The Icelandic government agreed yesterday to permit Minister of Social Affairs Árni Páll Árnason to work on ideas to establish 361 nursing rooms in 2010-2012. The project is estimated to cost ISK 9 billion (USD 73 million, EUR 45 million).

The project will be financed with a 100 percent loan for 40 years from the Housing Financing Fund, which would carry 4.6 percent interest, Fréttabladid reports.

The laws applying to the Execution Fund of the Elderly will be amended so that the fund can cover the operational and rental costs of the nursing facilities in 2012 and 2013. That way, the state treasury won’t have to cope with the additional operational cost until 2014.

The majority of the rooms, 224 of 331, will be created in the neighboring municipalities of Reykjavík. Around 200 of these rooms already exist but will become private living quarters instead of accommodating more than one person.

Árnason said the government had given him permission to cooperate with Minister of Finance Steingrímur J. Sigfússon on the execution of the project and reach agreements with municipalities.

The goal is to start constructing new nursing facilities as soon as possible. A bill on necessary law amendments will be submitted to parliament in the coming weeks.

“It is important to look towards the future in times of crisis,” Árnason said. “If we can find a way to do this now without it leading to increased expenses for the state treasury during these sensitive times until 2014, we should absolutely undertake this project.”