Comments by the Norwegian authorities Näiteklauslid

Comments by the Norwegian authorities. The Norwegian authorities have argued that the possibility for the air base to be seen as an attractive investment for potential investors was very limited, particularly in the light of the exis- ting lease agreement entered into with LILAS and the possibility for the latter to purchase the property at the end of a ten year period. Indeed, very few would-be buyers would be willing to invest in the air base and develop it as the tenant of the property was given the right to purchase part/all of it after just a few years. The Norwegian authorities consider that ‘the market value of the air base is by definition not more than possible buyers are willing to pay. (…) NDEA made its best efforts to achieve the highest possible price in the existing markets’. The Norwegian authorities have argued that the reason for their choosing the Verditakst report instead of the OPAK report was because ‘the value assessment made by OPAK AS dated 29 May 2002 was a temporary and simplified value assessment primarily carried out for budgetary purposes. Basically, the assessment was a suggestion of the highest possible payment investors might be willing to pay for the air base, provided that all favourable preconditions were fully met’. The Norwegian authorities have furthermore indicated that the value of NOK 25 000 000 which was set in the case LILAS decided to buy the entire property en bloc during the lease, was the result of negotiations. According to the Norwegian authori- ties, such a high amount was arrived at because ‘in 1996, the parties were optimistic about the potential outcome of their mutual efforts in developing the property and thereby create additional value to the property’. The Norwegian authorities have furthermore indicated that their aim in selling Lista air base was to save the government future costs. Indeed, over the period 1996-2002, the NDEA spent NOK 41 500 000 on the management, maintenance and upgrades of the air base. The works included drainage, installa- tion of runway lightening and public relations spending. The cost arising from the ‘development alternative’ was of NOK 50 000 000 whereas maintaining the air base would have had a cost of NOK 00 000 000-000 000 000. The Norwegian authorities consider that this element should be taken into account when evaluating whether the NDEA should have sold the property at the agreed price.

Comments by the Norwegian authorities. 3.5.1. Measure 1: PSO contracts