Brussels, 26/06/2007 (Agence Europe) - The Community institutions have improved management of building expenditure over the years but continue to show shortcomings when it comes to planning, financing and costs, and interinstitutional cooperation. This was the main conclusion reached by the somewhat critical special report from the Court of Auditors published on Tuesday 26 June on real-estate spending by the Community institutions in their three main locations (Brussels, Luxembourg and Strasbourg).
According to the Court, the total surface area of institutional buildings in Brussels, Luxembourg and Strasbourg amounted to around 2 million square metres in 2005. The total cost of building occupancy is estimated at €345 million. In 31 December 2005, the net accounting value of the buildings belonging to the institutions amounted to €3.886 billion, which represents a rise of 791 million over a five year period.
The institutions have still not managed to set up a common Community policy on real-estate, the Court regrets, although two principles are shared: the priority given to the purchase of buildings (40-50 less costly than renting), and the resolve to concentrate buildings in given areas to create economies of scale (e.g. services, communication and maintenance) although this has contributed to an increase in the prices in the area due to the higher demand for buildings. The Court thus recalls that, in September 2006, the Parliament decided to purchase the buildings that it occupied in Strasbourg (IPE 1, 2 and 3) for the sum of €143.125 million.
The Court, however, notes that, despite the policy of building purchase, some institutions have signed renting contracts not foreseeing a fall in the rent after investment has been amortized, or not comprising a purchase option clause at a price that takes into account the rents already paid. Such is the case, for example, of the usufruct contract sealed in May 2004 by the Commission for the Mondrian building, a contract lasting 15 years (renewable up to 30 years at most). The contact did not contain a purchase option clause and provided for an annual payment of €4.8 million subject to indexation. The value of the Mondrian building on the market was estimated by experts from the Commission at around €61.7 million. If, for this same building, the Commission had been able to negotiate an acquisitive emphytheosis contract (a sort of long term lease with purchase option), then the annual payments would have been reduced by €3.25 million, the Court explains.
Furthermore, the Court noted certain positive changes with regard to management: the Commission is currently concluding the drafting of a manual for standards applicable to a model building aimed at defining more rational criteria for allocating space between its directorates general and services. Also, it has completed the inventory of buildings available. The institutions in Brussels have decided to establish a working group whose first task will be to establish a common approach and define the different kinds of surfaces and costs.
Finally, the report points out that in very few cases only, the institutions have published their building projects in the Official Journal, thus allowing the largest number of tenderers to show their interest. And the institutions have largely used the negotiated procedure (without publication) rather than competitive procedure (which is, however, the procedure required by the financial procedure and the directive on public procurement). The price paid for the construction of building or for work has therefore not been determined under conditions of free competition, the report states.
After the inquiry, the Court issued a number of recommendations, such as the creation of a building policy common to all institutions, a far-reaching analysis of the problem of concentrating offices in certain districts and the widest possible use of competition procedures. (lc)