Cost of Kárahnjúkar Dam Exceeds Estimates Skip to content

Cost of Kárahnjúkar Dam Exceeds Estimates

The total cost of constructing a dam and a hydropower plant at Kárahnjúkar in Iceland’s eastern highlands has exceeded estimates by ISK 17.7 billion (USD 264 million, EUR 172 million) and is now expected to amount to ISK 133.3 billion (USD 2.0 billion, EUR 1.3 billion).

This new cost estimate for Kárahnjúkar was presented by Minister of Industry Össur Skarphédinsson at the Althingi parliament yesterday, Fréttabladid reports.

MP for the Left-Greens Álfheidur Ingadóttir said until yesterday people had not been aware of by how much cost estimates were exceeded.

Ingadóttir criticized the minister for not taking the cost of agreements with contractors into account. She argued that by including such agreements the original cost estimate is exceeded by an even higher amount, ISK 32.5 billion (USD 484 million, EUR 315 million).

In the report presented by Skarphédinsson yesterday, it is also stated that the profitability of the power plant’s net worth is 13.4 percent instead of 11.9 percent, mainly because of an increase in aluminum prices.

The Kárahnjúkar hydropower station provides electricity for the Alcoa aluminum smelter in Reydarfjördur.

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