Norway

Norway recently expanded urban rail transit with five projects in its two largest cities, Oslo and Bergen. Two recently completed transit projects in Oslo include the Ring Line, which is primarily underground, and the Løren Line, which is also tunneled and connects the Ring Line to stations in northern Oslo. Between 2003 and 2017, Bergen built out a 13-mile light rail system in three parts, of which nearly a third is underground. 

Construction costs in Norway are lower than for average comparable projects in the Eno database, both with its Nordic peers and global democracies in general.  

Planning and decision-making for public transportation in Norway is balanced between the national and local governments. Localities and transit agencies play the primary role in planning and delivering new capital projects. The national government signs off on all major projects and plays a principal role in selecting projects to fund.

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Governance

Norway is considered one of the most mature democracies in the world. It is a unitary sovereign state with a constitutional monarchy and a parliamentary system of government. Power is separated among the legislative (parliament), executive (cabinet), and judicial branches of government, as determined by the 1814 constitution. 

Norway’s national government is comprised of a prime minister and the Statsråd (Council of State), which is chosen by the monarch with approval from the Storting (Norwegian Parliament). The Storting was bicameral until 2009, when the former upper chamber was dissolved. Parliamentary elections occur every four years, and seats are allocated via proportional representation.  

The national government plays a large role in the funding and approval of major transportation projects. The Ministry of Transport is responsible for approving all major transportation projects, though project planning is initiated and conducted largely at the local level. Other major stakeholders include the Public Roads Administration, which oversees the national roadway network, and the Railway Directorate, which coordinates the nation’s railroads.  

Norway is divided into 11 counties (fylker) that are further divided into rural and urban municipalities. Counties in Norway have the authority to levy taxes onto municipalities to fund public works and education. Counties are governed by councils that consist of delegates from the municipalities, as well as governors appointed by the national legislature. Counties are responsible for the construction and maintenance of their own regional transportation infrastructure, while municipalities are responsible for ports and local roads.

Municipalities are governed by a mayor and board of aldermen, and some have councilors to manage various elements of government like finance, schools, and housing. Municipal elections occur every four years (two years after the national parliamentary elections), and results tend to mirror those of national elections.  

Oslo is both a county and a municipality, with the same jurisdictional boundaries for each designation. Within Oslo lie 15 districts run by their own councils. These districts are responsible for various services like youth and elder care facilities, health centers, youth clubs, and social services for immigrants. The Oslo City Council delegates responsibility to these councils and provides some funding to them through grants and fees on services.

Oslo’s transit system is managed by the transit agency Ruter, a company owned by the city of Oslo and primarily responsible for the planning, marketing, and contracting elements of transit. Ruter was created in 2006 to procure and manage the various independently governed modes of transit in the greater Oslo region. Ownership of Ruter is split between the Municipality of Oslo (60 percent) and the jurisdictions that formerly made up Akershus County (40 percent), which in 2020 was merged with Viken County. Public and private companies under contract manage operations of the metro, tram, buses, and ferries. Sporveien, a public corporation owned by Oslo, operates the metro and tram system and leads engineering and construction for capital projects on behalf of Ruter under a permanent contract.  

The regions of Bergen and Trondheim also have their own tramway networks. In Bergen, a county-owned company, Bybanen AS, was created to construct, own, and operate the region’s new light rail system. 

Project planning and regulation

The national government plays a large role in the funding and approval of major transportation projects. Every four years, the national government establishes a National Transport Plan (NTP) that sets the goals, projects, and funding allocation for a 10-to-12 year period. The national government also establishes long-term co-financing agreements to support large transportation projects in major cities like Oslo. The Ministry of Transport is responsible for approving all major transportation projects. The planning functions begin at the local level.  

A group of technical experts and representatives from the local, county, and national governments are part of a group that helps craft the NTP, funding packages, and provides technical analysis and guidance to elected officials. Each May, this group helps develop a draft of the proposed four-year transportation plan and provides its recommendations to Parliament.  

Initial planning for major transit projects happens at the local level. In Oslo, this is handled primarily by Ruter, with collaboration and technical input from Sporveien, the Rail Directorate, Public Roads Administration, and relevant municipalities/counties. Planners initially develop conceptual frameworks for projects, then refine them into discrete alternatives that are evaluated through the planning and environmental review processes and are later approved by the national government before implementation. While authority for planning is concentrated at the local level, stakeholders at all levels of government are involved in steering the planning of major projects.  

All major public works projects, zoning, and development projects must comply with the processes outlined in the national Planning and Building Law. This law establishes the responsibility for local governments to conduct their own planning and zoning, and specifies the roles and responsibilities of the national, regional, and local governments in all public works, development, and zoning actions, including public consultation, permitting, and approvals.   

Municipalities’ power over land-use decisions is cited as a source of delays and project modifications, as all transportation projects must be integrated into local land-use plans before they can begin construction, giving local governments influence to shape the timeline and scope of projects. Recently, the national government began using its authority to develop joint land-use and transportation plans to expedite national infrastructure projects.  

