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July
19
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Bird Watching in Akureyri
Click on the picture to watch this audio slideshow about bird watching at Óshólmar, an area at the mouth of Eyjafjardará river just outside Akureyri in north Iceland, the largest Icelandic town outside the capital region. Not many tourists know about this attraction, which is perfect for a walk in the sun.
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Located just 40 minutes by car and six minutes from Keflavík International Airport, Sandgerdi (“Sandy Hedge”) is a growing town of 1,700 with a storied history and loads to see. Read this special promotion about the hidden secrets of one of Iceland's most charming seaside villages.
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08/02/2006 | 09:29
Heavy industry projects have low returns, displace jobs
The required return on investment of the hydroelectric power plant at Kárahnjúkar was too low said Ágúst Gudmundsson, chairman of Bakkavör on the current affairs program Kastljós (Spotlight) Tuesday, according to the Icelandic Broadcasting Service, RÚV. "I would have preferred that the money had been spent in a different way," he said.
According to its website, Bakkavör Group is "an international food manufacturing company of Icelandic origin specializing in chilled convenience foods" with 42 factories in 5 countries, employing 13,000 people, and an annual turnover in excess of £1 billion. It is listed on the Icelandic stock exchange. In Q3, 2005, its return on shareholder equity was 28.3%
In its latest financial statements, the annual report for 2004, the Icelandic National Power Company, Landsvirkjun, does not state the return on equity for its shareholders. During 2004, a year when Landsvirkjun claims it earned "record profits", Iceland Review calculates it to be 14.1%, only half of that of Bakkavör. In 2004, Landsvirkjun employed 287 people, and turnover amounted to slightly more than £100 million, ten times less than Bakkavör. Landsvirkjun is a cooperative which operates under a special charter from Althingi; it is owned by the Republic of Iceland (50%), the City of Reykjavík (44.5%) and the City of Akureyri (4.5%).
According to a model developed by the economist Thorsteinn Sigurlaugsson, the hydroelectric dam currently being constructed at Kárahnjúkar has close to 0% return on equity using many of the assumptions published by Landsvirkjun. If this is true, the owners of Landsvirkjun, the citizens of Iceland, are putting their capital at risk to build the dam at Kárahnjúkar without receiving any compensation. Others have also criticized the fact that Landsvirkjun is subsidized with tax credits and by the favorable interest rates which it receives as a state owned entity. Thorsteinn's model does not include the environmental costs.
In an interview with the weekly business section of Fréttabladid on Wednesday, Gylfi Zoega, professor of economics at the University of Iceland and Birkenbeck College, UK, claimed that the heavy industry projects in northeastern Iceland (ie, the hydroelectric dam at Kárahnjúkar and the Alcoa aluminum smelter it supplies) were the cause of the substantial problems currently being suffered by Iceland's export industries. "The root of the problem is the large-scale projects in the northeast of Iceland. At full employment, the decision to build an aluminum smelter does not create new jobs, it just adds another smelter [to the economy] and displaces other jobs," he said. "Jobs are being moved from other parts of the country to the northeast," said Gylfi. Gylfi said that if interest rates had not been raised in response to the expansion, inflation would have followed. Adopting the Euro would not solve these problems, said Gylfi, only make them manifest themselves in a different way.
Fréttabladid also reported Wednesday that foreign purchases of Icelandic securities had decreased in the last quarter of 2005, amounting to ISK 7.3 billion compared to ISK 43 billion the preceding year. Net purchases of shares dropped by 74%. The research department of KB-bank (Kaupthing) attributed the lower levels of foreign purchases to expectations of a weaker Icelandic króna and the substantial appreciation of Icelandic stocks last year. Expectations of a drop in the Icelandic króna had, nevertheless, been reduced recently in the wake of news of possible additional heavy industry projects, said Kaupthing.
According to its website, Bakkavör Group is "an international food manufacturing company of Icelandic origin specializing in chilled convenience foods" with 42 factories in 5 countries, employing 13,000 people, and an annual turnover in excess of £1 billion. It is listed on the Icelandic stock exchange. In Q3, 2005, its return on shareholder equity was 28.3%
In its latest financial statements, the annual report for 2004, the Icelandic National Power Company, Landsvirkjun, does not state the return on equity for its shareholders. During 2004, a year when Landsvirkjun claims it earned "record profits", Iceland Review calculates it to be 14.1%, only half of that of Bakkavör. In 2004, Landsvirkjun employed 287 people, and turnover amounted to slightly more than £100 million, ten times less than Bakkavör. Landsvirkjun is a cooperative which operates under a special charter from Althingi; it is owned by the Republic of Iceland (50%), the City of Reykjavík (44.5%) and the City of Akureyri (4.5%).
