karelia: <strong>Future</strong> Scenarios till 2015.
More information on STBR – Sustainable Transport in the Barents <strong>Region</strong>:<br />
STBR Homepage<br />
http://www.barentsinfo.org/stbr/<br />
STBR Management Group:<br />
Bo-Erik Ekblom<br />
Länsstyrelsen i Norrbottens län, Luleå<br />
Tel:+46 920 961 51 Fax:+46 920 23 10 92<br />
bo-erik.ekblom@bd.lst.se<br />
Tuomo Palokangas<br />
Pohjois-Pohjanmaan liitto, Oulu<br />
Tel:+358 8 3214 023 Fax:+358 8 3214 055<br />
tuomo.palokangas@pohjois-pohjanmaa.fi<br />
Per Munkerud<br />
Nordlands fylkeskommune, Bodø<br />
Tel: +47 755 31351 Fax: +47 75 65 00 01<br />
per.munkerud@nfk.no<br />
STBR Secretariat<br />
c/o Petri Mononen<br />
Liidea Ltd. Kirkkokatu 2, 90100 Oulu, Finland<br />
Tel:+358 8 8810 308 Fax:+358 8 8810 340<br />
petri.mononen@liidea.fi