Swedish Government Proposes $60 Billion for Rail, Housing

Sweden’s four-party government proposed 400 billion kronor ($60 billion) in investments in high-speed trains and public transport as it seeks to lure back voters ahead of September’s election.

The plan, which stretches until 2035, includes construction of two high-speed rail lines, and looking into whether to build a second tunnel between Denmark and Sweden among other projects.

“This will affect Sweden and its citizens for a long period of time,” Prime Minister Fredrik Reinfeldt told reporters today in Visby, Sweden. “It has serious long-term financing and will enable construction of 100,000 new homes.”

A housing shortage, especially in the Nordic nation’s capital, has contributed to rising property values, increased household debt and is seen as a potential obstacle to growth.

Johan Karlstrom, chief executive officer of Skanska AB (SKAB), said the Nordic region’s biggest builder welcomes the proposal, and that without infrastructure expansion, housing construction won’t take off.

“What is important now is that we get a broad political consensus on how to move these things forward,” Karlstrom said in an interview.

Reinfeldt’s government, which is trailing the opposition in polls ahead of national elections in September, plans to fund part of the investments with a tax on commercial property in areas that benefit from new infrastructure.

Investment in railroads, subways and tram lines increase property values “overnight,” Reinfeldt said. The government will consider taxing the value increase to add about 2 billion kronor a year in funding, he said.

The government estimates that its proposal will add about 13,000 jobs a year in the construction industry, contributing to its target of adding 350,000 jobs to 5 million Swedes in employment by 2020.

To contact the reporter on this story: Niclas Rolander in Stockholm at nrolander@bloomberg.net

To contact the editors responsible for this story: Simon Thiel at sthiel1@bloomberg.net Kim McLaughlin, Niklas Magnusson

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