Unused Pipes Deliver No Profits for Reykjavík Energy Skip to content

Unused Pipes Deliver No Profits for Reykjavík Energy

Reykjavík Energy (OR) has invested approximately ISK 2.6 billion (USD 23 million, EUR 18 million) in pipes in neighborhoods where construction has come to a halt and are inhabited by few people or none. The investment therefore delivers little or no profits at all.

This is considered as an example of lack of organization in Iceland’s capital region—where the supply of new apartments far exceeds demand—and a monument to the crisis, Fréttabladid reports.

From a construction site in Iceland’s capital region in 2006. Copyright: Icelandic Photo Agency.

Usually, OR establishes distribution systems for heating, electricity, sewage and data transfer before people move into new neighborhoods that inhabitants pay for as soon as they move in. But now this investment is unlikely to pay off.

Among uncompleted and vacant neighborhoods in the capital region are Helgafellsland in Mosfellsbaer, Vatnsendahlíd in Kópavogur, Úlfarsárdalur in Reykjavík, Vellir in Hafnarfjördur and Urridaholt in Gardabaer.

OR has also invested in distribution systems in new neighborhoods in Akranes, Hveragerdi, Hella and other places that are not fully inhabited.

The municipalities themselves are also suffering losses because of urban planning-related investments, while, on top of that, it will prove costly to provide services for scarcely-inhabited neighborhoods.

Furthermore, building contractors invested high amounts in constructing houses and apartment complexes for these neighborhoods. The new apartments largely remain unsold and are therefore not delivering any profits for the contractors.

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