Included within the Planning and Building Law is the environmental impact assessment process. Similarly to most other countries, the Norwegian environmental review process requires assessments of major public works’ impacts on the natural and human environments, including an evaluation of alternatives (as well as a no-build alternative). The Norwegian process emphasizes public participation, particularly in the early stages of the review. Norwegian law requires agencies to provide ample opportunity for the public to comment on draft planning and environmental review documents, including through public meetings. In addition, interviewees noted that construction projects in Oslo must meet more stringent environmental standards, which encourage low- and zero-emissions construction sites.  

Major public works over $100 million in Norway must also go through a national quality assurance process. This program was established in 2000 after a series of cost and timeline overruns on major public works projects. The Ministry of Finance works with consultancies during a project to analyze the political decision-making process, contracting, and design to bring transparency and accountability to project delivery.  

Projects go through two quality assurance reviews: the first (QA1) occurs after development of an initial project concept and the second (QA2) takes place at the end of the pre-project phase, where cost estimates and management plans are developed. As part of the QA1 review, consultants review the preliminary project documents and conduct cost-benefit analyses to ensure enough alternatives have been considered, and that the documents supporting the initial project concept are sound. After the QA1 review, the relevant national ministry can decide whether to allow the project to continue in the planning process. 

The QA2 review takes place prior to Parliament’s vote to approve and fund the project. This review focuses on whether the underlying cost and timeline estimates are accurate, and whether the proposed management plan is of high quality. After conducting this review, the consultant issues a recommendation on what the total cost frame should be for the project, including an amount for contingency, as well as recommendations for how to manage the project to keep it within the cost bounds. These recommendations are typically followed by Parliament, though it is not legally required.

Over 160 QA reviews have been conducted since the program’s inception, primarily for transportation and defense projects. A review of 40 completed projects found that 80 percent were completed within or below the cost frame agreed upon by Parliament, and projects were generally within their timelines and featured well-organized management structures. However, other research found some evidence of continued cost overruns and overriding political forces, particularly for projects in smaller towns or rural areas.

Project funding

Norwegian national government contributes up to 50 percent of construction costs for transportation projects. Counties and municipalities make up the remainder through local taxes. Oslo has used revenue from the cordon pricing scheme, which has been in place since 1990 and charges automobile drivers a fee to enter designated areas to reduce congestion, as well as local and county contributions, fare revenue, and land-value capture from new development along new transit corridors.

Oslo receives the largest share of national public transit funding in the country, due mostly to the fact that it’s the largest city and region. The first major national funding package for Oslo was passed in 1990 and funded $2.9 billion worth of transportation projects, of which 20 percent was dedicated for public transportation. Funding came from cordon pricing (55 percent) and national government contributions (45 percent). The second Oslo Package, passed in 2002, included funding for the Ring Line, a new double track railway, and new rolling stock. The third Oslo Package was approved in 2008 (and re-negotiated in 2016), and funds nearly $13 billion worth of projects through 2032. About 85 percent of the revenue in the third package is dedicated to public transportation and cycling infrastructure, while the remaining 15 percent is for new roads. As part of the third package, the Oslo tolling cordon was increased and expanded. 

Project construction

Project delivery is largely handled at the transit agency level. In Oslo, Sporveien manages engineering and construction of projects. According to interviewees, Sporveien retains 60 percent of its staff in-house, with the remaining 40 percent coming from consultants and other external sources. Aside from a funicular railway, no urban rail service existed before the recent construction of its light rail. The county established a new agency called Bybanen AS to plan, build, and operate the system as a wholly-owned subsidiary of the Vestland County Municipality. 

Given the infrequency of projects, the small size of the country, and the relatively small subset of people experienced in project delivery, interviewees noted that consultants and contractors with technical knowledge are often brought in to support projects. In particular, interviewees noted a shortage in “railway technical companies/specialists” leads to increased competition for talent when there are multiple projects, such as the Norwegian national railway system and the Oslo lines, being built at the same time.  

Interviewees noted procurement of transit projects in Norway traditionally uses a design-bid-build method, though there has been a recent shift towards using design-build by procuring design and construction services from a single consortium. Contracts for projects are also split into multiple subcontracts, largely to ensure competition given the limited number of companies with expertise in railway technology.  

One potential explanation for lower Norwegian construction costs is the minimal number of underground stations. Oslo’s Ring Line is 80 percent tunneled but only serves above-ground stations, while the Løren line includes just one underground station. Similarly, Bergen’s light rail system has no underground stations as a cost-savings measure.

Takeaways

Norway is a small country that has completed only five projects in the past decade and has managed to build them at lower per-mile cost than peer countries in Eno’s database. This is due in part to design that uses the country’s topography to minimize tunneled stations, the country’s ability to leverages external consultants for targeted expertise, and balanced national involvement in urban rail investments.  

Part of the success also appears to stem from government’s willingness to address and reform governance. The national government recently consolidated the country’s 18 counties (a first-level administrative division) into 11, simplifying jurisdictional boundaries. The Oslo region created Ruter in 2006 to coordinate and manage the regional transit network, including with significant investments in rail transit. The county of Vestland created a new, purpose-built entity to build and operate the new light rail network in Bergen.  

Norway also uniquely engages in transparent quality assurance reviews, initiated by the national government and contracted to external, independent consultants. This process not only reviews technical design and evaluates political influence, but is part of the approval process required at the national level for a project to move forward, bringing accountability to project delivery.