Brussels, 25/10/2002 (Agence Europe) - Commenting on Wednesday on the signing of a contract setting out the conditions for the return of the Commission to its Berlaymont headquarters (see Europe of 24 October, p.15), the Vice-President of the Commission said: "The contract… puts an end to a long period of uncertainty for both the Commission and the Belgian State, and I believe that it corresponds to the interests of Belgium and of the Union and its citizens. The Commission can now confidently look forward to completion of the works within an established schedule, under stable conditions, and with the clear perspective of reoccupying its headquarters, fully modernised, adapted to meet enlargement needs, and at an affordable cost." Speaking for Belgium, minister Rik Daems echoed the Commission, stressing the importance of having been able to settle the matter in the interests of both parties. The main elements of the contract are as follows:
Delivery deadlines. The deadline for delivery of the basic building is 31 December 2003 and the deadlines for required additional works are 31 March (work to prepare for enlargement) and 30 June 2004 (installation of multimedia equipment.
Financial details. Starting in 2005, the Commission will pay fixed annual instalments over a period of 27 years with a 2% annual step-up. The first annual instalment will amount to EUR 31 891 235, subject to all the works being delivered on time. This translates into a Net Present Value of the Berlaymont building and plot of EUR 552 879 207, financed by the Belgian State at an interest rate of 5.37%. The Commission notes that "the fact that the Belgian State is raising the long-term financing is an important operational guarantee. The later delivery of the additional work will not stop the hand-over of the basic building being regarded as the date on which the six- and eighteen-month periods start to run, after which the Belgian State's commitment to assuming the cost of the replacement leases ends. On 1 January 2004 the Commission will stop paying the pre-renovation Berlaymont rent. So the hand-over date of 31 December 2003 will be subject to a late-delivery penalty by which the old rent payment will not give way to the new instalment payment as long as the delay lasts. If either of the delivery dates agreed for the additional works is not met the basic instalment will be reduced by EUR 221 000 per month of delay until the date of the actual delivery. That will reduce the instalment to the value of that part of the building actually handed over to the Commission on 31 December 2003. The contract contains a provision allowing for unforeseen circumstances to justify a deadline overrun and an overrun of the figure of EUR 552 million, the latter only up to 50% of the sum, however. Under certain circumstances, bankruptcy of the main or a sub-contractor may also be construed as grounds for extending the deadlines. If the European Commission wishes to transfer its rights during the period of the lease, the Belgian State will have first option to purchase. If it chooses not to exercise this, it will have the right to the added value realised. Since the Belgian State is taking care of the financing, the building contractor Berlaymont 2000's claim on the Commission arising from the lease will be transferred to the Belgian state and the instalments paid directly into the Belgian treasury.
Legal agreements. Berlaymont 2000 has provided all necessary commitments to the Commission on the completion of the works, the agreed deadlines and technical specifications and the approval procedures. In turn, these commitments by Berlaymont 2000 are irrevocably and unconditionally guaranteed by the Belgian state.