WRITTEN QUESTION E-3439/01

by Frank Vanhecke (NI) to the Commission

(21 December 2001)

Subject: Cost of renovating the Berlaymont Building

Renovation work on the Berlaymont Building is almost complete. The cost of that work prompts a large number of financial questions.

Can the Commission indicate the initial estimate of the cost of the renovations and the actual final cost?

How can the discrepancy between the two amounts be accounted for?

What did it cost to move the Commission out of the Berlaymont Building before renovations began, and what amount has been earmarked for its move back?

Where will the money required to pay for the renovation of the Berlaymont Building come from?

Is it true that the Belgian Government will also be covering part of the cost? If so, how much will it pay?

Answer given by Mr Kinnock on behalf of the Commission

(8 February 2002)

The Berlaymont protocole d'accord signed by the Belgian Government and the European Commission on 8 July 1997 included an estimate for the costs of renovating the building (assuming reoccupation on 30 June 2000) of BEF 13,1 billion ( 324 million).

The latest cost estimate made by Berlaymont 2000 SA in its Annual Report for the year 2000 (published 11 June 2001) was that the renovation cost would be BEF 20,2 billion ( 500 million), assuming reoccupation by 31 December 2003. This should not be interpreted as a price that the Commission would be prepared to pay. As the protocole made clear, works must be performed in accordance with best practice. The Commission has repeatedly emphasised to the Government, the company responsible for management of the works, and all other parties that it will not cover any renovation costs resulting from management errors and consequent delays.

The difference between the 1997 estimate and the 2001 estimate is said to arise from the delay in the date for completion, which, in turn, is attributed to difficulties experienced by Berlaymont 2000 in managing the project, and to the time that has been given to litigation resulting from disputes between contractors involved in the works.

The cost of moving out of the Berlaymont in 1991 amounted to 51 million ECU's (around BEF 2 billion). It related to direct removal costs and to the costs of modifying and furnishing the substitution buildings.

It is difficult now, in January 2002, to make a precise and dependable estimate of the costs of moving 3 000 officials back into the Berlaymont building in 2004, especially since there is not yet any real certainty that reoccupation can take place on the revised date of 31 December 2003. The Honourable Member may be assisted by the knowledge that the 2001 estimated average cost of moving an official between offices that are used in Brussels was 120. The cost of furniture, telephones, computers and other technical installations must be added to that sum.

The renovation of the Berlaymont is currently financed by a short-term loan in the sole name of the Berlaymont 2000 SA, a company that was specifically and solely established to manage the renovation of the Berlaymont and is 70 % owned by the Belgian State and 30 % owned by two banks.

The protocole d'accord of 1997 stipulated that the Belgian government would meet the costs of decontamination (which proved to be BEF 5 billion, 124 million). It also made provision for the Commission, subject to certain conditions that require the work to be brought to une bonne fin (a satisfactory conclusion), to meet renovation costs.

As previously announced to Parliament and public, the Commission and the Belgian Government are continuing discussions which they jointly intend to conclude with a mutually acceptable contract.