The company building a luxury hotel and baths in the protected Þjórsárdalur valley has yet to negotiate payments for water usage at the site. The Icelandic Institute for Natural History called it a mistake to permit the development, as it entails disturbing the landscape. The company building the hotel is a subsidiary of the Blue Lagoon and holds a 40-year lease on the land.
The hotel and baths are being constructed within a protected area, on a plot owned by the state. The company Rauðukambar ehf., a subsidiary of the Blue Lagoon, is leasing the 130,000 square metre plot for just over ISK 400,000 [$3,000, €2,800] per month. Payments to the state for water usage are yet to be negotiated.
Prime Minister’s Office authorised construction
Since the construction is on public land, it was subject to the approval of the Prime Minister’s Office, which has authorised the project according to the conditions of the protected area. Prime Minister Katrín Jakobsdóttir herself was present at the official start of construction, digging the first shovelful into Rauðukambar mountain alongside the mayor of Skeiða- og Gnúpverjahreppur municipality, where the hotel will be located, and the developers.
The hotel is being built into Rauðukambar mountain, reportedly to minimize its visibility. The Icelandic Institute for Natural History has stated its opinion that the hotel and baths do not comply with the objectives of protection of landscapes and natural monuments as they cause irreversible damage and change the natural landscape.
The parent company of the Blue Lagoon is also constructing a luxury hotel in a second protected area in the Icelandic Highland, Kerlingarfjöll. According to original plans for the area, the new hotel was to be one of the largest not just in the Highland, but in all of Iceland. The ambitious nature of the project raised concerns about environmental degradation and in 2015, the Icelandic Environment Association (Landvernd) appealed the construction, the first stage of which had begun without any environmental impact assessment.