Norwegian Budget Includes Money to Construct of World’s First Ship Tunnel
In a surprise development, the new Norwegian government budget restored hope for the construction of the world’s first ship tunnel. While it is still not a certainty, it means the tunnel was revived about eight months after the government said it was not proceeding because the costs were too high.
Proponents of the plan to build the more than mile-long tunnel as a route to avoid one of the most exposed areas of the Norwegian coast succeeded in putting approximately $15.8 million into the new government budget. It is a small portion of the estimated construction cost of $900 million, but it means the project could select its main contracts and place some early contracts. Preparatory work would include demolition of buildings at the selected site, as well as the need to award contracts for new water pipelines on both sides of the tunnel.
The idea of building a tunnel at Stad, Norway, has been on the drawing boards for many years. It was proposed as a way for coastal ships to avoid the exposed region, challenging weather, and improve operating efficiency. They would bore a tunnel 50 meters high (164 feet) through the land at a point that is the shortest distance, approximately one mile, through the Stad peninsula. It would have a width of 36 meters (118 feet), meaning it would accommodate coastal vessels, including the passenger ships that run along the coast.
The plan had coalesced in 2024 and begun serious planning. The government initially said it would support a construction cost of approximately 3 billion NOK (just over $315 million). By the time the plans were completed, the Norwegian Coastal Administration, however, was reporting an estimated construction cost of 9.6 billion NOK (just over $1 billion).
Prime Minister Jonas Gahr Støre told Norwegian broadcaster NRK in October 2025 that the tunnel was simply too expensive. Proponents, however, refused to give up, and by early 2026, the Coastal Administration reported it was improving the plan with a goal of reducing costs. Three groups, AF Gruppen, Eiffage Génie Civil, and the Skanska/Vassbakk & Stol consortium, submitted bids, and they were working with the bidders to improve the plans.
The tunnel would run for one mile and permit coastal ships to avoid the dangerous section of the coast (Kystverket)
At the request of the government, the Coastal Administration says it submitted revised plans at the beginning of March. The cost has reportedly been lowered to approximately 8.6 billion NOK (a little over $900 million). Previously, they had said it was estimated that construction would take five years.
It seems with some surprise, proponents were able to work the initial funding into the budget proposal, which was released on June 7. As late as last month, the Prime Minister and the Finance Minister had both said there was no money set aside for the tunnel. The Norwegian Parliament (Stortinget) is scheduled to issue a final approval of the budget by June 19.
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The Norwegian Coastal Administration reports that if the funding is maintained, it can announce the final contract after having previously completed its evaluation of the bids from the three groups. It says other contracts are ready to be tendered, including the demolition and the water pipelines.
It aims to start construction in 2027, said project manager Harald Inge Johnsen, provided the government maintains the current funding for the start of construction. “We are ready as soon as we receive instructions from the Ministry of Trade, Industry and Fisheries," said Eirar Vik Arset, the Director General of the Norwegian Coastal Administration (Kystverket).