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4. Norway
4.1 There are three types of ferries operated by over 20 operators in the Norwegian domestic market:
- A large Coastal Voyage, which runs once a day from Bergen in the south to Kirkenes in the north, taking 11 days round trip. These ferries take both vehicles and freight;
- Fast ferries, which operate along the coast, usually taking vehicles and only light freight;
- Car ferries, which operate shorter journeys as a part of the road network. These are used to cross fjords or give access to islands not connected to the mainland with bridges. They sometimes also carry freight.
4.2 The local authorities/county councils in Norway have the main responsibility for regulating buying services from ferry operators. They issue licenses and enforce license conditions.
4.3 Car ferries, which are a part of the main road network, are administered more directly by central government through the Public Roads Administration. The Coastal Voyage is regulated directly by the Ministry of Transport and Communication. The ferry services are operated mainly by private ferry companies, with each ferry company being a monopolist on a bundle of crossings.
4.4 None of the ferry services are formally regarded as lifeline services or
PSO. In order to get a license to run a service, however, the operator needs to sign a contract with the county council or Public Road Administration. Stipulated in the contract are the ticket prices and frequency of service. This is to ensure a satisfactory level of service for people who depend on it.
4.5 Subsidy amounts are set out by the central government in their annual spending plans and each county council is given a budget which they can spend on ferry subsidies. The subsidies are currently given to operators based on their concession area. Most operators serve in areas that consist of both profitable and loss making services. This makes it possible for an operator to cross subsidise - transferring money from a profitable service to a loss making service.
4.6 In the past 10 years, 10% to 15% of the routes have been put out to open tender as a trial. From 2005 onwards, this will become a permanent arrangement. The new tendering process intends to prevent cross subsidisation from happening, as contracts are for routes and not areas.
4.7 The responsibility of tendering ferry services has fallen on subsidiary road authorities at the local and regional level, resulting in different designs of the tendering process, as well as contractual arrangements. There is a combination of net cost and gross cost contracts currently in place in Norway.
4.8 Thus far, the experience in Norway has had the following market implications:
- Lower subsidies for ferry transport;
- More efficient and better structured ferry transport organising;
- Lower operational costs and more flexible shift systems;
- More ferry capacity with better supply quality and frequency;
- Low bidding prices (at even below the no profit level) by incumbents to prevent market entry by outside operators;
- Increase in transaction costs related to contract negotiations and renegotiations; and
- Collusion by companies already operating in the same areas when bidding for contracts, effectively creating monopolies to keep out other competitors.
4.9 Although not an
EU country, Norway's maritime practices are fully compatible with the
EFTA Surveillance Authority (
ESA) with an open procurement process.
ESA procurement rules are similar to those in the .
4.10 The Norway case study is in
Appendix B of this report.
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