|Landsvirkjun Annual Report 2005|
Valgerður Sverrisdóttir, Minister of Industry and Commerce, and Jóhannes Geir Sigurgeirsson, Chairman of the Board of Directors, addressed meeting guests, and Landsvirkjun CEO Friðrik Sóphusson presented a report on company operations. Furthermore, the meeting provided an opportunity to introduce Landsvirkjun's quality certification according to the ISO 9001-2000 standard.
Scholarships were presented to six university students at postgraduate levels. Bjarni Bjarnason, Director of the company's Energy Division, delivered a lecture entitled Aluminium and Energy on a Global Scale, and Pétur Reimarsson, project manager at the Icelandic Confederation of Industry, discussed the topic Energy and the Atmosphere.
In her address, Valgerður Sverrisdóttir, Icelandic Minister of Industry and Commerce, informed the meeting of a declaration of intent by the Minister of Industry and Commerce, Minister of Finance, Mayor of Reykjavík and Mayor of Akureyri, in February 2005, to the effect that the Icelandic State purchase the shares in Landsvirkjun held by the municipalities of Reykjavík and Akureyri. The aim of this measure was to clarify the ownership of electricity companies now operating in the much-discussed competitive environment, since it was undesirable from the market point of view that the owners of Landsvirkjun should all hold major shares in other energy companies. A case in point is the fact that Reykjavík Energy and Landsvirkjun are the largest producers of electricity in Iceland and consequently ought to carry on stiff competition in this field. With a view to such matters, it is highly inappropriate for the same owner to possess large shares in each company and make decisions concerning the business of both.
In his address, Jóhannes Geir Sigurgeirsson, Chairman of the Landsvirkjun Board of Directors, discussed various issues relating to Landsvirkjun that have been much in the public eye over the past few months. He said that the aluminium industry would in some respects develop in a similar way to the fishing industry, which only uses a fraction of the manpower previously required. Productivity would likewise increase in the aluminium industry, parallel to its significance as a source of employment decreasing. Even so, the sector would remain a mainstay of Iceland's export revenue for many years to come. Furthermore, Jóhannes Geir Sigurgeirsson stated that the financial analysis departments of banks had been failing to ensure necessary precision in their coverage of aluminium production and the impact of new aluminium smelters on the national economy.
Friðrik Sóphusson, CEO of Landsvirkjun, discussed company operations during the past year. During the current year, work on constructing Kárahnjúkar Power Plant will reach its climax; next year, on the other hand, the extent of activity will gradually decrease and by the end of 2008 be almost finished. Construction work generally proceeded smoothly during 2005, said Friðrik Sóphusson, with most project components keeping to schedule. An exception to this, however, was construction of the plant's headrace tunnel, now 4-5 months behind schedule due to difficult geological conditions. Similarly, the steel lining in the penstocks is three months behind schedule.