Municipal self-governing ports can incur large amounts of debt without proper critical scrutiny of the investments, and most recently this has left Frederikshavn Municipality with a debt of almost 1.7 billion DKK when the municipality had to take over the self-governing port. City council politicians simply have too much difficulty understanding the economy when new projects are given the green light, says economics professor at CBS Peter Maskell to dr.dk.
- The self-governing ports are not covered by rules in the Danish Financial Statements Act, which allow the municipality to investigate the port's options for repaying a loan if one of its investments goes badly, says Peter Maskell. Politicians only have a right to see a profit and loss account and a balance sheet.
At the end of April, a joint city council in Frederikshavn decided to launch a legal investigation into the port's operations to see whether the inadequate financial management could lead to liability. The municipality has continuously lent the port more money to get its finances under control.
- This will free up some energy so that we can make the right decisions. I actually don't think we can move forward until we have an answer to why things have gone so wrong, Mayor Birgit S. Hansen (S) told TV2 Nord at the time.
The city council expects the legal investigation to be ready before the New Year, and the municipality will allocate 1.5 million kroner to carry it out.
In addition to the case in Frederikshavn, Thisted Municipality also had to take over Hanstholm Port last year with a debt of 630 million kroner. DKK, and in 2014 Lolland Municipality took over Nakskov Port, which had a debt of DKK 150 million. Today there are over 20 municipal self-governing ports in the country that are not legally obliged to give politicians insight into a more detailed review of the economy, writes dr.dk.
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