From Iceland — Government Signs Contract for New Data Center

Government Signs Contract for New Data Center

Published June 8, 2010

Parliament approved yesterday a contract between the government and several private companies to build an electronic data center in Reykjanesbær. The Movement objected to the deal on the grounds that one of the parties involved is Björgólfur Thor Björgólfsson.
The bill, submitted last December by the Ministry of Industry, was approved with 36 in favor, 5 against, 7 abstaining and 15 not present. The yes voting was a mix of all parties, both the majority and the opposition. The no voting came from The Movement, one unaffiliated MP, and one Progressive.
The law says that the government has made a contract with Teha Investments S.a.r.l., Novator, Verne Holdings ehf. and Verne Real Estate ehf. to build and run an electronic data center in Reykjanesbæ, a town in the southwest of Iceland (near Kelfavík). The law emphasizes that the property on which the data center is raised and the data center itself remain in the ownership of Icelandic citizens, most likely influenced by recent concerns over Canadian company Magma Energy acquiring a 98% stake in HS Orka, Iceland’s third largest power company, last month. The data center itself will be 20,000 square meters and will use 80–140 MW of electricity.
The Movement objects to the proposal because Verne Holdings is majority owned by Novator, which is itself owned by Björgólfur Thor Björgólfsson. In a statement from The Movement to members of the press, they object to the move on that grounds that Björgólfur Thor has proven to be “unreliable in the sphere of business”, and they encourage the ruling majority of the Social Democrats and Leftist-Greens to show a “moral example” by refusing to do business with Björgólfur Thor.
Reykjanesbæ has the highest rate of unemployment in Iceland. The last figures from the Directorate of Labor put the region’s unemployment at 14.6%, while the national average is about 9% right now. Jobs have been scarce in the region since the US Naval base left the country in 2006.

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