IVA's President: some thoughts on Infrastructure Investments

Dear IVA Friends, 

One year from now, voters will go to the polls in Sweden. I look forward to the election campaign, and as a representative of the world's first academy of engineering sciences, I have a message for the political parties: think big! Think beyond a single term of office. What we need now are big ideas to build Sweden for the future.

Predicting the future is no easy task, but it is safe to say that AI represents a change as momentous as Gutenberg's printing press or the internet. Yet, I see one crucial difference, and that is speed. The development and rollout of artificial intelligence is happening at a pace never seen before. It is more than just a technological change; it is a paradigm shift that will generate a future we cannot even imagine today. This places high demands on today's decision-makers – to make the right choices for the future. I have the utmost respect for that responsibility. Making decisions today that will benefit future generations is a delicate task.

Nevertheless, our future prosperity depends on big and bold choices now. Sweden needs to make extensive investments in strategic technologies, cheap and stable electricity, and in strengthening our expertise. And we must decide on major infrastructure projects without delay.

It has been over 30 years since Denmark and Sweden reached an agreement on the Öresund Bridge. Now is the time for the next major infrastructure investment.

I am not the person to decide what to prioritize, but there are many needs and opportunities. One proposal is to invest in new main lines for freight and passenger rail traffic. We must also finally sort out the Malmbanan arctic railway line. Another proposal is to make Arlanda the world's most climate-smart airport and a hub for Northern European air connections with the rest of the world. Or why not build a new connection between Sweden and Denmark across the Öresund?

As a resident of Malmö, I am closely following the construction of the Fehmarn Belt tunnel linking Denmark and Germany. This tunnel will connect Scandinavia with southern Europe and make the journey between Malmö and Hamburg shorter than between Malmö and Stockholm. There are several interesting aspects of this huge investment from which Sweden’s political parties can draw lessons.

For Sweden, its importance cannot be overstated. Estimates show that 40 percent of traffic in the Fehmarn Belt tunnel will come from Sweden. The 18-kilometer tunnel is scheduled for completion in 2029 at a cost of around SEK 80 billion. It presents enormous opportunities for Swedish industry.

Swedish companies should have high expectations of their decision-makers. How will the infrastructure on the Swedish side be upgraded to cope with the increase in traffic to Germany and onward to Europe? Can the Southern Main Line handle the higher volumes?

Financing is another interesting facet. For the Fehmarn Belt tunnel, the financing model is quite similar to that of the Öresund Bridge, i.e., borrowing with a fairly aggressive repayment plan once construction is complete. The Danish government is acting as guarantor for the construction loan, and its repayment will begin once the tunnel is complete. Germany is responsible for a significantly smaller share and the European Commission for one billion euros. Sweden, which will profit greatly from the connection, is not responsible for any of the financing.

Bold decisions on major infrastructure investments will benefit Swedish industry, Swedish competitiveness, and our future prosperity. Perhaps strict budget rules and spending caps have stood in the way of Swedish governments. If so, I would urge them to dare to think in new ways. If nothing else, for the sake of future generations. I don't know if an investment budget would be the right model for Sweden, but I believe in financing more large projects outside the state budget. One proposal is to finance more large infrastructure projects through a loan model such as that used for the Öresund Bridge and the Fehmarn Belt tunnel.