According to a model developed by the economist Thorsteinn Sigurlaugsson, the hydroelectric dam currently being constructed at Kárahnjúkar has close to 0% return on equity using many of the assumptions published by Landsvirkjun. If this is true, the owners of Landsvirkjun, the citizens of Iceland, are putting their capital at risk to build the dam at Kárahnjúkar without receiving any compensation. Others have also criticized the fact that Landsvirkjun is subsidized with tax credits and by the favorable interest rates which it receives as a state owned entity. Thorsteinn's model does not include the environmental costs.
In an interview with the weekly business section of Fréttabladid on Wednesday, Gylfi Zoega, professor of economics at the University of Iceland and Birkenbeck College, UK, claimed that the heavy industry projects in northeastern Iceland (ie, the hydroelectric dam at Kárahnjúkar and the Alcoa aluminum smelter it supplies) were the cause of the substantial problems currently being suffered by Iceland's export industries. "The root of the problem is the large-scale projects in the northeast of Iceland. At full employment, the decision to build an aluminum smelter does not create new jobs, it just adds another smelter [to the economy] and displaces other jobs," he said. "Jobs are being moved from other parts of the country to the northeast," said Gylfi. Gylfi said that if interest rates had not been raised in response to the expansion, inflation would have followed. Adopting the Euro would not solve these problems, said Gylfi, only make them manifest themselves in a different way.
Fréttabladid also reported Wednesday that foreign purchases of Icelandic securities had decreased in the last quarter of 2005, amounting to ISK 7.3 billion compared to ISK 43 billion the preceding year. Net purchases of shares dropped by 74%. The research department of KB-bank (Kaupthing) attributed the lower levels of foreign purchases to expectations of a weaker Icelandic króna and the substantial appreciation of Icelandic stocks last year. Expectations of a drop in the Icelandic króna had, nevertheless, been reduced recently in the wake of news of possible additional heavy industry projects, said Kaupthing.
The human being will be on display for the first time in its natural environment in the Reykjavík Family Park and Zoo next weekend. Visitors can observe three men and one woman in a cage after 10 am on Saturday and Sunday.
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July
29
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Woman Beats Male Swimmers in Videy Race
The formal Videy island swim took place yesterday and there were three participants, two men and one woman, Thórdís Hrönn Pálsdóttir, who is the first woman to participate in the Videy swim since 1959.
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The Environment Agency intends to investigate whether the Heath Protection Authority handled the situation in Eskifjördur, east Iceland, in the correct manner when contaminated water from a trawler was carried into the town’s drinking water system.
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One hundred and forty million cubic meters of ash is estimated to have fallen in Iceland during the volcanic eruption in Eyjafjallajökull last spring. That excludes all the ash that fell into the ocean and in other countries.
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July
28
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Westman Islands Expect 18,000 Visitors
July
27
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Iceland-EU Membership Talks Begin
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The second issue of the print edition of Iceland Review 2010 has just been published. Entitled “Under the Volcano” the magazine dedicates 20 pages, words and pictures, to the volcanic eruption in Eyjafjallajökull glacier which made headlines all over the word. New subscribers will receive the book Puffins as a gift and all subscribers are part of a draw to win a trip to Iceland. Click here to subscribe to the magazine.
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REVIEWS
Hendrikka Waage is an accomplished jewellery designer whose first children’s book Rikka and Her Magic Ring in Iceland, takes readers on an enchanted and educational journey through the country. It’s beautifully illustrated and a good lesson in geography, but the plot could have been better thought through and the moral of the story is a bit too prominent.
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July
26
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Feature of the Week: Under the Volcano
On the third day of the Eyjafjallajökull eruption we drove from Skógar to Hvolsvöllur in total darkness, a distance of 18 kilometers. It was frightening, the darkness being so impenetrable that we could hardly see out the windows of the car. We could see faint lights from the farm standing right next to the highway.
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Ásmundur Sveinsson is among the foremost Icelandic sculptors. The current exhibition in the Ásmundur Sveinsson Museum in Reykjavík is entitled “I choose women who thrive…” and features women as symbols in the sculptor’s art. The works in the exhibition are selected from his entire career.
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