WRITTEN QUESTION E-3485/01

by Christopher Heaton-Harris (PPE-DE) to the Commission

(8 January 2002)

Subject: Berlaymont

What are the current (up to date) costs of the renovation and refurbishment of the Berlaymont?

How much of this cost will be taken on by the Commission?

What, at the beginning, was the total estimated cost of the project?

What is now the predicted total cost of the project?

What files have been handed over the the OLAF?

Has OLAF reported back on these files?

Have or will any prosecutions take place because of problems in the Berlaymont project?

Who has the ultimate responsibility for this project?

When will the Berlaymont actually be ready for occupation?

Will the Commission definitely return to the Berlaymont?

Answer given by Mr Kinnock on behalf of the Commission

(18 February 2002)

Renovation of the Berlaymont building is being managed by SA Berlaymont 2000 (B-2000) a company set up under Belgian law with a capital of 250 372 (BEF 10 100 000) and 70 % owned by the Belgian Government's Building Authority and 30 % owned by two banks, BACOB (now Artesia Bank) and ASLK/CGER (now Fortis Bank).

In its annual report for 2000 (published on 1 June 2001), Berlaymont 2000 estimated that costs incurred for the renovation of the Berlaymont would amount to 395 588 500 (BEF 15,958 billion) by March 2002.

The Commission has continually emphasised that it will only bear the costs that it considers should legitimately be met. That specifically excludes the financial consequences of any faults or management errors that can be ascribed to the project company, and it specifically excludes any financial consequences of possible fraud.

In the Protocole d'Accord signed by the Belgian Government and the European Commission on 8 July 1997 the cost of renovating the Berlaymont was estimated at 324 million (BEF 13,1 billion) and that estimate was based on the assumption that the building would be reoccupied on 30 June 2000.

The latest estimate of the final cost of renovation of the Berlaymont made by Berlaymont 2000 SA in its Annual Report for the year 2000 is 500 million (BEF 20,2 billion), assuming reoccupation by 31 December 2003.

On 21 November 2000, the European Anti-Fraud Office (OLAF) received a note from the responsible Commission services informing the Office about serious misgivings which the Commission's consultants, Ernst & Young, had about a particular financial claim made by a major contractor to B-2000. The note was sent with my full knowledge and endorsement, and OLAF was provided with a report on the project prepared by the consultancy firm. After evaluation, the Director of OLAF decided on 5 December 2000 to open an investigation concerning B-2000 and its management of the site. On the basis of matters arising in the course of the investigation, a decision to open an internal investigation concerning the Commission was made in June 2001. OLAF has received numerous files from the Commission and elsewhere and continues to do so as it pursues the investigation.

The OLAF investigations are ongoing. The Commission is informed that the Office expects to finalise its reports before July 2002. A team of three investigators is currently working on this case, and they are assisted by a magistrate from the Magistrates and Legal Advice Unit within OLAF.

Until investigations are concluded it is clearly not possible to say whether or not any prosecutions will be undertaken.

The ultimate responsibility for the modernisation project lies with SA Berlaymont 2000.

The accumulated delays in work mean that SA Berlaymont 2000 now anticipates that the building will be ready for occupation by 31 December 2003.

The Protocole d'Accord of 1997 included a provision that the Commission and the Belgian government would, in due course, negotiate a contract concerning the purchase of the building by the Commission. Those negotiations have been underway since January 2001.

If they lead to a mutually satisfactory conclusion on all outstanding legal, financial and technical issues, and if the work is of an acceptable quality (une bonne fin under the terms of the Protocol) the Commission intends to return to the Berlaymont.