Government Weighs New Road Tolls to Fund Infrastructure

2026-03-18 - 09:33

Proposals to introduce or reinstate tolls on major Icelandic roads are under consideration as part of a new government plan to finance large-scale transport projects. As reported by RÚV, a state-owned infrastructure company would be established to oversee development and funding. What's the Story? Proposal submitted to the Althingi to establish a state-owned infrastructure company to fund major transport projects Tolls under consideration for existing and future infrastructure, including Hvalfjörður Tunnel from 2028 and possible routes such as Reykjanesbraut and Suðurlandsvegur Funding model could reduce state contribution to projects from ISK 75 billion to ISK 27 billion Icy road in Iceland. Photo: Kamil. Pexels. Public Domain. Transport funding plans According to an explanatory statement from Iceland’s Ministry of Finance and Economic Affairs, submitted to the Alþingi, key projects include the Ölfusá bridge, Fljótagöng tunnels and Sundabraut transport corridor. The company would initially be wholly owned by the Treasury, though provisions allow for private investment at a later stage. The state would retain a controlling interest, either through majority ownership or a veto-holding minority share. The proposal would authorise the company to levy tolls not only on future projects but also on selected existing infrastructure. Among those under consideration are the Hvalfjörður Tunnel, where tolls could return in 2028, alongside potential inclusion of the Vaðlaheiðar Tunnel and crossings over Hornafjarðarfljót. A government report suggests that reintroducing tolls at Hvalfjörður could significantly reduce public expenditure, lowering the state’s contribution from ISK 75 billion to ISK 27 billion. The memorandum also notes that extending tolls to major routes such as Reykjanesbraut and Suðurlandsvegur could distribute costs more evenly among road users.