Charmed Modi

Swedish companies are investing big in India: Ikea is to open 25 new stores over ten years, Saab is hoping to negotiate orders for 100-400 fighter jets and Volvo is introducing its hybrid buses in Mumbai.

The Swedish delegation at the India International Trade Fair, Make, expected a two-minute visit from India’s Prime Minister, Narendra Modi, but Sweden’s trade secretary in India, Anna Liberg says, “We got 20 minutes with him, and he has shaken the hand of 10-15 Swedish CEOs and listened to their plans in India. We have made an extremely good impression.”

Volvo’s CEO, Martin Lundstedt, says, “I put forward our message on sustainability, urban development and public transport systems. And he displayed lots of interest in this, which, of course, means a lot to us.”

Fresh blow for nuclear power

In a letter to the government, the Swedish Radiation Safety Authority (Strålsäkerhetsmyndigheten) has requested an increase in the charges that nuclear power plants pay for handling radioactive waste. The authority has analysed the decision to decommission four of the country’s ten reactors early and concludes the charges must be raised to finance the decommissioning of the reactors and the management of the used nuclear fuel.

The rise in cost would increase the pressure on the nuclear power plant owners who are already raising the alarm that all reactors may be forced to close due to poor profitability.

Record loss for Vattenfall

State-owned Vattenfall has reported a record loss for 2015, the worst in the company’s history. With a loss of SKr 19.8 billion, it is almost double as much as the loss the previous year.

Vattenfall’s CEO, Magnus Hall, pointed out the company is still making reasonable profits in operations. It is mainly the writing down of assets and falling electricity prices that triggered the huge reported loss. The single largest write down was due to the closure of two of the four reactors at the Ringhals nuclear plant.

Magnus Hall warns that all the reactors, which supply a significant portion of Sweden’s electricity, could close if nuclear output tax is not removed, “and a decision is needed before the summer,” he says. He states that political action is needed to avoid Swedish nuclear power closing down early, and Vattenfall is unable to make necessary investments if the tax is not abolished.

Warning: new risks for new production

The government has gone ahead with a proposal to exempt new builds from tighter mortgage rules as a way of helping the construction industry retain profits and price levels as a way of tackling the housing shortage.

However today, the Swedish Bankers’ Association (Bankföreningen) is issuing a warning against exempting new houses from new, tighter mortgage rules. The association warns that the risks of loans for new productions are just as high as for existing housing, it could lead to a segmented housing market, and the purchase prices for new-builds will not meet the market value of the housing; for example a newly built apartment which cost SKr 5 million could fall by SKr 500,000 once on the market as a used property and when it is no longer exempt.

Liberals warn the government

DI reported yesterday that research is under threat from nuclear power plant closures, as scientists leave Sweden.

Liberal party leader Jan Björklund has reacted angrily, “In practice the government is reintroducing the “thought-ban” laws (Act from 1986 prohibiting construction of nuclear power stations – ed.) by strangling funding.”

Björklund wants to construct a new research reactor to study the fourth generation of nuclear power energy. Both the Moderates and Vattenfall’s CEO Magnus Hall are in agreement.

However the government dismisses the criticism. “We aim to be an eminent research nation, but it is not the government that controls in detail which research should be financed,” says Research Minister Helene Hellmark Knutsson (S). (DI: 11)