SJ loses concession

A decision to grant Hong Kong-based MTR a concession to operate Stockholm’s Pendeltåg suburban rail services as of December 2016 has come as a blow to rail operator SJ. The state-owned company has operated the network via its subsidiary Stockholmståg over the past decade, but has now lost the 10-year contract, which could be worth up to SKr 30 billion, if Stockholm County Council exercises an option for a four-year extension. SJ’s annual sales will fall from SKr 9 to SKr 7 billion as a result.

Ulf Adelsohn, former chairman of SJ, is furious over the news: “You could ask why it is that a company from Hong Kong can operate train services in Sweden when we are not allowed to set foot there. If this continues, we in Sweden will soon be without our own train company and become totally dependent on foreign companies,” he tells business daily SvD.

Crister Fritzon, the current CEO of SJ, is somewhat more optimistic, envisaging a new market for SJ in Norway and Denmark, where there are plans to open up competition.

Pressure on government

Closing Sweden’s borders will not solve the major challenges that lie ahead, warn the Swedish Trade Union Confederation (LO) and the Confederation of Swedish Enterprise (Sv. Näringsliv). Both organisations consider that the government must act now and introduce uncomfortable reforms in the wake of huge influx of refugees to Sweden.
“As many people as live in a city the size of Linköping have come so far this year. Look at how much housing, infrastructure and welfare there is there, with its own university hospital, and we’re seeing how much we’ll need to invest now,” says Karl-Petter Thorwaldsson, chair of LO.
“In order to give these new arrivals a chance we must get used to bigger differences (in salaries, ed.) than we have today,” says Carola Lemne, head of Sv. Näringsliv, who wants the government to use the respite it has created in refugee reception to push through major structural reforms.
The situation is so serious that the government must raise the ceiling on public spending, contends Robert Bergqvist, SEB chief economist, warning that to introduce savings at this time will have extremely negative consequences.

SKF & Volvo pull out of coal lobby

Swedish ball bearing provider SKF and the Volvo Group are part of WWF’s climate initiative for companies to lower their carbon footprints. Both companies are also members of the National Mining Association (NMA), a US lobbyist for the coal and mining industry that is working to stop President Obama’s climate policies in the US, reports SVT. Over the last few years, NMA has spent over USD 100 million on campaigns to depict coal as affordable and reliable.
Quizzed about their membership of NMA, both SKF and Volvo have now chosen to leave the organisation.

Swedish climate villains

SSAB, Cementa and Fortum Värme are among Sweden’s biggest emitters of greenhouse gases. By 2030 these companies could reduce their carbon footprints to zero. However, if they are to succeed in transferring to more climate-friendly production, politicians must do their bit, companies tell Svenska Dagbladet.
“If we get a global trade system in place that can help us, there is a possibility for us to become climate neutral between 2030 and 2050, but on our own we can not do it,” says Stefan Savonen, head of energy and climate at state-owned mining company LKAB.

Broad anti-corruption deal

Construction and property companies in the private sector have reached a unique agreement with the Swedish Association of Local Authorities and Regions (SALAR) on a clearer boundary between ‘corrupt’ and ‘non-corrupt’ activities in the construction sector.
Findings by the National Council for Crime Prevention (Brå) reveal that almost one-third of all reported donors of bribes in 2013 were working within the construction industry. Later figures reveal that corruption remains rife within the sector.
The new deal means that bonuses for customers in the form of tickets to sports events and Baltic cruise trips will no longer be acceptable, says Helena Sundén at the Anti-Corruption Institute (IMM).

LKAB under pressure

State-owned LKAB’s new chief executive Jan Moström announced on Friday that the mining company will be separated into three new divisions: mining with processing plants in Kiruna, mining with processing in Malmberget and Svappavaara, and LKAB Minerals with production and sales and drilling technology LKAB Wassara, in order to adapt to new challenges. In addition, there will be a major reshuffle within the senior management, said Moström.
At the same time on Friday, iron ore prices fell to under 40 US dollars per ton, and noted their lowest level since 2008.

Soaring cost of high-speed lines

A fresh assessment by the Swedish Transport Administration indicates that the construction of high-speed railway lines, linking Stockholm with Gothenburg and Malmö, will cost SKr 256 billion, which is SKr 90 billion more than first projected.

The news will come as a shock to politicians, who have said it will be difficult to find the funds to finance the project. Only yesterday Infrastructure Minister Anna Johansson said funding would require “ingenuity”.

Pending parliamentary approval in 2018, completion of the lines (in 2035) could see journey times between Stockholm and Gothenburg reduced to 2 hours, and between Stockholm and Malmö to 2 hours 30 minutes.

Firms ignore Riksbank’s rhetoric

In a report from the Swedish Export Credit Corporation (SEK) to be released today, 200 export businesses are cautiously optimistic about the business climate, but headwinds lie ahead. A tough funding environment, uncertainty on world markets and the ineffectiveness of the Riksbank’s monetary policy are the main storm clouds on the horizon.

The central bank’s monetary policy is aimed at making the Swedish krona weaker. Despite this, many of the businesses polled expect the Swedish krona to strengthen. “This means that many do not really listen to or believe in the Riksbank’s rhetoric,” says Marie Giertz, SEK’s chief economist.

Healthy growth

Sweden’s economy grew twice as fast in the third quarter as economists had forecast, fuelled by rising consumption and investment. Exports also contributed to the growth, even if imports increased at a similar rate.
The economy expanded 0.8% in the quarter, said Statistics Sweden. At an annual rate, the economy grew by 3.9%. The Swedish krona strengthened by 5 öre against both the dollar and the euro on the news.
With the ECB expected to deliver more stimulus on Thursday, the pressure is on the Riksbank to cut the repo rate again in December. “However, the figures speak against any action by the Riksbank,” said Annika Winsth, Nordea’s chief economist.